Abstract
This study investigates the techno-economic feasibility of deploying a second-life battery energy storage system (BESS), using a school in Oslo, Norway, as a pilot case. A mixed-integer linear programming (MILP) model is developed to evaluate the performance of one to six second-life battery modules (40 kWh/20 kW each), integrated with on-site photovoltaic (PV) generation. Two operational strategies are assessed: a baseline case involving self-consumption and dynamic price optimization, and a local flexibility market (LFM) case that enables the system to provide capacity reserves. The model used 2024 load and generation measured data to simulate energy flows and economic performance. Under the baseline scenario, a system with six second-life battery modules had a simple payback period of approximately 11.4 years. Participation in the LFM significantly improved economic outcomes, reducing the payback period by 1.4 years, given the current market activation rates. The findings indicate that second-life BESS can be economically viable in non-residential buildings, especially when integrated into LFM. Additionally, targeted subsidies and improved on-site solar self-consumption can enhance the attractiveness of these investments by offsetting capital costs and increasing the value derived from energy. These results highlight the potential of second-life batteries as a cost-effective solution for storage and flexibility, as well as for supporting broader energy transition goals by extending battery lifespans and promoting circular energy practices.