A Greedy Approach for Optimal Operation of a Battery Energy Storage Considering Capacity Fade

This paper proposes a novel methodology to compute the optimal charging/discharging operation of a Battery Energy Storage System (BESS) to maximize the revenue in electricity markets while accounting for the energy capacity degradation enabled by such cyclic operation. The effect of the degradation has been often neglected or it has not been properly modeled; this may lead to the overestimation of the expected market revenues. A Dynamic Programming algorithm has been developed to effectively embed the non-convex features of the degradation of the energy capacity into the optimization problem. A set of case studies demonstrates the effectiveness of the proposed methodology with respect to a simpler modelling approach and it assesses the impact of different degradation models on the collected revenues.