Optimal Sizing of Battery Energy Storage Systems Considering Degradation Effect for Operating and Electricity Cost Minimization in Microgrids

A microgrid is a low‐voltage distribution network designed to provide power for small‐scale and isolated communities consisting of distributed generation and energy storage systems. In order to achieve reliable power and proper energy utilization, energy storage systems plays a vital role in microgrids by storing energy during off peak hours and discharges energy during peak hours. One of the major issues in the isolated microgrids with intermittent nature of distributed generations is the balance of energy demand. This can be achieved by appending renewable energy sources with suitable battery energy storage systems (BESS), to provide the reserve support in meeting the load demand. Battery degradation effect plays a major role in analyzing the performance of BESS lifetime. Battery degradation effect relates the capacity reduction of energy of BESS that is to be delivered to meet the load demand. Therefore, microgrid systems with BESS considering degradation effect should be optimized in such a way as to obtain minimum operating cost while ensuring minimum electricity cost to customers. Simulations of hourly battery discharges rates and simulation of actual discharge rates with obtained simulated rates need to be calculated to determine the degradation effect. The battery degradation cost and lifetime can be calculated correspondingly to minimize the objectives. Correspondingly, herein, an optimization algorithm for microgrid operating cost and customer electricity cost minimization for 24 h time horizon while considering BESS degradation effect by determining kWh and MWh throughput is presented. Particle swarm optimization (PSO), accelerated particle swarm optimization (APSO), Jaya optimization (JAYA) technique, and linear programming interior point algorithm (LP‐IP) are applied to determine the optimal operating cost and electricity cost by simulating BESS degradation parameters. Results obtained using PSO, APSO, JAYA are compared with LP‐IP solver‐based algorithm for BESS lifetime, BESS degradation cost, microgrid operating cost, and customer electricity cost for 24 h. Microgrids are low‐voltage distribution networks that are designed to provide power for small‐scale and isolated communities consisting of distributed generations (DGs) and energy storage systems. Determining appropriate size of BESS in terms of power and energy capacities helps to provide the reserve support in meeting the load demand in microgrids. Battery degradation effect plays a maj