On the Financial Consequences of Simplified Battery Sizing Models without Considering Operational Details

TL;DR

This paper compares simplified battery sizing models with a practical operational model, revealing that oversimplifications can cause up to 22% financial losses in community battery storage projects over their lifespan.

Contribution

It introduces a battery sizing model that incorporates receding horizon operation, highlighting the financial impact of traditional simplifications.

Findings

Simplified models can lead to significant financial losses.

Practical operational models improve sizing accuracy.

Up to 22% cost savings with advanced modeling.

Abstract

Optimal battery sizing studies tend to overly simplify the practical aspects of battery operation within the battery sizing framework. Such assumptions may lead to a suboptimal battery capacity, resulting in significant financial losses for a battery project that could last more than a decade. In this paper, we compare the most common existing sizing methods in the literature with a battery sizing model that incorporates the practical operation of a battery, that is, receding horizon operation. Consequently, we quantify the financial losses caused by the suboptimal capacities obtained by these models for a realistic case study related to community battery storage (CBS). We develop the case study by constructing a mathematical framework for the CBS and local end users. Our results show that existing sizing methods can lead to financial losses of up to 22%.