(373aq) Smart Control to Improve the Economic Benefits of the Battery Energy Storage System at the Industrial Facility

As global energy systems pivot towards greater integration of renewable sources, industrial facilities face challenges with the variability and dispatchability of energy. Demand Response (DR) programs have emerged as a strategic solution, incentivizing industrial consumers to align energy usage with grid demand—a synergy facilitated by the predictability of their energy profiles [1,2]. Yet, the wider adoption of Battery Energy Storage Systems (BESS) in such contexts is hindered by high initial investment costs and stringent expectations for returns [3]. The most significant cost within a BESS is attributed to the battery itself, with longevity and capacity degradation critically influenced by operational practices [4]. Existing economic analyses often neglect the nuanced effect of these practices, potentially skewing viability assessments [2,5–8].

Addressing the operational impact on battery degradation, we propose an electrochemical model that encompasses two primary fading mechanisms: solid-electrolyte interface (SEI) growth and lithium plating. We implemented this model to analyze three distinct operational scenarios: real-time dispatch, peak shaving, and a combined approach. These scenarios were assessed through control schemes depicted in Figure 1, focusing on the BESS's charge and discharge limits determined by peak-shaving power thresholds and dispatch events.

Our year-long simulation, visualized in Figure 2, revealed a decline in State of Health (SOH) for all scenarios, exacerbated by higher charge/discharge limits due to increased degradation at high State of Charge (SOC) and during idle periods with a high SOC—conditions that foster lithium plating and accelerate SEI growth [9]. Consequently, we recommend operating BESS at lower charge/discharge limits to mitigate degradation costs. However, this strategy must be balanced with the system's ability to participate in peak shaving for economic feasibility, as illustrated in Figure 3b and c, with optimal payback periods observed at a 50%-100% charge/discharge limit. Notably, participating in multiple programs did not significantly affect degradation costs for BESS operated within moderate/low charge/discharge limits but did enhance profit margins. This phenomenon is caused by the fact the side reaction rate is exponentially related to the state of charge as shown in Equation 1 to 3.

In conclusion, to facilitate BESS integration in industrial facilities, smart operational strategies are essential to balance degradation costs against revenue potential from program participation.

Reference

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