How BESS operators can reduce degradation and improve profitability in balancing services

Battery energy storage systems (BESS) perform frequency control services that help balance the electricity system. Research shows that deterioration and profitability vary significantly depending on how BESS is used and which frequency services companies offer.

BESS are built from individual cells to increase both voltage and capacity and larger systems are used to balance the grid. Meryem Ahouad is a PhD student within the SESBC project ”Performance evaluation of battery-based energy storages for various duties, in terms of power, energy and environmental impact“, and has investigated BESS in relation to the balancing service called Frequency Containment Reserve (FCR). The power grid frequency is continuously balanced around 50 Hz using a range of ancillary services. If generation and demand become unbalanced, the frequency starts to deviate, which can threaten grid stability. FCR is the fastest balancing service and responds automatically within seconds to stabilise the electricity system before other slower responses take over.

Meryem has, in her licentiate thesis, combined battery ageing models with dynamic simulations and techno-economic analysis to evaluate how BESS perform when providing grid services for FCR. Long-term experimental data has been used to model the effects, sometimes based on measurements over several years.

“Operators are mainly paid for providing capacity, meaning they are compensated for being available to deliver services. However, there is always a deterioration in the cells which affects the lifetime and profitability. This means that profitability depends not only on revenue but also on how much the battery degrades while providing that availability,” Meryem explains.

Calendar ageing is the most dominant degradation mechanism

The two main types of battery ageing are calendar ageing and cycling ageing. Calendar ageing depends mainly on time, state of charge, and temperature. Cycling ageing is related to how deeply the battery is charged and discharged.

“One of the most important findings is that calendar ageing is the dominant degradation mechanism across all services studied, both individual and combined. Cycling ageing varies between services, but overall, calendar ageing contributes most to capacity loss,” says Meryem.

She continues, “While we cannot control time, we can control state of charge and temperature. For example, some services require the battery to be kept at a high state of charge, which increases ageing. By reducing the upper limit from 90% to 70%, we can significantly reduce degradation without affecting performance.”

Strong impact on economic performance

Meryem’s research provides useful insights for companies operating BESS. The results can be used to decide which services to provide and how to operate their batteries. Most studies focus on maximising revenue, but this study shows that it is equally important to consider battery ageing when making these decisions.

“It’s shown that ageing has a strong impact on economic performance. Some services generate similar revenue, but profitability differs significantly once degradation costs are included. I would recommend operating batteries with a lower maximum state of charge and combining services to reduce degradation, for example FCR-N (Normal) with FCR-D (Down),” Meryem concludes.

About Meryem Ahouad

Meryam is from Morocco, where she completed her master’s degree in materials science and nanoengineering, specialising in materials for energy storage, and started her PhD studies at Chalmers University of Technology in 2023.

“My master’s studies focused on materials science, but I wanted to learn more about real-world battery applications. I found this project interesting because it connects material science with power system applications. I have really enjoyed the research environment here, especially the strong connection between academia and industry. It’s valuable to see how fundamental research translates into practical applications.”

BESS image Shutterstock/allahfoto