Model Predictive Control for Residential Battery Storage System: Profitability Analysis

Abstract

For increased penetration of energy production from renewable energy sources at a utility scale, battery storage systems (BSSs) are a must. Their levelized cost of electricity (LCOE) has drastically decreased over the last decade. Residential battery storage, mostly combined with photovoltaic (PV) panels, also follow this falling prices trend. The combined effect of the COVID-19 pandemic and the war in Ukraine has caused such a dramatic increase in electricity prices that many consumers have adjusted their strategies to become prosumers and self-sufficient as feed-in subsidies continue to drop. In this study, an investigation is conducted to determine how profitable it is to install BSSs in homes with regards to battery health and the levelized cost of total managed energy. This is performed using mixed-integer linear programming (MILP) in MATLAB, along with its embedded solver Intlinprog. The results show that a reasonable optimized yearly cycling rate of the BSS can be reached by simply considering a non-zero cost for energy cycling through the batteries. This cost is simply added to the electricity cost equation of standard optimization problems and ensures a very good usage rate of the batteries. The proposed control does not overreact to small electricity price variations until it is financially worth it. The trio composed of feed-in tariffs (FITs), electricity costs, and the LCOE of BSSs represents the most significant factors. Ancillary grid service provision can represent a substantial source of revenue for BSSs, besides FITs and avoided costs.