Degradation-Aware Bi-Level Optimization of Second-Life Battery Energy Storage System Considering Demand Charge Reduction
Many electric vehicle (EV) batteries will retire in the next 5–10 years around the globe. These batteries are retired when no longer suitable for energy-intensive EV operations despite having 70–80% capacity left. The second-life use of these battery packs has the potential to address the increasing...
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| Format: | Article |
| Language: | English |
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MDPI AG
2025-07-01
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| Series: | Energies |
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| Online Access: | https://www.mdpi.com/1996-1073/18/15/3894 |
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| author | Ali Hassan Guilherme Vieira Hollweg Wencong Su Xuan Zhou Mengqi Wang |
| author_facet | Ali Hassan Guilherme Vieira Hollweg Wencong Su Xuan Zhou Mengqi Wang |
| author_sort | Ali Hassan |
| collection | DOAJ |
| description | Many electric vehicle (EV) batteries will retire in the next 5–10 years around the globe. These batteries are retired when no longer suitable for energy-intensive EV operations despite having 70–80% capacity left. The second-life use of these battery packs has the potential to address the increasing demand for battery energy storage systems (BESSs) for the electric grid, which will also create a robust circular economy for EV batteries. This article proposes a two-layered energy management algorithm (monthly layer and daily layer) for demand charge reduction for an industrial consumer using photovoltaic (PV) panels and BESSs made of retired EV batteries. In the proposed algorithm, the monthly layer (ML) calculates the optimal dispatch for the whole month and feeds the output to the daily layer (DL), which optimizes the BESS dispatch, BESSs’ degradation, and energy imported/exported from/to the grid. The effectiveness of the proposed algorithm is tested as a case study of an industrial load using a real-world demand charge and Real-Time Pricing (RTP) tariff. Compared with energy management with no consideration of degradation or demand charge reduction, this algorithm results in 71% less degradation of BESS and 57.3% demand charge reduction for the industrial consumer. |
| format | Article |
| id | doaj-art-9a6b0423043c4cd49b3e6f9ade8364a4 |
| institution | DOAJ |
| issn | 1996-1073 |
| language | English |
| publishDate | 2025-07-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Energies |
| spelling | doaj-art-9a6b0423043c4cd49b3e6f9ade8364a42025-08-20T03:02:55ZengMDPI AGEnergies1996-10732025-07-011815389410.3390/en18153894Degradation-Aware Bi-Level Optimization of Second-Life Battery Energy Storage System Considering Demand Charge ReductionAli Hassan0Guilherme Vieira Hollweg1Wencong Su2Xuan Zhou3Mengqi Wang4Department of Electrical and Computer Engineering, University of Michigan, Dearborn, MI 48128, USADepartment of Electrical and Computer Engineering, University of Michigan, Dearborn, MI 48128, USADepartment of Electrical and Computer Engineering, University of Michigan, Dearborn, MI 48128, USADepartment of Electrical and Computer Engineering, University of Michigan, Dearborn, MI 48128, USADepartment of Electrical and Computer Engineering, University of Michigan, Dearborn, MI 48128, USAMany electric vehicle (EV) batteries will retire in the next 5–10 years around the globe. These batteries are retired when no longer suitable for energy-intensive EV operations despite having 70–80% capacity left. The second-life use of these battery packs has the potential to address the increasing demand for battery energy storage systems (BESSs) for the electric grid, which will also create a robust circular economy for EV batteries. This article proposes a two-layered energy management algorithm (monthly layer and daily layer) for demand charge reduction for an industrial consumer using photovoltaic (PV) panels and BESSs made of retired EV batteries. In the proposed algorithm, the monthly layer (ML) calculates the optimal dispatch for the whole month and feeds the output to the daily layer (DL), which optimizes the BESS dispatch, BESSs’ degradation, and energy imported/exported from/to the grid. The effectiveness of the proposed algorithm is tested as a case study of an industrial load using a real-world demand charge and Real-Time Pricing (RTP) tariff. Compared with energy management with no consideration of degradation or demand charge reduction, this algorithm results in 71% less degradation of BESS and 57.3% demand charge reduction for the industrial consumer.https://www.mdpi.com/1996-1073/18/15/3894battery energy storagesecond-life batteriesdemand chargecircular economyenergy management |
| spellingShingle | Ali Hassan Guilherme Vieira Hollweg Wencong Su Xuan Zhou Mengqi Wang Degradation-Aware Bi-Level Optimization of Second-Life Battery Energy Storage System Considering Demand Charge Reduction Energies battery energy storage second-life batteries demand charge circular economy energy management |
| title | Degradation-Aware Bi-Level Optimization of Second-Life Battery Energy Storage System Considering Demand Charge Reduction |
| title_full | Degradation-Aware Bi-Level Optimization of Second-Life Battery Energy Storage System Considering Demand Charge Reduction |
| title_fullStr | Degradation-Aware Bi-Level Optimization of Second-Life Battery Energy Storage System Considering Demand Charge Reduction |
| title_full_unstemmed | Degradation-Aware Bi-Level Optimization of Second-Life Battery Energy Storage System Considering Demand Charge Reduction |
| title_short | Degradation-Aware Bi-Level Optimization of Second-Life Battery Energy Storage System Considering Demand Charge Reduction |
| title_sort | degradation aware bi level optimization of second life battery energy storage system considering demand charge reduction |
| topic | battery energy storage second-life batteries demand charge circular economy energy management |
| url | https://www.mdpi.com/1996-1073/18/15/3894 |
| work_keys_str_mv | AT alihassan degradationawarebileveloptimizationofsecondlifebatteryenergystoragesystemconsideringdemandchargereduction AT guilhermevieirahollweg degradationawarebileveloptimizationofsecondlifebatteryenergystoragesystemconsideringdemandchargereduction AT wencongsu degradationawarebileveloptimizationofsecondlifebatteryenergystoragesystemconsideringdemandchargereduction AT xuanzhou degradationawarebileveloptimizationofsecondlifebatteryenergystoragesystemconsideringdemandchargereduction AT mengqiwang degradationawarebileveloptimizationofsecondlifebatteryenergystoragesystemconsideringdemandchargereduction |