Techno-economic viability of battery storage for residential applications

Abstract: Battery storage has emerged as a promising solution in various energy systems. However, challenges exist regarding the viability of batteries in practical stationary applications. Factors such as the capital and operational costs, relatively short lifetime, and battery degradation are among crucial factors which have significant impact on battery profitability. To make batteries more viable technology, effective battery management is a necessity. However, there are multiple critical factors which need to be addressed for effective battery utilization and management in real-life applications under dynamic operational conditions.In this thesis, different battery modelling approaches within battery operational management are proposed. Each proposed scenario consists of a set of specific methods for the estimation of battery performance, capacity degradation, remaining useful life, state-of-charge, state-of-health, and state-of- power.Moreover, the study explores strategies for efficient battery utilization to maximize sustained profitability. Accordingly, the study deals with 32 different state-of-charge operating control strategies as well as different charge/discharge rates (low, moderate, high) to evaluate their impact on techno-economic profitability of a battery system in a grid-connected residential application. Moreover, two day-ahead and optimization-based operation scheduling strategies to maximize battery profitability are proposed. Each scenario employs unique approaches to make optimal decisions for optimal battery utilization. The first scenario aims to optimize short-term profitability by prioritizing revenue gains. Conversely, the second scenario proposes a smart strategy capable of making intelligent decisions on a wide range of decision-variables to simultaneously maximize daily revenue and minimize daily degradation costs.The key findings reveal that overlooking or simplifying assumptions about multiple critical aspects of battery behavior led to an improper battery management system in practical applications under dynamic operational conditions. Selecting a proper state-of-charge control strategy positively affects the profitability in which alteration of the allowable SOC window from (40%–90%) to (10%–60%) increase the battery lifetime from 10.2 years to 14 years leading to 31.6% improvement in net present value. The key findings showcase how a smart battery scheduling strategy that strike optimal balance between revenue and degradation achieves impressive profit (18-20 €/kWh/year), short payback (7.5 years), and extended lifespan (12.5 years), contrasting revenue-focused scenarios, ensuring sustained profitability for battery owners in residential applications. The findings offer valuable insights for decision-makers, enabling informed strategic choices and profitable solutions.