Increased deployment of intermittent renewable energy plants raises concerns about energy security and energy affordability. Capacity markets (CMs) have been implemented to provide investment stability to generators and secure energy generation by reducing the number of shortage hours. The research presented in this paper contributes to answering the question of whether batteries can provide cost effective back up services for one year in this market. The analysis uses an equivalent circuit lithium ion battery model coupled with two degradation models (empirical and semi-empirical) to account for capacity fade during battery lifetime. Depending on the battery’s output power, four de-rating factors of 0.5 h, 1 h, 2 h and 4 h are considered to study which de-rating strategy can result in best economic profit. Two scenarios for the number of shortage hours per year in the CM are predicted based on the energy demand data of Great Britain and recent research. Results show that the estimated battery profit is maximum with 2 h and 1 h de-rating factors and minimum with 4 h and 0.5 h. Depending on the battery degradation model used, battery degradation cost can considerably impact the potential profit if the battery’s temperature is not controlled with adequate thermal management system. The empirical and semi-empirical models predict that the degradation cost is minimum at 5 °C and 25 °C respectively. Moreover, both models predict degradation is minimum at lower battery charge levels. While the battery’s capacity fade can be minimized to make some profits from the CM service, the increased shortage hours can make providing this service not economically viable.

Capacity markets (CM) are energy markets created to ensure energy supply security. Energy storage devices provide services in the CMs. Li-ion batteries are a popular type of energy storage device used in CMs. The battery lifetime is a key factor in determining the economic viability of Li-ion batteries, and current approaches for estimating this are limited. This paper explores the potential of a lithium-ion battery to provide CM services with four de-rating factors (0.5 h, 1 h, 2 h, and 4 h). During the CM contract, the battery experiences both calendar and cycle degradation, which reduces the overall profit. Physics-based battery and degradation models are used to quantify the degradation costs for batteries in the CM to enhance the previous research results. The degradation model quantifies capacity losses related to the solid–electrolyte interphase (SEI) layer, active material loss, and SEI crack growth. The results show that the physics-based degradation model can accurately predict degradation costs under different operating conditions, and thus can substantiate the business case for the batteries in the CM. The simulated CM profits can be increased by 60% and 75% at 5 °C and 25 °C, respectively, compared to empirical and semiempirical degradation models. A sensitivity analysis for a range of parameters is performed to show the effects on the batteries’ overall profit margins.

Lithium-ion batteries are recognised as a key technology to power electric vehicles and integrate gridconnected renewable energy resources. The economic viability of these applications is affected by the battery degradation during its lifetime. This study presents an extensive experimental degradation data for lithium-ion battery cells from three different manufactures (Sony, BYD and Samsung). The Sony and BYD cells are of LFP chemistry while the Samsung cell is of NMC. The capacity fade and resistance increase of the battery cells are quantified due to calendar and cycle aging. The charge level and the temperature are considered as the main parameters to affect calendar aging while the depth of discharge, current rate and temperature for cycle aging. It is found that the Sony and BYD cells with LFP chemistry has calendar capacity loss of nearly 5% and 8% after 30 months respectively. Moreover, the Samsung NMC cell reached 80% state of health after 3000 cycles at 35C and 75% discharge depth suggesting a better cycle life compared to the other two battery cells with the same conditions.

This paper presents a SWOT analysis of the impact of recent EU regulatory changes on the business case for energy storage (ES) using the UK as a case study. ES technologies (such as batteries) are key enablers for increasing the share of renewable energy generation and hence decarbonising the electricity system. As such, recent regulatory changes seek to improve the business case for ES technologies on national networks. These changes include removing double network charging for ES, defining and classifying ES in relevant legislations, and clarifying ES ownership along with facilitating its grid access. However, most of the current regulations treat storage in a similar way to bulk generators without paying attention to the different sizes and types of ES. As a result, storage with higher capacity receives significantly higher payment in the capacity market and can be exempt from paying renewable energy promotion taxes. Despite the recent regulatory changes, ES is defined as a generation device, which is a barrier to a wide range of revenue streams from demand side services. Also, regulators avoid disrupting the current energy market structure by creating an independent asset class for ES. Instead, they are encouraging changes that co-exist with the current market and regulatory structure. Therefore, although some of the reviewed market and regulatory changes for ES in this paper are positive, it can be concluded that these changes are not likely to allow a level playing field for ES that encourage its increase on energy networks.

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