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The financial viability of merchant battery storage projects typically relies on the participation in electricity markets (e.g., wholesale day-ahead market), which entail repeated charging/discharging actions of the asset. This cyclic operation causes a degradation of the storage batteries and a reduction of the available energy capacity. The operation of the asset can be improved by considering revamping actions, where the energy capacity of the asset is restored by replacing the degraded cells with brand-new ones. However, these actions require a comprehensive modelling of different types of non-negligible costs and of important operating features. For an accurate maximization of the overall profit, it becomes extremely relevant to determine the optimal timing and sizing of these revamping actions. This paper develops a scheduling model for a utility-scale battery which co-optimize the asset’s optimal short-term market operation while providing the optimal long-term revamping policy to manage the energy capacity fade pursuant to cyclic charging/discharging actions. Specifically, the optimal choices concerning the revamping policy accurately account for three features. The first acknowledges both fixed and variable costs concerning the replacement of racks of cells. The second is the downtime of the asset during each revamping period, i.e. its inability to operate in energy markets while the revamping action is being carried out. Last, the proposed methodology allows to compare the residual economic value of worn cells with respect to the current market value of brand-new ones. Results indicate a high impact of the abovementioned features on the optimal selected revamping policy as well as on the actual total profit of the battery.
Alic et al. (Fri,) studied this question.