1. Basic Concepts
1. DOD (Depth of Discharge)
DOD refers to the percentage of the battery’s capacity that has been discharged during use, typically expressed in A·h or as a percentage (%). The calculation formula is:
DOD = (Discharged Amount / Rated Capacity) × 100%
This parameter describes the extent to which the battery has been consumed during use.
For example: If a battery with a rated capacity of 314Ah discharges 200Ah, then DOD = 200/314 = 63.69%.
The depth of discharge significantly impacts the performance and lifespan of the battery. Generally, the greater the depth of discharge, the shorter the cycle life of the battery. Research shows that reducing DOD by 10% can increase the cycle count by 50%. For lithium iron phosphate batteries, the cycle life at 100% DOD is about 2000 cycles, while at 80% DOD it can exceed 6000 cycles, and at 50% DOD it can even surpass 12000 cycles. This is because deep discharge exacerbates the migration of lithium ions between the anode and cathode, leading to structural damage to the electrode materials and decomposition of the electrolyte, thereby accelerating capacity degradation.
Lithium iron phosphate batteries have relatively high structural stability and can accept a relatively high DOD, typically maintaining good performance between 80%-90%. However, operating consistently above 80% DOD will still lead to capacity degradation. Keeping DOD between 15%-85%, along with a good temperature control system, can achieve a longer lifecycle. In contrast, ternary lithium batteries are more sensitive to deep discharge due to their layered structure, and it is recommended to control DOD between 20%-80% to balance energy density and lifespan. For lead-acid batteries, the optimal DOD is usually between 30%-50%.
Currently, the widely accepted cycle life in the energy storage industry is under the conditions of 25℃, 80% DOD, 0.5C/0.25C, EOL 80% (the end-of-life standard for lithium iron phosphate batteries is when capacity degrades to 80% of the initial capacity). However, in actual design or bidding, the standards are often raised to: 25℃, 90% DOD, 0.5C/0.25C, EOL 70%.
2. SOC (State of Charge)
SOC refers to the ratio of the current remaining battery capacity to the current maximum available capacity, typically expressed as a percentage (%). The calculation formula is:
SOC = (Current Remaining Capacity / Current Maximum Available Capacity) × 100%
Under conditions without considering battery degradation: SOC = 1 – DOD. However, in practical applications, batteries degrade each year, and the battery health (SOH) must be considered in calculations (SOH = Current Performance ÷ Factory Performance × 100%). This means that a battery with an SOH of 90% will only have 90% of its original capacity, even if its SOC shows 100% when fully charged.
In simple terms, SOC is like the battery percentage displayed on our mobile phone screen, constantly reminding us how much battery is left.
2. Impact on Power Station Operations
1. Impact on Frequency Regulation
The frequency regulation revenue of energy storage stations in China is closely related to the actual provided adjustment power and adjustment mileage.
The core goal of SOC management is to keep the battery charge stable within a middle “golden window” (e.g., 20%-80%), thereby maximizing the assurance that:
A. Avoid “having energy but not being able to use it,” losing work opportunities.
When the charge reaches 95% (almost full) or drops to 5% (almost empty), the grid may instruct you to charge, but you cannot take in more, or instruct you to discharge, but you cannot push out.
It’s like a weightlifter who is too full to move or too hungry to perform. The result is missing the current “competition” (frequency regulation instruction) and earning no revenue.
The ideal state is to maintain “half-full” combat power, keeping the charge between 20% and 80% in the “golden zone.”
B. Pursue “performing well” to earn higher performance bonuses.
China’s frequency regulation market adopts a performance-based compensation mechanism, where the performance coefficient K includes adjustment rate, response time, and adjustment accuracy. The higher the K value, the more revenue is earned. If SOC limitations prevent full compliance with instructions, it will lead to a decrease in performance scores, significantly reducing revenue per unit of adjustment mileage.
C. Learn to “secretly recover energy” to maintain lasting combat power.
Single frequency regulation instructions typically last less than 5 minutes. After multiple rounds of frequency regulation instructions (i.e., frequent short-term charging and discharging), the ideal state of charge may shift, such as charging to 80% or discharging to 30%, necessitating the establishment of SOC recovery strategies.
The essence of the strategy is to pull the charge back to around 50% during the intervals of grid instructions, using low power without affecting frequency regulation performance.
It’s like an athlete quickly drinking water during a break in a match, rather than asking for a pause during intense competition. The timing and method of this “water break” directly determine whether they can continue to perform efficiently in the next round, affecting the total revenue for the entire season.
