What I have found so far and what I usually do is defining the optimum gridblock size in a reservoir model by running multiple cases with fine and then coarser gridblock sizes then find a compromise between simulation accuracy and run time.
I am not sure if there is a method to pre-define the optimum gridblock size that does not result in large reduction of accuracy without the need of making multiple runs (maybe based on governing equations of reservoir simulation). I am more interested in areal since vertical is governed by heterogeneity mostly. The issue raises again when trying to use paeudo relative permeability to reduce number of gridblocks. Here, I am not trying to eliminate a geological aspect and I am aware simulation is governed by geological aspects and data, but for the same homogenous model, the more gridblocks (the finer the model), the slower the fluid front is simulated. Example, injecting water in one gridblock that is two gridblocks away from producer will result in faster breakthrough than the model has 20 gridblocks between producer and injector. One method used is the pseudo modelling, however that is also time consuming (closed loop).
Please let me know if you are aware of such a method/fast guess. Many thanks in advance.