A mixed-integer linear programming model for BESS sizing optimization considering aging effects and emission costs

—With the rapid expansion of renewable energy sources (RES), battery energy storage systems (BESS) have become essential for ensuring grid stability, reliability, and operational efficiency. However, optimizing BESS sizing is a complex challenge that requires balancing economic, technical, and environmental factors while considering the long-term impact of battery degradation and replacement costs. This study presents a comprehensive optimization model for determining the optimal capacity of BESS within a microgrid, explicitly incorporating battery aging effects and associated lifecycle costs. The proposed model employs a mixed-integer linear programming (MILP) approach to minimize the total system cost, which includes investment, operation, and replacement expenses, while ensuring that load demand is met, RES integration is maximized, and system reliability is maintained. By considering the degradation of BESS performance over time, the model provides a more accurate estimation of long-term economic and technical feasibility. Simulation results validate the effectiveness of the model in optimizing BESS sizing and installation costs. Additionally, the study evaluates different BESS technologies and examines the impact of various factors, such as RES penetration and emission costs on overall system performance. The findings offer valuable insights into developing cost-effective BESS operation schedules and management strategies, contributing to improved energy efficiency and sustainability in microgrid applications. • MILP-based optimization for BESS sizing with aging and emission cost considerations • Incorporates depth-of-discharge effects to enhance battery lifespan analysis • Evaluates multiple operational scenarios for cost and efficiency trade-offs • Assesses renewable energy utilization under different emission pricing strategies • Provides insights for sustainable BESS deployment in microgrid applications