Embedding Lithium-ion Battery Scrapping Criterion and Degradation Model in Optimal Operation of Peak-shaving Energy Storage

Lithium-ion battery systems have been used in practical power systems for peak-shaving, demand response, and frequency regulation. However, a lithium-ion battery is degrading while cycling and would be scrapped when the capacity reduces to a certain threshold (e.g. 80%). Such scrapping criterion may not explore the maximum benefit from the battery storage. In this paper, we propose a novel scrapping criterion for peak-shaving energy storage based on battery efficiency, time-of-use price, and arbitrage benefit. A new battery life model with scrapping parameters is then derived using this criterion. Embedded with the life model, an optimal operation method for peak-shaving energy storage system is presented. The results of case study show that the operation method could maximize the benefits of peak-shaving energy storage while delaying battery degradation. Compared with the traditional 80% capacity-based scrapping criterion, our efficiency-based scrapping criterion can significantly improve the lifetime benefit of the battery.