Economic Optimal Power Management of Second-Life Battery Energy Storage Systems

TL;DR

This work tackles the economic optimization of second-life BESS (SL-BESS) by modeling electrical, thermal, and degradation dynamics for heterogeneous retired packs and formulating a cost-minimization problem that jointly accounts for energy loss, degradation, and decommissioning. The authors introduce a weighted Ah-throughput aging model to quantify degradation under varying temperature and C-rate, and they design a convex-like optimization that allocates power across packs without enforcing inter-pack SoC or SoH balancing. Simulation studies across two aging scenarios show consistent 6–10% reductions in total operation cost, with energy loss typically dominating and decommissioning contributing a smaller share. The results demonstrate the practical viability of economically guided power management for SL-BESS and provide insights into pack selection and lifecycle economics for grid-scale storage applications.

Abstract

Second-life battery energy storage systems (SL-BESS) are an economical means of long-duration grid energy storage. They utilize retired battery packs from electric vehicles to store and provide electrical energy at the utility scale. However, they pose critical challenges in achieving optimal utilization and extending their remaining useful life. These complications primarily result from the constituent battery packs' inherent heterogeneities in terms of their size, chemistry, and degradation. This paper proposes an economic optimal power management approach to ensure the cost-minimized operation of SL-BESS while adhering to safety regulations and maintaining a balance between the power supply and demand. The proposed approach takes into account the costs associated with the degradation, energy loss, and decommissioning of the battery packs. In particular, we capture the degradation costs of the retired battery packs through a weighted average Ah-throughput aging model. The presented model allows us to quantify the capacity fading for second-life battery packs for different operating temperatures and C-rates. To evaluate the performance of the proposed approach, we conduct extensive simulations on a SL-BESS consisting of various heterogeneous retired battery packs in the context of grid operation. The results offer novel insights into SL-BESS operation and highlight the importance of prudent power management to ensure economically optimal utilization.

Figures (18)

• Figure 1: The considered SL-BESS design for grid energy storage.
• Figure 2: The SL-BESS operating cost structure.
• Figure 3: Steady-state temperature of the battery pack under varying C-rates and environmental temperatures. The constituting cells' parameters are $h=5.8$, $m=0.072$ kg, $c_{\textrm{th}}=1150$ J/kg.K, $A=0.0053$ m2, $R_0=0.008$$\Omega$.
• Figure 4: Second-life capacity fading in relation to Ah-throughput.
• Figure 5: The remaining total Ah-throughput with respect to C-rate.