Optimized Sizing of Battery Energy Storage Systems in the Energy Arbitrage Business for Industrial Customers

Abstract:
Battery Energy Storage Systems (BESS) are a promising technology to provide the flexibility required for the energy transition. Due to more volatile electricity prices and falling costs of battery cells, energy-intensive costumers are gaining interest in BESS as a measure to reduce their electricity costs. This work proposes a Mixed-Integer Nonlinear Programming (MINLP) approach for optimal BESS sizing aimed at industrial customers incorporating battery aging, degradation, and investment scale effects. The developed formulation is tested using a case study, in which a BESS is sized for a metal processing company with a large photovoltaic system in Germany using realistic system data. In addition, a sensitivity analysis is conducted to investigate the influence of electricity prices, available budget and different system combinations. The results show that the proposed approach effectively determines the optimal BESS size and system feasibility. The sensitivity analysis reveals that higher electricity price volatility and adequate budget allocation greatly enhance the economic viability of BESS. Different system configurations also play a critical role in optimizing profitability, indicating investment advantages when utilizing site synergies.