New optimization techniques have emerged as powerful tools to address these challenges. By considering not only factors like electricity prices, demand forecasts, but also real time battery data and battery degradation, operators can make smarter decisions about when to charge, discharge, or idle their systems. These strategies not only boost immediate profitability but also preserve the long-term health of energy storage assets, ensuring increased long term profitability.

Market dynamics and energy storage optimization

Understanding market behavior is crucial for optimizing energy storage systems. Electricity prices fluctuate due to various factors like grid demand, renewable energy availability, and regulatory policies. Energy storage operators can take advantage of these price fluctuations by charging batteries when prices are low and discharging when prices are high. Other key revenue streams, like grid support and frequency regulation, also play a vital role. Grid support services, such as voltage regulation and load balancing, help stabilize the grid during periods of high demand or unexpected outages, ensuring operational efficiency. Frequency regulation, which maintains the grid’s correct operational frequency (typically 50 or 60 Hz), relies on energy storage to quickly respond to imbalances by either absorbing or releasing power.

Also see: Battery revenues forecast to rebound in 2026

Leveraging predictive algorithms enables energy storage systems to adjust their operations based on forecasted market trends, weather data, and regulatory signals. By doing so, operators can position their systems to enhance financial performance.

Battery degradation and lifecycle management

Battery degradation is one of the most significant challenges in energy storage operations, and its complexities go beyond the simple metrics of usage. The performance and longevity of a battery are influenced by a variety of interconnected factors, including depth of discharge, frequency of use, and temperature variations. For example, while deep discharge cycles can shorten battery life, it’s not just about how deep the discharge is, but also how frequently these deep cycles occur, the charging rates applied afterward, and the operational conditions under which the battery is used.

Frequent cycling causes wear and tear, but the specific effects of each cycle vary depending on the battery’s state of charge, thermal environment, and electrochemical properties. These factors create a highly intricate system where understanding how individual cycles impact battery lifetime—and long-term profitability—is an ongoing challenge. Battery health degradation is non-linear and difficult to predict without advanced monitoring systems and predictive analytics.

Read more about storage here

To extend battery life and maintain capacity, it is crucial to manage these factors with precision. Limiting deep discharges, optimizing charge cycles, and controlling operational temperatures are foundational practices, but the integration of real-time data analysis to predict degradation patterns is equally important. Proactive management through sophisticated lifecycle monitoring and adaptive control strategies not only reduces maintenance costs but also enhances the return on investment. A strategy that balances immediate operational efficiency with long-term battery health maximizes profitability and ensures the reliability of energy storage systems over time.

Operational constraints in battery systems

Optimizing energy storage is not just about market dynamics or degradation management. Operational constraints play a vital role in ensuring the system runs efficiently within its physical and technical limits. For instance, maintaining an optimal state of charge prevents both overcharging and deep depletion, which can damage the battery.

Also interesting: New guideline for increased fire protection in battery storage systems

Adhering to limits on charge and discharge rates is equally important. Exceeding these rates can lead to irreversible damage, reducing battery lifespan and effectiveness. Moreover, compliance with grid requirements, including power quality and frequency support, ensures seamless integration of energy storage into the grid. These operational parameters, when integrated into the optimization process, safeguard battery health and ensure sustained profitability over time.

Incorporating cost functions

Optimization is the process of making the best possible decisions to achieve specific goals while minimizing costs or maximizing efficiency. In the context of battery operation, optimization ensures that the battery system performs at its highest potential by making strategic decisions, like when to charge or discharge. A key tool in this process is the cost function, which assigns values to different operational scenarios based on factors like electricity prices, battery degradation, and market demand. By evaluating these factors, a well-designed cost function helps operators make data-driven decisions that improve real-time profitability and overall system efficiency.

See also: Maximizing energy storage efficiency

An innovative aspect of this approach lies in the ability of cost functions to integrate both short-term market dynamics and long-term operational goals. For example, an innovative cost function not only suggests charging during periods of low electricity prices and discharging during peak times but also incorporates insights into battery health and how much the operation will affect the long term profits. This allows operators to plan for operation at optimal times, extending the battery’s lifespan while maintaining revenues. By combining real-time market analysis with battery health, this advanced cost function ensures both immediate financial gains and prolonged system reliability.

Decision-making processes and optimization algorithms

The decision-making processes for managing Battery Energy Storage Systems (BESS) have been transformed by the introduction of sophisticated optimization algorithms. Unlike traditional approaches, where operators rely on static models or manual oversight, today’s data-driven systems enable dynamic, real-time decision-making that adapts to various factors such as market conditions, battery health, and grid demands. This shift marks a significant improvement over conventional methods, which often fail to capture the complexity of efficiently and sustainably operating modern energy storage systems.

