Techno-economic analysis and life cycle design optimization of demand-side hybrid energy storage under different climates and electricity markets

The demand side plays a critical role in achieving carbon neutrality, particularly through the deployment of distributed photovoltaics and hybrid energy storage systems. However, previous studies have not adequately addressed the key factors, such as storage degradation and nonlinear operation optimization, in optimal storage design due to the highly complex and time-consuming process of life cycle assessment. This study, therefore, proposes a systematic and efficient life cycle optimization framework to identify optimal demand-side storage compositions and conducts a comparative techno-economic analysis under typical climate zones and electricity markets. The proposed method adopts K-means clustering for typical day selection and mixed-integer quadratic programming for storage operation optimization, which effectively improves computational efficiency and ensures reliable decision-making while considering life cycle degradation. Results for office buildings show a strong preference for cooling storage in subtropical regions with significant cooling demand, where a cooling storage ratio of 8.03% achieves life cycle cost savings of up to 3.42 times the initial investment. Conversely, regions with lower cooling demands prefer battery storage, and the temperate climate zone is not considered a suitable location for investment in both types of storage. If battery costs are reduced below 180 $/kWh, the economic benefits of hybrid storage composition become more evident than those of cooling storage alone, even in cooling-dominated zones.