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Grid-scale battery energy storage operation in Australian electricity spot and contingency reserve markets


Bayborodina, E and Negnevitsky, M and Franklin, Evan and Washusen, A, Grid-scale battery energy storage operation in Australian electricity spot and contingency reserve markets, Energies, 14, (23) pp. 1-21. ISSN 1996-1073 (2021) [Refereed Article]


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Copyright 2021 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https://

DOI: doi:10.3390/en14238069


Conventional fossil-fuel-based power systems are undergoing rapid transformation via the replacement of coal-fired generation with wind and solar farms. The stochastic and intermittent nature of such renewable sources demands alternative dispatchable technology capable of meeting system stability and reliability needs. Battery energy storage can play a crucial role in enabling the high uptake of wind and solar generation. However, battery life is very sensitive to the way battery energy storage systems (BESS) are operated. In this paper, we propose a framework to analyse battery operation in the Australian National Electricity Market (NEM) electricity spot and contingency reserve markets. We investigate battery operation in different states of Australia under various operating strategies. By considering battery degradation costs within the operating strategy, BESS can generate revenue from the energy market without significantly compromising battery life. Participating in contingency markets, batteries can substantially increase their revenue with almost no impact on battery health. Finally, when battery systems are introduced into highly volatile markets (such as South Australia) more aggressive cycling of batteries leads to accelerated battery aging, which may be justified by increased revenue. The findings also suggest that with falling replacement costs, the operation of battery energy systems can be adjusted, increasing immediate revenues and moving the battery end-of-life conditions closer.

Item Details

Item Type:Refereed Article
Keywords:electricity markets, ancillary services, arbitrage, energy storage, battery degradation
Research Division:Built Environment and Design
Research Group:Architecture
Research Field:Architectural computing and visualisation methods
Objective Division:Manufacturing
Objective Group:Machinery and equipment
Objective Field:Machinery and equipment not elsewhere classified
UTAS Author:Bayborodina, E (Mrs Ekaterina Bayborodina)
UTAS Author:Negnevitsky, M (Professor Michael Negnevitsky)
UTAS Author:Franklin, Evan (Associate Professor Evan Franklin)
ID Code:152233
Year Published:2021
Deposited By:Engineering
Deposited On:2022-08-15
Last Modified:2022-09-05
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