Optimal Capacity and Cost Analysis of Battery Energy Storage System in Standalone Microgrid Considering Battery Lifetime

In standalone microgrids, the Battery Energy Storage System (BESS) is a popular energy storage technology. Because of renewable energy generation sources such as PV and Wind Turbine (WT), the output power of a microgrid varies greatly, which can reduce the BESS lifetime. Because the BESS has a limited lifespan and is the most expensive component in a microgrid, frequent replacement significantly increases a project's operating costs. This paper proposes a capacity optimization method as well as a cost analysis that takes the BESS lifetime into account. The weighted Wh throughput method is used in this paper to estimate the BESS lifetime. Furthermore, the well-known Particle Swarm Optimization (PSO) algorithm is employed to maximize battery capacity while minimizing the total net present value. According to simulation results, the optimal adjusting factor of 1.761 yields the lowest total net present value of US$200,653. The optimal capacity of the BESS can significantly reduce the net present value of total operation costs throughout the project by extending its lifetime. When applied to larger power systems, the proposed strategy can further reduce total costs.