  Revenue potential from offshore wind and energy storage systems for a Long
Island node in the New York ISO (NYISO) is examined using advanced lithium-ion
battery representations. These advanced mixed-integer-linear battery models
account for the dynamic performance, as well as the degradation behavior of the
batteries, which are usually not accounted for in power systems models.
Multiple hybrid offshore wind and battery system designs are investigated to
examine the impact of locating the battery offshore versus locating it onshore.
For the examined systems, we explore different battery usable state-of-charge
(SOC) windows, and corresponding dispatch of the battery to maximize energy-
and capacity-market revenues. The impacts of variability of offshore wind
output along with energy- and capacity-market prices are evaluated using
publicly available data from 2010 to 2013. Locating the battery onshore
resulted in higher revenues. For 2013, results highlight that without accurate
battery representations, models can overestimate battery revenues by up to
155%, resulting primarily from degradation-related costs. Using advanced
algorithms, net revenue can be increased by 29%. Results also indicate that
wider useable SOC windows could lead to higher net revenues from the energy
market, due to higher arbitrage opportunities that compensate for any
additional degradation-tied costs in higher DODs. The added value of a MWh of
energy storage varies from $2 to $3.5 per MWh of wind energy, which leads to a
breakeven cost range of $50-$95 per kWh for the battery systems studied. As
such, energy- and capacity-market revenues were found to be insufficient in
recovering the investment costs of current battery systems for the applications
considered in this analysis.
