Second-Life Batteries for Grid Flexibility and Renewable Integration

The increasing penetration of renewable energy sources in modern power systems introduces significant operational and economic challenges, since solar and wind generation are inherently variable and only partially dispatchable. Their fluctuating output may contribute to network congestion, frequency stability issues, and increased electricity price volatility. In this context, Battery Energy Storage Systems (BESS) represent an important source of flexibility, enabling services such as energy time-shifting, frequency and voltage support, congestion mitigation, and energy arbitrage. At the same time, the rapid diffusion of electric vehicles (EVs) is expected to generate a substantial number of end-of-life traction batteries in the coming years. Although these batteries are no longer suitable for automotive applications, they typically retain 70–80% of their original capacity and may therefore still provide valuable performance for stationary storage applications. This paper investigates the technical and economic potential of second-life batteries, compared with conventional first-life BESS technologies, for grid-connected storage systems, renewable energy integration, microgrids, and behind-the-meter applications. To this aim, a two-stage mixed-integer linear programming (MILP) framework is proposed. In the first stage, the optimal charging and discharging schedule of the BESS is determined using historical load, renewable generation, and electricity market data. In the second stage, the Net Present Value (NPV) of the investment is maximized in order to identify the optimal storage sizing configuration. The proposed methodology is validated through a real case study including photovoltaic generation, electrical loads, and battery storage. The results show that the economic viability of second-life batteries strongly depends on factors such as the cost difference with respect to first-life batteries, the residual state of health, and the revenues achievable through services including arbitrage, peak shaving, and flexibility support. The paper highlights the conditions under which second-life batteries can represent a technically feasible and economically attractive solution for stationary energy storage applications.