*Article* **Battery Degradation Impact on Long-Term Benefits for Hybrid Farms in Overlapping Markets**

**Pedro Luis Camuñas García-Miguel 1,\*, Jaime Alonso-Martinez 1, Santiago Arnaltes Gómez 1,\*, Manuel García Plaza <sup>2</sup> and Andrés Peña Asensio <sup>2</sup>**


**Abstract:** Participation in the electricity market requires making commitments without knowing the real generation or electricity prices. This is problematic for renewable generators due to their fluctuating output. Battery energy storage systems (BESSs) integrated with renewable sources in a hybrid farm (HF) can alleviate imbalances and increase power system flexibility. However, the impact of battery degradation on long-term profitability must be taken into account when choosing the correct market participation strategy. This study evaluates the state-of-the-art on energy management systems (EMS) for HFs participating in day-ahead and intraday markets, incorporating both BESSs' calendar and cycling degradation. Results suggest that efforts to attain additional profits in intraday markets can be detrimental, especially when the degradation effect is considered in the analysis. A new market participation strategy is proposed that aims to address the limitations of market overlapping and forecasting errors. The results demonstrate that the proposed method can enhance long-term benefits while also reducing battery degradation.

**Keywords:** BESS; optimization; degradation; markets
