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An intertemporal decision framework for electrochemical energy storage management

Author

Listed:
  • Guannan He

    (Carnegie Mellon University
    Carnegie Mellon University)

  • Qixin Chen

    (Tsinghua University)

  • Panayiotis Moutis

    (Carnegie Mellon University)

  • Soummya Kar

    (Carnegie Mellon University)

  • Jay F. Whitacre

    (Carnegie Mellon University
    Carnegie Mellon University
    Carnegie Mellon University)

Abstract

Dispatchable energy storage is necessary to enable renewable-based power systems that have zero or very low carbon emissions. The inherent degradation behaviour of electrochemical energy storage (EES) is a major concern for both EES operational decisions and EES economic assessments. Here, we propose a decision framework that addresses the intertemporal trade-offs in terms of EES degradation by deriving, implementing and optimizing two metrics: the marginal benefit of usage and the average benefit of usage. These metrics are independent of the capital cost of the EES system, and, as such, separate the value of EES use from the initial cost, which provides a different perspective on storage valuation and operation. Our framework is proved to produce the optimal solution for EES life-cycle profit maximization. We show that the proposed framework offers effective ways to assess the economic values of EES, to make investment decisions for various applications and to inform related subsidy policies.

Suggested Citation

  • Guannan He & Qixin Chen & Panayiotis Moutis & Soummya Kar & Jay F. Whitacre, 2018. "An intertemporal decision framework for electrochemical energy storage management," Nature Energy, Nature, vol. 3(5), pages 404-412, May.
    • Handle: RePEc:nat:natene:v:3:y:2018:i:5:d:10.1038_s41560-018-0129-9
    DOI: 10.1038/s41560-018-0129-9
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    Cited by:

    1. Li, Alan G. & Wang, Weizhong & West, Alan C. & Preindl, Matthias, 2022. "Health and performance diagnostics in Li-ion batteries with pulse-injection-aided machine learning," Applied Energy, Elsevier, vol. 315(C).
    2. Kim, James Hyungkwan & Kahrl, Fredrich & Mills, Andrew & Wiser, Ryan & Montañés, Cristina Crespo & Gorman, Will, 2023. "Economic evaluation of variable renewable energy participation in U.S. ancillary services markets," Utilities Policy, Elsevier, vol. 82(C).
    3. He, Guannan & Ciez, Rebecca & Moutis, Panayiotis & Kar, Soummya & Whitacre, Jay F., 2020. "The economic end of life of electrochemical energy storage," Applied Energy, Elsevier, vol. 273(C).
    4. Koh, S.C.L. & Smith, L. & Miah, J. & Astudillo, D. & Eufrasio, R.M. & Gladwin, D. & Brown, S. & Stone, D., 2021. "Higher 2nd life Lithium Titanate battery content in hybrid energy storage systems lowers environmental-economic impact and balances eco-efficiency," Renewable and Sustainable Energy Reviews, Elsevier, vol. 152(C).
    5. Kim, James Hyungkwan & Mills, Andrew D. & Wiser, Ryan & Bolinger, Mark & Gorman, Will & Crespo Montañes, Cristina & O'Shaughnessy, Eric, 2021. "Project developer options to enhance the value of solar electricity as solar and storage penetrations increase," Applied Energy, Elsevier, vol. 304(C).
    6. Lavin, Luke & Apt, Jay, 2021. "The importance of peak pricing in realizing system benefits from distributed storage," Energy Policy, Elsevier, vol. 157(C).
    7. Chen, Xinjiang & Yang, Yu & Wang, Jianxiao & Song, Jie & He, Guannan, 2023. "Battery valuation and management for battery swapping station," Energy, Elsevier, vol. 279(C).
    8. Yue, Meiling & Jemei, Samir & Zerhouni, Noureddine & Gouriveau, Rafael, 2021. "Proton exchange membrane fuel cell system prognostics and decision-making: Current status and perspectives," Renewable Energy, Elsevier, vol. 179(C), pages 2277-2294.
    9. Mathews, Ian & Xu, Bolun & He, Wei & Barreto, Vanessa & Buonassisi, Tonio & Peters, Ian Marius, 2020. "Technoeconomic model of second-life batteries for utility-scale solar considering calendar and cycle aging," Applied Energy, Elsevier, vol. 269(C).
    10. Beuse, Martin & Dirksmeier, Mathias & Steffen, Bjarne & Schmidt, Tobias S., 2020. "Profitability of commercial and industrial photovoltaics and battery projects in South-East-Asia," Applied Energy, Elsevier, vol. 271(C).
    11. Gorman, Will & Montañés, Cristina Crespo & Mills, Andrew & Kim, James Hyungkwan & Millstein, Dev & Wiser, Ryan, 2022. "Are coupled renewable-battery power plants more valuable than independently sited installations?," Energy Economics, Elsevier, vol. 107(C).
    12. Pei, Ming & Wang, Qiheng & Ye, Lin & Luo, Yadi & Sha, Licheng & Zhang, Zaichi & Song, Xuri, 2024. "Hierarchical control strategy of wind-storage frequency support for SOC recovery optimization and arbitrage revenue," Applied Energy, Elsevier, vol. 365(C).
    13. Vykhodtsev, Anton V. & Jang, Darren & Wang, Qianpu & Rosehart, William & Zareipour, Hamidreza, 2022. "A review of modelling approaches to characterize lithium-ion battery energy storage systems in techno-economic analyses of power systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 166(C).
    14. Jura Jurčević & Ivan Pavić & Nikolina Čović & Denis Dolinar & Davor Zoričić, 2022. "Estimation of Internal Rate of Return for Battery Storage Systems with Parallel Revenue Streams: Cycle-Cost vs. Multi-Objective Optimisation Approach," Energies, MDPI, vol. 15(16), pages 1-17, August.

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