The importance of factoring battery degradation in the equation of optimizing battery revenues07 January 2021
Battery technology has attracted a great deal of interest because of their potential use cases in the energy sector. As the number of intermittent renewable energy sources in the power grid grows, it is becoming more and more important to find solutions that help to compensate for their intermittent nature. Therefore, this demand opens a door for battery technology and the need to optimise its functionality.
There are various batteries technologies being deployed for grid support, but one of the most widely used battery technology are lithium-ion batteries. Due to their ability to provide rapid response, lithium-ion batteries are an ideal candidate for providing ancillary services such as Frequency Containment Reserves (FCR) or Frequency Restoration Reserves (FRR). However, using batteries for these applications has an eﬀect on their life. Therefore, the need is to optimise the battery usage in such a way that the revenues are maximised and the battery is utilised to its maximum potential.
A battery that is being used for any application degrades with time. Battery life can be aﬀected by its charging/discharging profile and its operating temperature. In terms of charging/discharging profile the factors which aﬀect battery life is its state of charge and depth of discharge. In order to study how using the battery for grid services like FCR and FRR aﬀects its charging profile, and consequently, the battery life, two battery degradation models were developed – one based on the work done by the INVADE 2020 projects  and another based on the work of National Renewable Energy Laboratory, USA .
Time is the ultimate contributor to battery degradation but there are two main determinants of the battery life: the impact of its charging/discharging profile and its operating temperature. When looking at the charging/discharging profile, the factors which aﬀect battery life are its state of charge and its depth of discharge. To study how using the battery for grid services like FCR and FRR aﬀects its charging profile, and consequently the battery life, two battery degradation models were developed – one based on the work done by the INVADE 2020 projects  and another based on the work of National Renewable Energy Laboratory, USA .
As per the results of both the models (refer Figure 1), some of the salient observations were that certain use cases for the battery generated much higher revenues than others. For instance, in terms of battery life, batteries used for FCR showed the longest battery life while batteries used for FRR showed the shortest battery life. In terms of revenue, batteries used for FRR use cases showed the least revenue generation However, the highest revenue is recorded in a combined strategy where the battery operates in both FCR and FRR markets.
How can Priogen help?
The evidence of the results exhibited that certain use cases can be more profitable over others in terms of revenue generation, and can also ensure optimum battery usage. Working with battery owner and battery manufacturer, Priogen can use the developed models to factor in the battery degradation eﬀects when analysing market strategies over the full period of a battery business case. With these accumulated insights, we can help optimise the battery owner’s business case.