Also interesting: Central & Eastern Europe – Utility-scale storage market set to increase fivefold by 2030

This new approach is revolutionary in several ways. It replaces the outdated, one-size-fits-all model of battery operation with one that is adaptive and intelligent. The algorithms take into account a variety of conditions, enabling operators to fine-tune system performance based on real-time data rather than relying on fixed schedules or reactive measures.
Moreover, these decision-making tools contribute significantly to sustainability.

By optimizing when and how batteries are used, operators can minimize wear and tear, reducing the need for frequent replacements and lowering lifecycle costs. This not only decreases material waste but also ensures that energy storage systems can operate longer before requiring upgrades or replacements. Additionally, by improving the efficiency of energy storage, these algorithms support the broader adoption of renewable energy sources like solar, accelerating the transition to a cleaner, more sustainable energy future.

Conclusion

The optimization of Battery Energy Storage Systems (BESS) through advanced algorithms has transformed energy management. Moving beyond traditional, reactive methods, these data-driven approaches enable real-time decision-making that boosts both efficiency and long-term profitability. By optimizing battery use, minimizing degradation, and extending system life, operators can increase revenues while ensuring sustainability and reducing waste.

Website of Reli Energy

This innovative approach balances short-term market gains with the widespread integration of renewable energy, positioning optimized BESS management as a key driver in the shift toward a more sustainable and profitable energy future.(Laura Laringe/hcn)





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Renewables remain competitive despite fossil fuel prices returning closer to historical cost levels, concludes Renewable Power Generation Costs in 2023, released by the International Renewable Energy Agency (IRENA) at the Global Renewables Summit during the UN General Assembly in New York.

Of the record 473 gigawatts (GW) added in 2023, 81% or 382 GW of newly commissioned, utility-scale renewable projects had lower costs than their fossil fuel-fired alternatives.

IRENA’s new report shows that after decades of falling costs and improving technology particularly for solar and wind, the socio-economic and environmental benefits of renewable energy deployment are now uniquely compelling.

4 US-cents/kWh average PV costs globally

With a spectacular decline in costs to around four US cents per kilowatt hour in just one year, solar photovoltaics (PV)’s global costs in 2023 were 56% lower than fossil fuel and nuclear options. Overall, the renewable power deployed globally since 2000 has saved up to USD 409 billion in fuel costs in the power sector.

IRENA’s Director-General Francesco La Camera said: “Renewable power remains cost-competitive vis-à-vis fossil fuels. The virtuous cycle of long-term support policies has accelerated renewables. In return, growth has led to technology improvements and cost reductions. Prices for renewables are no excuse anymore, on the contrary. The record growth of renewables in 2023 exemplifies this. Low-cost renewables represent a key incentive to significantly increase ambition and triple renewable power capacity by 2030, as modelled by IRENA and set by the UAE Consensus at COP28”.

Battery storage projects costs dropped by 89% since 2010

Achieving the tripling renewables target requires global renewable capacity to reach 11.2 terawatts (TW) by 2030, adding an average of 1044 GW of new capacity annually through 2030. 8.5 TW would come from solar PV and onshore wind alone according to IRENA’s World Energy Transitions Outlook.

Most importantly, the tripling goal must be accompanied by key energy transition enablers, such as storage. Battery storage project costs have dropped by 89% between 2010 and 2023, facilitating the integration of high shares of solar and wind capacity by helping address grid infrastructure challenges.

Also see: Large battery storage systems as new champions

La Camera added: “In the coming years, remarkable growth across all renewable energy sources is expected, giving countries great economic opportunities. Our analysis indicates that solar PV and onshore wind will have the biggest impacts on the tripling of renewables. Thanks to low-cost renewables in the global market, policy makers have an immediate solution at hand to reduce fossil fuels dependency, limit the economic and social damage of carbon-intensive energy use, drive economic development and harness energy security benefits.”

12% less costs for PV from new projects in 2023

In 2023, the global weighted average cost of electricity from newly commissioned renewable projects across most technologies fell, for solar PV by 12%, for onshore wind by 3%, for offshore wind by 7%, for concentrating solar power by 4% and for hydropower by 7%, the new IRENA report unveils.

In non-OECD economies where electricity demand is growing and new capacity is needed, renewable power generation projects with lower costs than fossil fuel-fired equivalents for their country and region will significantly reduce electricity system costs over the life of their operation.

Huge savings with renewables

In 2023, Asia registered the highest cumulative savings in the period between 2000-2010, estimated at USD 212 billion, followed by Europe with USD 88 billion and South America with an estimated USD 53 billion.

Also see: Rising energy demand affecting the pace of the energy transition

Renewable power generation has become the default source of least-cost new power generation. Policy makers and stakeholders should focus on ensuring that policies, regulations, market structures, support instruments, de-risking mechanisms, and financing are all rapidly aligned with the tripling target and submitted in the next round of Nationally Determined Contributions to the Paris Agreement in 2025. (hcn)





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