How will degradation affect your battery? Well, all lithium-ion batteries degrade with use. We know this from our mobile phones - after a few years of use, the length of time that they hold their charge reduces.
The same is true for stationary battery energy storage applications. Over time, the system will degrade. This reduces the total energy that the system can hold. But what causes this degradation?
To understand degradation, we need to go back to basics. Time for a quick chemistry lesson!
Chemistry 101: How does a lithium-ion battery work?
Lithium-ion batteries are made of an anode (typically graphite), a lithium-based cathode (commonly lithium-iron-phosphate (LFP) or lithium-nickel-manganese-cobalt (NMC)), and a liquid electrolyte that separates the two.
When the battery discharges, positively-charged lithium ions move from the negative anode toward the positive cathode via the electrolyte. This movement of ions causes a flow of electrons in the other direction, which produces a current - and electricity. Charging the battery works in reverse, with ions flowing from the cathode to the anode.
Why does this cause degradation?
This chemical process happens every time the battery charges or discharges. This process causes physical changes to the battery, which cause degradation.
To start, a solid-electrolyte interphase (SEI) layer forms on the surface of the anode. This is caused by the liquid electrolyte solidifying when reacting with the anode.
This layer traps lithium ions, restricting them from flowing between the anode and cathode. This ultimately reduces the energy the battery can store and discharge.
A further cause of degradation is lithium plating. This is where metallic lithium forms on the surface of the anode when it can’t be absorbed. This captures more lithium ions and can cause the SEI to grow, further reducing energy capacity.
Excessive lithium plating can also cause the creation of dendrites. These excessive build-ups of metallic lithium can cause physical damage to the battery itself and even more catastrophic failures.
How does degradation change with use?
To some extent, batteries are degrading all the time. However, it gets worse every time the battery charges or discharges.
Charging and discharging can be measured in cycles - one cycle is equal to one full discharge of a battery's energy capacity.
This can either be done in one go (such as when wholesale trading), or in smaller bursts across a longer period of time (such as when providing frequency response).
The more cycles a battery does, the more degraded the battery becomes. Figure 2 (below) shows an example degradation curve for a battery energy storage system - based on different cycling rates.
It is common for the most severe degradation to occur at the beginning of the system's use - with degradation of up to 10% occurring in just the first year of use. The cell chemistry, the materials used, and the manufacturing quality will determine the amount of degradation.
Do certain actions worsen degradation?
Degradation occurs, to a small extent, passively - but worsens every time the system is used. Because of the nature of degradation, however, some actions will cause worse effects than others:
- High-power activities (i.e. actions at maximum power output).
- High depth of discharge activities (i.e. discharging from full to empty).
- Operation at extreme levels of state of charge.
- Operation at extreme temperatures.
Avoiding these activities will reduce the impact of degradation on the battery. However, it's common for safeguards to be in place to protect the most damaging actions (e.g. limits to the state of charge that can be reached).
How does this impact revenues?
It is important to understand how degradation will impact the business case for battery storage.
Wholesale trading
Degradation will reduce the system's energy capacity over time, reducing the amount of energy that can be discharged. This will reduce the value that can be obtained from trading activities.
Ancillary services
Degradation will also reduce the effective duration of the system. This means certain ancillary services can no longer be provided at the same power.
However, this only happens when certain thresholds are met - for example, Dynamic Containment can be provided in full with just a 30-minute storage duration. By contrast, Dynamic Regulation requires a 2-hour duration.
Capacity Market
Degradation can also impact Capacity Market contracts. Battery energy storage with T-4 contracts must pass ‘extended performance tests,’ demonstrating their ability to meet their contract for the specified duration. Degradation may put battery storage with 15-year contracts at risk of being unable to meet these tests in later years.
For longer-lasting projects, degradation can lead to the need for a cell refresh. This essentially renews the battery cells for the site, restoring energy capacity which had otherwise been affected by degradation.
How does this link to warranties?
Battery energy storage systems come with a warranty - i.e. a guarantee, provided by the OEM, that a certain level of degradation will not be exceeded, as long as operation of the system stays within certain limits.
This will typically be a set number of cycles for each year - but may also limit cycles within a day, the time spent operating at certain levels of state of charge, or other stipulations. Managing these while maximizing revenues is key to an optimizer’s role in operating a battery.
As the warranty protects against excessive degradation, keeping to it can be one of the most important parts of battery operation. As such, the negotiation of warranties forms an important part of the procurement of battery energy storage assets.