Multi-Level Simulation Framework for Degradation-Aware Operation of a Large-Scale Battery Energy Storage Systems

Abstract

The increasing integration of renewable energy sources necessitates efficient energy storage solutions, with large-scale battery energy storage systems (BESS) playing a key role in grid stabilization and time-shifting of energy. This study presents a multi level simulation framework for optimizing BESS operation across multiple markets while incorporating degradation-aware dispatch strategies. The framework integrates a day ahead (DA) dispatch level, an intraday (ID) dispatch level, and a high-resolution simulation level to accurately model the impact of operational strategies on state of charge and battery degradation. A case study of BESS operation in the German electricity market is conducted, where frequency containment reserve provision is combined with DA and ID trading. The simulated revenue is validated by a battery revenue index. The study also compares full equivalent cycle (FEC)-based and state-of-health-based degradation models and discusses their application to cost estimation in dispatch optimization. The results emphasize the advantage of using FEC-based degradation costs for dispatch decision-making. Future research will include price forecasting and expanded market participation strategies to further improve and stabilize the profitability of BESS in multi-market environments.