Abstract
Effective modelling and management of battery energy capacity degradation are key prerequisites for the large-scale deployment of battery storage systems. This paper proposes a revenue-maximization model that determines the optimal operation of a battery storage system in short-term energy markets. The assessment of the energy capacity fade is embedded within the optimization problem, which also determines long-term capacity revamping actions involving the replacement of degraded cells with brand-new ones. The methodology introduces a novel formulation that enables optimal utilization of the full energy capacity of the asset, increasing the potential value of revamping actions and preventing the underestimation of capacity degradation. Results indicate that the proposed methodology significantly increases the net revenue compared to previous formulations.