Date of Award
School of Engineering
Battery Energy Storage Systems (BESS) participating in frequency regulation services in MISO (Midcontinent Independent System Operator) energy markets do so by charging from and discharging to the bulk electrical grid to satisfy power demands. Frequency regulation can demand a high energy throughput from a BESS, causing electrochemical aging. The aging of a BESS must be controlled to within financially feasible limits. MISO has proposed new frequency regulation prioritization policies that enable a BESS to manage its own aging by setting its acceptable State of Charge (SOC) range, called its neutral zone. MISO will seek to prioritize a BESS’ regulation so as to maintain a BESS’ SOC within its neutral zone. This work develops and employs a deterministic mixed integer linear programming energy storage valuation tool written in MATLAB to model and simulate the operation of a BESS participating in the regulation market under MISO’s proposed policy changes. This “Constrained Energy Storage Model” tool, CONESMO, is used to determine a BESS project’s internal rate of return for quantized non-dynamic neutral zone ranges under user-defined conditions. A 20 MW / 60 MWh BESS is simulated with CONESMO under several conditions, concluding that limiting battery aging will be a primary financial consideration. The simulations support the intuitive conclusion that a BESS co-located with a generation asset is most profitable when the neutral zone’s limits facilitate the selling of energy and to utilize behind-the-meter charging to restore SOC neutrality. The work also shows non-trivial BESS energy throughput, highlighting the importance of BESS electrochemical life cycle management.
McCarthy, Patrick J., "Modelling the Financial Effects of Naïve Neutral Zone Limits on Energy Storage Systems Participating in Midwest ISO Energy Markets Under Frequency Regulation Prioritization Policies" (2018). Masters Theses. 894.