Energy management and arbitrage in PV-integrated hybrid energy storage systems with an environmental assessment

Renewable energy sources are clean and sustainable, but their intermittency challenges grid stability. Energy storage systems address this by enabling flexibility and daily arbitrage. Lithium-ion batteries (LIB) offer high power density and commercial maturity, while vanadium redox flow batteries (VRFB) provide long cycle life and decoupled energy-power capacity. This study evaluates a hybrid energy storage system (25 kW/75 kWh LIB + 25 kW/75 kWh VRFB) integrated into a 100 kW PV plant across four distinct multi-seasonal scenarios, using EXIST day-ahead market prices. Simulations reveal that while a conventional rule-based strategy superficially appears to yield higher gross revenues by exploiting short-term price thresholds, it aggressively depletes battery reserves and imposes severe cyclical stress. In contrast, the proposed Mixed-Integer Linear Programming (MILP) strategy guarantees sustainable operation by enforcing a strict daily state-of-charge (SoC) neutrality constraint. The optimization layer intelligently allocates short-term power fluctuations to the LIB and sustained bulk energy shifting to the VRFB, maximizing true net arbitrage profit while strictly penalizing degradation. Finally, from an environmental perspective, while using clean energy is positive, poor cycle-life management accelerates chemical waste. By strategically protecting the LIB from deep discharges, the proposed MILP framework significantly delays battery disposal burdens, demonstrating that degradation-aware power dispatch is essential for both economic viability and life-cycle sustainability.