• search hit 12 of 278
Back to Result List

Depreciation Cost is a Poor Proxy for Revenue Lost to Aging in Grid Storage Optimization

  • Dispatch of a grid energy storage system for arbitrage is typically formulated into a rolling-horizon optimization problem that includes a battery aging model within the cost function. Quantifying degradation as a depreciation cost in the objective can increase overall profits by extending lifetime. However, depreciation is just a proxy metric for battery aging; it is used because simulating the entire system life is challenging due to computational complexity and the absence of decades of future data. In cases where the depreciation cost does not match the loss of possible future revenue, different optimal usage profiles result and this reduces overall profit significantly compared to the best case (e.g., by 30–50%). Representing battery degradation perfectly within the rollinghorizon optimization does not resolve this—in addition, the economic cost of degradation throughout life should be carefully considered. For energy arbitrage, optimal economic dispatch requires a trade-off between overuse, leading to high return rate but shortDispatch of a grid energy storage system for arbitrage is typically formulated into a rolling-horizon optimization problem that includes a battery aging model within the cost function. Quantifying degradation as a depreciation cost in the objective can increase overall profits by extending lifetime. However, depreciation is just a proxy metric for battery aging; it is used because simulating the entire system life is challenging due to computational complexity and the absence of decades of future data. In cases where the depreciation cost does not match the loss of possible future revenue, different optimal usage profiles result and this reduces overall profit significantly compared to the best case (e.g., by 30–50%). Representing battery degradation perfectly within the rollinghorizon optimization does not resolve this—in addition, the economic cost of degradation throughout life should be carefully considered. For energy arbitrage, optimal economic dispatch requires a trade-off between overuse, leading to high return rate but short lifetime, vs. underuse, leading to a long but not profitable life. We reveal the intuition behind selecting representative costs for the objective function, and propose a simple moving average filter method to estimate degradation cost. Results show that this better captures peak revenue, assuming reliable price forecasts are available.show moreshow less

Export metadata

Additional Services

Search Google Scholar
Metadaten
Author:Volkan Kumtepeli, Holger HesseORCiDGND, Thomas Morstyn, Seyyed Mostafa Nosratabadi, Marko Aunedi, David A. Howey
DOI:https://doi.org/10.48550/arXiv.2403.10617
Publisher:Arxiv
Document Type:conference proceeding (article)
Conference:American Control Conference (ACC) 2024, July 8-12,2024, Toronto, Canada
Language:English
Date of Publication (online):2024/03/15
Year of first Publication:2024
Volume:2024
Article Number:2403.10617
Number of pages:6 Seiten
First Page:1
Last Page:6
Institutes:Fakultät Maschinenbau
IEAT - Institut für Energie- und Antriebstechnik
Dewey Decimal Classification:6 Technik, Medizin, angewandte Wissenschaften
Open Access:open_access
Research focus:FSP1: Energie
Publication Lists:Hesse, Holger
Publication reviewed:begutachtet
Release Date:2024/07/08
Verstanden ✔
Diese Webseite verwendet technisch erforderliche Session-Cookies. Durch die weitere Nutzung der Webseite stimmen Sie diesem zu. Unsere Datenschutzerklärung finden Sie hier.