A comprehensive optimization tool for PV-BESS co-location for trading in the market

Sammanfattning

The transition to renewable energy sources has increased the demand for flexible and efficient energy storage solutions to address the variability of power generation. This master’s thesis focuses on the development of an optimization tool to determine the optimal sizing of a Battery Energy Storage System (BESS) co-located with a photovoltaic (PV) power plant. The tool is designed to support financial and technical decision-making by evaluating the viability of hybrid projects under different operational and market conditions. The work has them been applied to a 10 MW PV system in Hallstahammar, Sweden. Key functionalities of the tool include solar power generation forecasting, an initial price prediction model for electricity wholesale markets, and the integration of the BESS into frequency regulation markets, particularly FCR-D (Frequency Containment Reserve for Disturbances). Additionally, the tool incorporates a battery degradation model to assess the long-term impact of various operating strategies on the system's economic performance. Arbitrage operations lead to 36.2% capacity fading, while FCR-D participation results in a lower degradation rate around 11.5% primarily due to calendar aging rather than deep cycling. By simulating multiple scenarios and considering regulatory, market, and technological constraints, the tool provides insights into optimal system configurations that maximize revenues from market participation while minimizing degradation-related costs. The proposed approach enables stakeholders to make informed decisions regarding the implementation of co-located PV-BESS projects, contributing to the decarbonization of energy systems and enhancing grid stability. The results indicate that arbitrage is not a viable strategy under current market conditions, yielding a negative Net Present Value (NPV) across all scenarios. Conversely, FCR-D participation offers a significantly more favorable economic outcome, with optimal BESS sizes of 41 MW, generating an NPV of up to €1.78 million. Furthermore, in Scenario 3, leveraging excess PV generation contributes an additional €1.08 million in revenue. This study demonstrates the potential of co-location projects to improve the integration of renewable energy into the grid while ensuring the profitability and reliability of energy storage investments. The findings underscore the importance of market selection, as FCR-D participation provides stable revenue streams and justifies larger BESS capacities, while arbitrage alone remains unprofitable.