The Effects of Battery Degradation Modelling on Optimal Control of Residential Battery Systems

Abstract

As residential battery energy storage systems (BESS) proliferate, it becomes increasingly important to be able to control them optimally within retail electricity market arrangements. Aggressively cycling the battery leads faster degradation and ultimately replacement, which is likely to be uneconomical. Accordingly, battery degradation should be considered in BESS control strategies. This paper uses a linear cost model based on total BESS throughput to incorporate degradation cost into the cost function of an optimal control strategy. This model is chosen due to its practicality in situations where in-depth battery parameters are unknown, real-time dispatch requires fast computation. It is shown that the inclusion of a degradation model has a significant impact on BESS operation under various residential retail tariff structures, suggesting that such models should be included in control strategies. Care is needed to ensure degradation costs are accurate since there is a high sensitivity in these strategies to cost assumptions.