  Battery swapping as a business model for battery energy storage (BES) has
great potential in future integrated low-carbon energy and transportation
systems. However, frequent battery swapping will inevitably accelerate battery
degradation and shorten the battery life accordingly. To model the tradeoff of
BES use between energy and transportation applications coupled by battery
swapping, we develop a life-cycle decision model that coordinates battery
charging and swapping. This model is derived based on an improved intertemporal
decision framework, in which the optimal marginal degradation cost (MDC) of BES
is determined to maximize the BES benefit across time and application. The
proposed framework and model are applied to manage a battery swapping station
that simultaneously provides battery swapping services to electric vehicle
customers and provides flexibility service to the power grid, including energy
arbitrage and reserve. The case study shows that while the end of the physical
life of BES occurs faster with battery swapping, the economic life becomes
considerably longer. The results also reveal that the optimal MDC depends on
the battery values in each application, and we analyze how the battery swapping
price affects the optimal MDC and battery life. The proposed framework and
model can also provide decision support for on-demand BES service, such as
battery trading, renting and secondary use.
