Optimal participation of a wind and hybrid battery storage system in the day-ahead and automatic frequency restoration reserve markets

To evaluate the potential market revenue increase coming from the installation of a hybrid battery energy storage system (HESS) paired with a wind plant, a model is proposed for optimizing the simultaneous participation of the plant in the day-ahead (DA) and the automatic frequency restoration reserve (aFRR) markets. In the analysis, the Danish market is assumed as a case study. The HESS is composed of a combination of lithium-ion (LiB) and vanadium redox flow batteries (VRFB). The optimal dispatching problem is solved as a Mixed Integer Linear Program (MILP), using a robust formulation to consider the uncertainty of the aFRR market. The developed economic model incorporates the influence of cyclic degradation on the lithium-ion battery’s life, considering it dependent on the number of cycles and the depth-of-discharge of each cycle. The economic and technical effects of hybridization are investigated for different storage sizes. Furthermore, the impact of robust optimization, in contrast to non-robust optimization, is investigated along with the impact of detailed storage models, which consider variable efficiencies and variable charging and discharging rates, in contrast to simple models, which consider constant storage efficiencies. Results show that the hybridization between lithium-ion and vanadium batteries positively influences the life of lithium-ion batteries, increasing its life by up to 47% compared to a case without hybridization. For a 10 MW wind farm, the optimal battery configuration is comprised of a hybrid system made of a 1 MW/1MWh LiB and a VRFB of negligible size, with 2 years of payback time. The simultaneous participation in both the DA and aFRR markets proves to be advantageous with annual revenue increases of 39%–56% compared to the system bidding on the sole DA market, regardless of the storage size. The revenue increase attributed to the battery installation does not ensure the feasibility of investment, due to the high cost of the battery technologies, even if the hybrid configuration proves to be more profitable than the non-hybrid configuration.