# Energy Cost Minimization with Hybrid Energy Storage System Using Optimization Algorithm
## 4 Discussion  
The overall aim of this work is to present an economic optimization algorithm for hybrid energy storage that will improve the financial outcome of the setup and show that the hybrid energy storage is a feasible solution to improve the self-consumption of energy from PV installation. The results of the simulations for the benchmark and the proposed HESS control strategies are summarized in Table 2.  
The first part of the table focuses on the energy between the facility and the power grid. The batteries generally decrease the import and export of energy; the energy balancing approach is the most limited, due to the fact that it only operates on the surplus of the energy produced by the PV installation. The economic optimizations are realizing arbitrage all year round--buying energy when it is cheap and using it during peak times. The self-consumption rates are interesting--this is the percentage of the energy produced by the PV installation that was used within the installation, which show that, thanks to the batteries, over 77% of the produced energy is either directly consumed or stored for later  
Figure 28: Results for the economic optimization method with modifications—data for 6 February: (a) grid power balance, (b) energy usage and production (input data), (c) batteries power, (d) batteries state of charge. Figure 29: Results for the economic optimization method with modifications—monthly economic indicators: (a) purchase cost classified by tariff zones (tariff prices), (b) costs, profits and financial balance, (c) costs of energy saved by PV generation, (d) costs of energy saved by HESS operation. use. The difference between the storage management methods in this context is very small, which shows that any storage increases the use of energy from PV and that the optimization algorithms are rationally using the surplus from the PV production. The second section of Table 2 presents the costs of import and profit from the export of energy. Although profits from exports are clearly correlated with the self-consumption rate, the cost of imports are affected by the cost in tariff zones. Here, the energy balancing method has the highest cost but uses the lowest amounts of import, which clearly demonstrates that economic optimization methods manage to shift energy between the zones. The subsequent section presents the summary of the batteries' operation. Battery charge and discharge energy is accumulated over the year to estimate the annual throughput and calculate energy losses. Equivalent cycles are calculated using discharge energy, nominal capacity and \(DoD\). This, in turn, is used to estimate the lifetime of each battery within HESS, allowing the estimation of the point in the investment horizon that replaces the battery blocks. The economic optimization approaches make much more use of the energy storage, and thus also shorten its lifetime. The financial outcome accounts for energy trading costs (which include battery losses) and for the depreciation of each battery (to account for the cost of battery block replacement at the end of the expected battery lifetime). For comparison, the values of financial outcome without depreciation costs was presented as this better shows how much the depreciation of the battery costs. Energy balancing uses every opportunity to charge batteries with surplus generation that would be exported otherwise. As soon as the load is larger than generation, stored energy is used to supply loads. Energy balancing does not cycle batteries at all in winter time, when the PV installation does not generate surplus energy. It can be assumed that a single battery performs on average one cycle every two days. As a result, the balancing algorithm generates almost no cost savings in the winter months when the HESS stays in an idle state. \begin{table}
\begin{tabular}{c c c c c c} \hline \hline  & **Unit** & **Without HESS** & \begin{tabular}{c} **Energy** \\ **Balancing** \\ \end{tabular}  & \begin{tabular}{c} **Economic** \\ **Optimization** \\ \end{tabular}  &