2. Impact on Energy Revenue
DOD is positively correlated with peak-valley arbitrage revenue. If DOD decreases from 90% to 80%, a 200MWh energy storage station’s single discharge amount will decrease by 20MWh, resulting in a loss of 6000 yuan in revenue based on a peak-valley price difference of 0.3 yuan/kWh. At the same time, it should also be considered that DOD is negatively correlated with battery cycle life. Under DOD=90% conditions, the cycle life can exceed 5000 cycles (capacity retention ≥70%), while under DOD=80% conditions, the cycle life can exceed 6000 cycles. If the battery is consistently overcharged or over-discharged, degradation will accelerate, potentially reducing cycle life by 40%, increasing battery replacement costs.
Small measures: One is to reduce the limitations of the “barrel effect” to support higher DOD. A “string-type, single-cluster management” topology design can avoid inter-cluster circulating currents, preventing local battery cells from being overcharged or over-discharged, effectively improving the overall DOD and discharge amount of the system (some data suggest an increase of 4%-5%). Currently, the design level of DOD for energy storage stations is 90%. The second is an efficient BMS, PCS, and EMS control protection mechanism, which requires a high degree of integration, and the alignment of control, protection, detection, and execution has a decisive impact on the success rate of system protection.
SOC’s core impact on peak-valley arbitrage lies in capturing price difference opportunities, ensuring there is enough spare capacity to charge during low-price periods and sufficient energy to discharge during high-price periods.
A. Charging and discharging timing:
If at the start of the low-price period, SOC is very high due to frequency regulation service (responding to frequency regulation charging instructions), it will not be able to charge sufficiently, losing the opportunity to buy low. Conversely, if at the start of the high-price period, SOC is very low due to frequency regulation service (responding to frequency regulation discharging instructions), it will not be able to discharge sufficiently, losing the opportunity to sell high.
B. Cycle efficiency and degradation:
Single deep charge and discharge (e.g., using SOC from 20% to 90% each time) has a greater impact on battery degradation than shallow charge and discharge (cycling between 40%-60%).
Although a single deep cycle can earn more price differences, it will also accelerate battery degradation, affecting the life cycle cost (LCOS). Therefore, it is essential to avoid SOC being at extreme values (0% or 100%) for extended periods and controlling the depth of discharge (DOD) helps extend lifespan, thereby increasing total arbitrage income over the entire lifecycle.
C. Cycle efficiency and degradation:
When participating in the energy market with volume bidding, it is necessary to declare your SOC operating range to the trading center, including the initial SOC (the battery charge at the start of the trading day, usually at 0:00), SOC upper and lower limits (e.g., 20%-80%, to protect battery operating life and safety), and expected end-of-day SOC (the SOC level to be reached by the end of the trading day, which relates to preparations for the next trading day). To maximize capturing price differences, SOC adjustments and management are required.
To maximize profit, actual energy storage stations typically set wider SOC upper and lower limits during operation, such as 100%-5%? 90%-10%? Specific settings should also respond to the arrangements of the scheduling agency. If participating in both spot and frequency regulation markets, SOC should be set reasonably based on the awarded frequency regulation power.
3. SOC Adjustment and Management
A. Daily Adjustment (Real-time Adjustment)
Although the market clearing plan is pre-determined, actual situations (such as price fluctuations and equipment status) may change, necessitating daily SOC adjustments.
Adjustment Goal: Reserve “ammunition” for high-price periods. If it is predicted that electricity prices will soar in the afternoon, SOC needs to be raised to a sufficiently high level through charging in the morning or at noon to ensure there is enough energy to discharge profitably in the afternoon.
Capture unplanned arbitrage opportunities: Real-time electricity prices may experience unexpected significant fluctuations. For example, a sudden drop in new energy output may cause electricity prices to soar. Even if you originally planned to charge, you may need to switch to discharging to earn excess profits, which will quickly consume SOC.
Maintain SOC within a safe range: Ensure SOC always operates within the declared upper and lower limits to avoid damaging the battery.
Adjustment Methods: Participate in real-time balancing markets/frequency regulation auxiliary service markets, which is the most flexible way to adjust SOC. These markets clear on a minute or second basis, allowing you to respond to market signals quickly with small-scale charging and discharging to fine-tune SOC while also earning service fees.
Self-scheduling (within the rules): In the spot market, you can autonomously adjust output within a certain range based on real-time electricity prices, deviating from the original plan. For example, if the real-time electricity price is significantly lower than the charging quote, you can choose to charge more than planned to increase SOC.
B. Cross-day Adjustment and Strategic Management
SOC management requires a long-term perspective, not just looking at one day.
End-of-day SOC setting: The SOC at the end of today determines the SOC at the start of tomorrow. If your model predicts higher electricity prices tomorrow, you may want to maintain a higher SOC at the end of today, even if it means giving up the last few discharge opportunities today. Conversely, the opposite applies.
Responding to seasonal/structural changes: For example, during flood season (when hydropower generation is high and electricity prices are low), the strategy may be to charge more to accumulate energy; during dry seasons or peak electricity usage periods, the strategy may be to find the best time to discharge. This requires a cross-week or even cross-month SOC strategic plan.
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