Potential benefits and challenges of deploying Battery Energy Storage Systems in co-location with existing Wind Power Plants in Congested Grid Areas in Sweden

Sammanfattning

The acceleration of electrification in Sweden is increasingly constrained by distribution grid bottlenecks, especially in southern Sweden. This thesis investigates whether a utility-scale lithium-ion battery energy storage system (BESS) can be connected to a congested 130 kV distribution grid without triggering costly and time-consuming grid reinforcements, and whether co-locating the battery with an existing 80MW wind power plant (WPP) outperforms a stand-alone installation. A mixed-methods research design combines a mixed integer linear programming (MILP) simulation model and a costbenefit analysis with semi-structured interviews with the three largest Swedish distribution system operators (DSO). The analysis uses a 30 MW, 120 MWh battery and assesses its value in four different grid connection concepts: one stand-alone BESS and three types of hybrid concepts with the existing WPP. The results shows that the “standard co-location” hybrid parkprovide the best returns, indicating that BESS-WPP hybrid parks are better than standalone BESS and that the ability to import energy from the grid increases revenue a lot compared to being forced to only charge the BESS from the WPP. In addition, two nonfirm conditional grid connections are evaluated to assess the business impact of accepting to not charge the BESS from the grid when the grid already is highly loaded. The results show that for both conditional connections tested, the returns are almost as high as when the BESS can utilize the grid freely, suggesting that conditional connections are a viable option for BESS deployment in the studied congested grid area. Qualitative findings indicate that the main obstacles to implementing BESS in constrained grids are lack of insight into BESS activation patterns and regulatory barriers, rather than technical obstacles. The uncertainty about battery dispatch, a lack of regulatory frameworks for handling BESS grid connection processes, limitations surrounding ownership of energy storage and profiting from flexibility for DSOs, and the contractual complexity of conditional grid connections lead to a conservative approach to new BESS installations in constrained grids. The study concludes that co-locating BESS with existing wind farms, and employing well-designed conditional grid agreements, can unlock a higher value compared to strictly limiting grid import when grid constraints are present. It recommends that for energy arbitrage, Swedish BESS-developers should favor longer duration batteries and co-location projects for increased profitability and more efficient grid utilization, that DSOs adopt data-driven conditional agreements based on available capacity in their grid and that regulators and policymakers allow for long-term conditional agreements for energy storage where local flexibility markets don't make economic sense. Future work should consider the actual available capacity in a distribution grid and quantify the value a BESS could provide if it actively supports the grid during peak-load hours.