Niazi, Muhammad Ahsan, Kumar, Vikram, Aslam, Usama, Saeed, Nagham ORCID: https://orcid.org/0000-0002-5124-7973, Aurangzeb, Muhammad and Shah, Syed Abid Ali (2026) An adaptive MPEC-based hierarchical framework for Co-optimizing virtual power plant profit and battery energy storage system health. Future Batteries, 9.

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Abstract

A growing number of Distributed Generators (DG) will be part of Virtual Power Plants (VPPs), thus necessitating the ability to optimize profit on markets as well as equipment longevity; especially for battery energy storage systems (BESS). An economic dispatch process can widen the "Dispatch-Control Gap", and accelerate the degradation of a BESS by forcing it into partial-cycles. This paper presents a new hierarchical two-stage procedure that closes this gap. The upper stage utilizes a mathematical program with equilibrium constraints (MPEC) for optimization of the markets, including new monotone constraints to prevent the partial-cycle degradation of the BESS when planning is performed. The lower stage employs an on-line controller to control the operation of the BESS Fleet while controlling degradation. A feedback loop enables the economic model to learn the true cost of degradation from the experience of the controller. The results of simulation over a 90 day period demonstrate the proposed method of reducing the long term degradation of the BESS by approximately 22 % relative to traditional methods. This improved sustainability provides a statistical increase to the overall life cycle profitability of the VPP, demonstrating that a health conscious, hierarchical methodology provides superior economics.

Item Type:	Article
Identifier:	10.1016/j.fub.2026.100161
Keywords:	Battery Energy Storage System; Battery Degradation; Virtual Power Plant; Mathematical Program with Equilibrium Constraints
Subjects:	Construction and engineering > Electrical and electronic engineering
Date Deposited:	30 Sep 2026
Dates:	Date Publication status 19 February 2026 Accepted 20 February 2026 Published Online
School, department or research centre:	School of Computing and Engineering
Keywords:	Battery Energy Storage System; Battery Degradation; Virtual Power Plant; Mathematical Program with Equilibrium Constraints
URI:	https://repository.uwl.ac.uk/id/eprint/15477

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