System value assessment method of energy storage system for multi‐services of power system considering battery degradation

The energy storage system (ESS) is a promising technology to address issues caused by the large‐scale deployment of renewable energy. Deploying ESS is a business decision that requires potential revenue assessment. Current value assessment methods focus on the energy storage owner or the electricity utility. The system value of the ESS needs to be fully considered to gain a broad understanding of benefits across the whole power system. Thus, this study proposes a system value assessment method of grid‐integrated ESS to quantify the total system value‐avoided cost based on an improved DC power flow model considering transmission losses. Four typical applications (production cost saving, upgrade deferral, environmental benefit, and transmission loss saving) are chosen to represent the system value of the ESS across the whole power system. In addition, the co‐optimisation model considering the “source‐grid‐storage” coordination operation and battery capacity degradation, is proposed for peak shaving and frequency regulation based on the Chinese power market rule. The proposed method is tested in simulation and experimental studies.