Battery aging isn't just a maintenance concern—it’s a key factor in the success of a BESS investment. By using simulation models throughout the project lifecycle, developers and operators can improve battery selection, secure more favorable warranty terms, and fine-tune operations – ultimately extending lifespan and maximizing profitability.
Battery energy storage systems (BESS) are long-term investments, but their success hinges on decisions made from the very start. Without a clear understanding of how batteries age, operators risk inefficiencies, unexpected costs, and reduced profitability. This is where simulation models come into play.
By leveraging battery aging simulation models during the early stages of a project, developers and operators can make data-driven choices about battery selection, system design, and operational strategies. These simulation models help predict degradation rates, ensure financial viability, and optimize revenue.
Six major phases make up a BESS lifecycle:
Simulation models can support in three phases: the feasibility analysis, the development and the operations phase. During these phases, simulation models can provide a foundation for smarter procurement, efficient operations, and extended battery lifespan.
In the early phase of a BESS project, battery simulation models can help assess the financial and technical feasibility of the project. At this stage, project developers may not know the specific details about the battery cells. Â
To get an initial read on how different batteries might age over time, battery aging models are helpful. These models help outline how different operational scenarios and usage patterns could impact battery longevity, offering a baseline understanding of degradation rates. With this information, project developers are better equipped to make an informed decision about which battery cell best suits their project needs. This early visibility helps stakeholders align on project goals and ensures that initial financial assessments are grounded in realistic expectations about battery performance.
As the BESS project moves into the development and permitting phase, simulation models become instrumental in refining both the technical specifications and operational parameters of the BESS. Â
As project developers move from feasibility studies to project viability assessments, simulations need to be more detailed. The degradation behavior of different designs and/or operating scenarios will serve as input for project finance, for instance for the financial model. More detailed simulation models provide comprehensive data on cell characteristics. They show how particular cells respond to different usage patterns and operating strategies. Â
With the right insights, project developers can tailor the BESS design to align with the project’s intended lifespan and operational requirements while controlling costs. They can select the cell that best meets the project requirements and operating strategies. By knowing how the batteries will perform and age in the future, project developers can optimize the design for long-term performance, increasing confidence in project viability.
Grid-scale BESS operate under dynamic conditions, throughout their project lifetime. Depending on the expected revenue streams—such as contracted revenues or earnings in merchant markets—operations can vary significantly. This includes differences in the number of cycles per day, SOC operating windows, or power rates. Project developers need to ensure long-term performance and financial viability under these conditions.
Simulation models provide critical insights into real-world battery aging, helping project developers assess degradation under different operational strategies. They can compare cycling patterns, optimize depth-of-discharge limits, and evaluate the impact of high-power applications.
Knowing how batteries will degrade under diverse and demanding scenarios is key to determining how BESS projects will perform over time.
Battery aging models are also crucial in defining and negotiating performance guarantees in Battery Energy Supply Agreements and Long-Term Service Agreements with battery integrators. These performance guarantees typically depend on buffered degradation assumptions from the cell supplier or integrator. Additionally, they are often limited to a single scenario, which does not reflect real-world usage.
BESS operations can differ significantly, as previously noted. Standard assumptions, like one full cycle per day at 100% depth-of-discharge, don't always hold true. Depending on the scenario, daily cycles can range from less than one to as many as two, or the average cycle depth may fall well below 100%. This results in significantly different degradation behavior in practice. When paired with buffered degradation assumptions, it can potentially lead to revenue loss by unnecessarily restricting operations.
Project developers can use simulation models to negotiate robust performance guarantees and agreements based on real-world degradation performance metrics and actual usage scenarios.
Also, during the operations and maintenance phase, simulation models provide a deeper understanding of the BESS’s performance under diverse operating strategies. This approach helps asset owners to challenge warranty terms and explore opportunities for more flexible BESS operation. They can potentially extend warranty coverage or operate outside specified conditions with greater confidence.
During the operations and maintenance phase, simulation models evolve into dynamic asset management resources. With the design locked in, BESS operators can use aging insights to make informed operational adjustments that optimize revenues and potentially extend battery lifespan.
Aging models simulate various usage scenarios. Operators can fine-tune the balance between performance and degradation, extending the battery’s operational life by months or even years. Â
Simulation models are particularly valuable when a long lifespan is critical to financial success. For instance, in trading applications, potential revenue must be balanced against the long-term effects on battery health. With the help of simulation models, trading strategies can be developed to generate revenue without excessively accelerating aging. This ensures that the system remains cost-effective over its entire lifecycle.
For one European generator of renewable energy, adapting trading algorithms to battery aging was highly beneficial. The utility improved its profitability by more than $1M per 10 MWh. It used scenarios from the aging models to identify operating conditions that maximized BESS performance and lifespan. The increase in profitability was followed by a 20% increase in battery lifetime.
Getting the most out of BESS requires proactive management of battery aging from the initial phases of the project. Decisions made early on can significantly impact long-term BESS performance and lifespan.
By using aging models throughout the BESS lifecycle, project developers and operators can make informed decisions about battery usage that enhance revenue and lifespan. From estimating initial feasibility in the concept phase to optimizing real-world operations, aging models enable asset owners to strategically balance revenue generation with asset preservation. Ultimately, these models provide a roadmap for maximizing the value of a BESS investment, guiding developers and operators on the best ways to use batteries while understanding the long-term effects of each operational choice.
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