Modeling and Analysis of Lithium Battery Operations in Spot and Frequency Regulation Service Markets in Australia Electricity Market

Abstract

Renewable share in the global total energy mix is predicted to grow, and this leads to an increase in the required capacity for frequency regulation. While an electric vehicle (EV) is gaining more popularity, a collection of retired EV battery packs provides an economic option for meeting the additional frequency regulation needs. In this paper, a battery market operation model is proposed to maximize financial return, and a battery operation cost estimator is built to evaluate the potential impacts of market operations on the battery lifespan. Specifically, the model is designed for retired EV lithium batteries under the Australian national electricity market framework. It predicts the automatic-generation-control energy due to the frequency regulation service offers. Battery cycle life cost and battery capacity degradation are considered in the model. It can be used to determine multimarket offers based on the expected profit. Nonetheless, the model can be generalized for other electricity market frameworks and battery types.