Sizing Li-ion BESS for Participation in Ancillary Services With Consideration of Degradation Cost

For BESSs participating at the grid-level, lithiumion (Li-ion) batteries are a promising technology for grid-scale applications due to their high energy and power density, flexible installation, and long life cycles. The main obstacle facing the expansion of BESSs is related to their high capital costs. Therefore, despite their technological advantages, there are still concerns about the economic feasibility of BESSs. This paper proposes a MILP optimization model to optimally size and schedule Liion batteries for grid-scale applications. This model's goal is to estimate long-term revenue accurately, by considering life cycles, degradation costs, and discharge rates when sizing and managing a BESS for grid applications. These factors are crucial to giving investors a longer-term comprehensive economic assessment. Frequency regulation and energy arbitrage are considered in this model for the generation of revenue. Additionally, the proposed model technique takes into account economic and technological factors, such as degradation costs and battery lifespan. PJM historical data is used in this simulation.