Optimal Battery Sizing for Frequency Regulation and Energy Arbitrage

This paper proposes an optimization methodology for sizing and operating battery energy storage systems (BESS) in distribution networks. A BESS optimal operation for both frequency regulation and energy arbitrage, constrained by battery state-of-charge (SoC) requirements, is considered in the proposed optimization algorithm. We use utility historical data as input in a case study on a real-world distribution circuit. The results indicate that a BESS generally brings high profits by participating in the frequency regulation market and should be sized to its highest allowable power capacity rather than its energy capacity.