Impact of modeling assumptions on the economic performance assessment of a storage participating in energy and reserve markets

Ahmed Mohamed (), Rémy Rigo-Mariani () and Vincent Debusschere ()
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Ahmed Mohamed: G2Elab-SYREL - G2Elab-SYstèmes et Réseaux ELectriques - G2ELab - Laboratoire de Génie Electrique de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes
Rémy Rigo-Mariani: G2Elab-SYREL - G2Elab-SYstèmes et Réseaux ELectriques - G2ELab - Laboratoire de Génie Electrique de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes, G2ELab - Laboratoire de Génie Electrique de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes
Vincent Debusschere: Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes

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Abstract: This paper investigates the impact of key modeling assumptions for the sizing of a Battery Energy Storage Systems (BESSs) participating in energy and reserve markets. Most of the related studies in the literature assume oversimplifications of the operating conditions when computing the expected BESS revenues at the design stage. These considerations oftentimes consist of (i) constant operating efficiency of the BESS, (ii) neglected profit loss due to uncertainties in the operating phase, and (iii) degradation effects that are usually computed in a posteriori analysis. This paper then proposes to successively assess the impact of those modeling assumptions, deriving from a baseline scenario that embeds oversimplifications. At first, results are analyzed in terms of expected revenue decrease compared to the baseline for different BESS sizes, and with the participation in Day-Ahead (DA) and Frequency Containment Reserve (FCR) markets. The analysis reveals that up to 30 % overestimation (more than 60 % in the worst cases) of the profit along the project lifetime could be done in case where the key modeling assumption are simplified. Finally, a sensitivity analysis conducted with different trade-offs between BESS usage (i.e. degradation) and profits shows that the systems displaying power-to-energy ratios of 1 or 0.5 were the most profitable under the markets investigated.

Keywords: Energy markets; Battery energy storage systems; Frequency reserve; Price uncertainty and degradation (search for similar items in EconPapers)
Date: 2025-10
New Economics Papers: this item is included in nep-ene
Note: View the original document on HAL open archive server: https://hal.science/hal-05212162v1
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Published in Journal of Energy Storage, 2025, 133, pp.117998. ⟨10.1016/j.est.2025.117998⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05212162

DOI: 10.1016/j.est.2025.117998

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