Battery Optimization for Ancillary Markets in Nordic and Central European Electricity Markets

Sammanfattning

The intermittent nature of sources like wind and solar has made it extremely difficult to integrate renewable energy into electricity systems. By storing energy and providing ancillary services in the electrical markets, Battery Energy Storage Systems (BESS) offer a way to stabilize grids. The goal of this thesis is to optimize BESS operations in the Nordic and Central European power markets to minimize battery degradation and maximize financial rewards. This study aims to determine if BESS may be economical in electricity markets with volatile pricing. Efficient battery management can result in significant revenues in these sectors. It can also assist decrease long-term expenditures associated with battery wear and tear. The potential for profit and cost reductions is the driving force behind this study. Maintaining operational effectiveness and optimizing profits are two challenges when it comes to ensuring grid stability while using BESS to take advantage of volatile market pricing. To maintain this operational effectiveness and optimize profits, a non-linear degradation model for LFP batteries is developed to examine the effects of temperature, depth of discharge (DoD), and state of charge (SoC). To strike the greatest possible balance between profitability and degradation, the research uses multi-stage optimization models, to use SoC as a linearized function of degradation costs and probability-based bidding techniques to assess Spot and Frequency Containment Reserves (FCR-D) markets respectively. The findings demonstrate that BESS operations may be improved considerably, while lessening the degradation costs while preserving consistent financial gains using multi-stage optimization. The long-term financial sustainability of BESS in certain markets is further demonstrated by the cost-benefit analysis.