Optimal Scheduling of Battery Storage Systems in the Swedish Multi-FCR Market Incorporating Battery Degradation and Technical Requirements

TL;DR

The paper tackles profitable scheduling of battery energy storage systems (BESS) in the Swedish multi-FCR market while explicitly modeling battery degradation and complying with Swedish market technical requirements. It introduces a novel MILP framework that jointly optimizes day-ahead trading and stacked FCR bids (FCR-N, FCR-D up, FCR-D down) using one-minute data for 2022, and incorporates a detailed calendar and cycle aging degradation model. Key findings show that multi-market participation can yield high profits (e.g., about €708k for a 1 MW/1 MWh BESS) with degradation costs reduced by 5–29% when degradation is included in the objective, highlighting sustainable operation strategies. The model serves as an actionable benchmark (oracle) for flexibility asset owners to maximize profitability while mitigating degradation under realistic market constraints.

Abstract

This paper develops a novel mixed-integer linear programming (MILP) model for optimal participation of battery energy storage systems (BESSs) in the Swedish frequency containment reserve (FCR) markets. The developed model aims to maximize the battery owner's potential profit by considering battery degradation and participation in multiple FCR markets, i.e., FCR in normal operation (FCR-N), and FCR in disturbances (FCR-D) for up- and down-regulations. Accordingly, a precise formulation of a detailed battery degradation model and adherence to the technical requirements of the Swedish FCR markets are incorporated into the developed model. To achieve more practical results, simulations are conducted based on one minute time step realistic data for the whole year 2022. The results show a potential profit of 708 thousand Euros for a 1MW/1MWh BESS by participating in multi-FCR market. Analyzing the impact of considering degradation in the optimization problem has shown that the annual battery aging cost could decrease by 5%-29% without a significant effect on profit. The proposed model can be practically used by flexibility asset owners to achieve profitable and sustainable operation strategies that reduce battery degradation.

Figures (7)

• Figure 1: Motivations, contributions, and benefits of the conducted study.
• Figure 2: FCR activation power based on grid frequency: (a) FCR-N, (b) FCR-D
• Figure 3: Limits on FCR capacity bids considering the baseline and ENTSOe requirements on power. N: $P_h^\mathrm{\Theta,N}$, DU: $P_h^\mathrm{\Theta,DU}$, DD: $P_h^\mathrm{\Theta,DD}$
• Figure 4: Examples of critical activation cases for endurance requirement when reference power is at charging. (a) downwards regulation, (b) upwards regulation
• Figure 5: The battery utilization in different cases visualized by the histogram of battery SoE ($\mathcal{S}_t$) and power ($p_t$) as a percentage of all time step in a year