Battery profit optimization
(2023) In CODEN:LUTEDX/TEIE EIEM01 20222Industrial Electrical Engineering and Automation
- Abstract
- In the near future, a new market will form full of 2nd life batteries that are no longer suitable to use in electric vehicles. This since their capacity retention is too low after a few years of usage, as a consequence of two aging mechanisms; cycling aging and calendar aging. These batteries can be put into good use as battery energy storage systems, as the energy density is not as an important factor for stationary applications.
Simultaneously as the 2nd life battery market is growing, the Swedish transmission system operator Svenska Kraftnät, who is responsible for grid balancing, is fearing difficulties in maintaining the grid frequency at a satisfactory level. This has lead to increased investments in the balancing markets, where... (More) - In the near future, a new market will form full of 2nd life batteries that are no longer suitable to use in electric vehicles. This since their capacity retention is too low after a few years of usage, as a consequence of two aging mechanisms; cycling aging and calendar aging. These batteries can be put into good use as battery energy storage systems, as the energy density is not as an important factor for stationary applications.
Simultaneously as the 2nd life battery market is growing, the Swedish transmission system operator Svenska Kraftnät, who is responsible for grid balancing, is fearing difficulties in maintaining the grid frequency at a satisfactory level. This has lead to increased investments in the balancing markets, where both large- and small-scale energy and power suppliers can trade. This means that Svenska Kraftnät are procuring larger volumes of balancing power, creating a market opportunity for trading on balancing markets with 2nd life battery energy storage systems.
The battery life can be divided into a 1st life, inside a vehicle, and a 2nd life, as a grid application. In order to maximize profit, the question regarding when to remove the batteries from the 1st life arises. In order to answer this question, both the 1st and 2nd life earnings potential need to be investigated.
A model was constructed which calculated the earnings in the 1st life (based on industry profit margins) and in the 2nd life based on an implemented trading algorithm. The results show that the batteries can earnings is higher, per calendar day, during the 2nd life than the 1st life. Additionally, if 12 truck batteries, with the initial energy capacity of 280 kWh, form a battery energy storage system which trades on the balancing markets, they can in the best case reach total earnings of approximately 4.55 million euros until end of life. The number corresponding to the worst case is approximately 1.1 million euros. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9110748
- author
- Helfer, Ebba LU
- supervisor
-
- Mats Alaküla LU
- Martin Andersson LU
- Olof Samuelsson LU
- organization
- alternative title
- A study on when to end a battery's first life, and begin its second life
- course
- EIEM01 20222
- year
- 2023
- type
- H3 - Professional qualifications (4 Years - )
- subject
- keywords
- Battery, 2nd life battery, Ancillary services, BESS, energy storage system
- publication/series
- CODEN:LUTEDX/TEIE
- report number
- 5487
- language
- English
- id
- 9110748
- date added to LUP
- 2023-03-14 10:28:54
- date last changed
- 2023-03-14 10:28:54
@misc{9110748,
abstract = {{In the near future, a new market will form full of 2nd life batteries that are no longer suitable to use in electric vehicles. This since their capacity retention is too low after a few years of usage, as a consequence of two aging mechanisms; cycling aging and calendar aging. These batteries can be put into good use as battery energy storage systems, as the energy density is not as an important factor for stationary applications.
Simultaneously as the 2nd life battery market is growing, the Swedish transmission system operator Svenska Kraftnät, who is responsible for grid balancing, is fearing difficulties in maintaining the grid frequency at a satisfactory level. This has lead to increased investments in the balancing markets, where both large- and small-scale energy and power suppliers can trade. This means that Svenska Kraftnät are procuring larger volumes of balancing power, creating a market opportunity for trading on balancing markets with 2nd life battery energy storage systems.
The battery life can be divided into a 1st life, inside a vehicle, and a 2nd life, as a grid application. In order to maximize profit, the question regarding when to remove the batteries from the 1st life arises. In order to answer this question, both the 1st and 2nd life earnings potential need to be investigated.
A model was constructed which calculated the earnings in the 1st life (based on industry profit margins) and in the 2nd life based on an implemented trading algorithm. The results show that the batteries can earnings is higher, per calendar day, during the 2nd life than the 1st life. Additionally, if 12 truck batteries, with the initial energy capacity of 280 kWh, form a battery energy storage system which trades on the balancing markets, they can in the best case reach total earnings of approximately 4.55 million euros until end of life. The number corresponding to the worst case is approximately 1.1 million euros.}},
author = {{Helfer, Ebba}},
language = {{eng}},
note = {{Student Paper}},
series = {{CODEN:LUTEDX/TEIE}},
title = {{Battery profit optimization}},
year = {{2023}},
}