Evaluating the value of batteries in microgrid electricity systems using an improved Energy Systems Model

A high-resolution model allowing for the comparison of different energy storage technologies in a variety of realistic microgrid settings has been developed. The Energy Systems Model (ESM) is similar to the popular microgrid software HOMER, but improves upon the battery models used in that program. ESM adds several important aspects of battery modeling, including temperature effects, rate-based variable efficiency, and operational modeling of capacity fade and we demonstrate that addition of these factors can significantly alter optimal system design, levelized cost of electricity (LCOE), and other factors. ESM is then used to compare the Aqueous Hybrid Ion (AHI) battery chemistry to lead acid (PbA) batteries in standalone microgrids. The model suggests that AHI-based diesel generator/photovoltaic (PV)/battery systems are often more cost-effective than PbA-based systems by an average of around 10%, even though the capital cost of AHI technology is higher. The difference in LCOE is greatest in scenarios that have lower discount rates, increased PV utilization, higher temperature, and more expensive diesel fuel. AHI appears to be a better complement to solar PV, and scenarios that favor the use of solar PV (low PV prices, low discount rates, and high diesel prices) tend to improve the LCOE advantage of AHI. However, scenarios that do not require constant cycling of the batteries strongly favor PbA. AHI is not a drop-in replacement for PbA. To minimize LCOE, microgrids using AHI batteries should be designed and operated differently than PbA microgrids.