Does a grid-level battery energy storage system perform energy arbitrage?

The present work proposes a long-term techno-economic profitability analysis considering the net profit stream of a grid-level battery energy storage system (BESS) performing energy arbitrage as a grid service.

Does battery degradation affect Bess profitability?

We found that, even without degradation, the break-even investment cost that makes the BESS profitable with a power to-energy-ratio of 1 MW/2MWh is 210 $/kWh. By implementing a cycle-counting degradation model, we observed a remarkable battery degradation on BESS profitability corresponding to a yearly net profit reduction in the 13–24 % range.

Are battery energy storage systems a low-carbon flexible resource?

1. Introduction In the modern power network, battery energy storage systems (BESS) are playing a crucial role as low-carbon flexible resources, due to their ability to address renewable energy intermittency and to provide a wide range of grid services (e.g., energy arbitrage, frequency regulation, load-shifting) .

Are lithium-ion batteries aging?

Following the cost reductions and technological advances of recent years, lithium-ion cells are now the predominant battery technology for BESS installations , . However, like other battery types as well, lithium-ion batteries are subject to degradation due to a multitude of cell internal aging mechanisms.

Does battery degradation affect NPV from energy arbitrage?

The case-study, based upon historical real-time price data from a location in the CAISO electricity market in the United Sates, shows that considering battery degradation has a significant impact on the achievable NPV from energy arbitrage operation.

What percentage of battery capacity is used for price arbitrage?

Considering the U.S. wholesale electricity markets, >80 % of the battery capacity added in 2021 in the CAISO service territory was used for price arbitrage. In fact, as reported by the CAISO special report on battery storage , the largest positive revenue comes from day-ahead market energy schedules.