Revenue Maximization for a Battery Storage With Optimal Capacity Revamping Due to Cyclic Fade

An accurate approach for optimal revenue-stacking operation of battery storage assets should consider the degradation of their energy capacity as a result of cyclic charging/discharging operations. This paper proposes a novel revenue-maximization model to compute the optimal operation of a lithium-ion battery in short-term energy markets whilst accurately computing the corresponding energy capacity degradation and evaluating the long-term optimal capacity revamping policy to replace the degraded cells. An effective reformulation technique allows to integrate the typical non-convex behavior of the energy capacity degradation in standard optimization problems. Results demonstrate the effectiveness of the proposed methodology compared to alternative formulations. The outcomes highlight the impact of energy degradation on the typical operational policy of the battery, quantifying the performance improvement that can be achieved by striking the optimal pay-off between market revenues and revamping costs.