Renewable Energy Storage Achieves Best Financial Return with 2-Hour Batteries, Berkeley Lab Says

Dive brief:

  • Developers looking to take advantage of the growing popularity of hybrid power plants, which combine renewable energy production with on-site storage, may have thousands of cost-effective configurations to choose from, according to a report. new analysis from Lawrence Berkeley National Laboratory (LBNL).

  • Of the more than 100,000 potential combinations of battery, generation and interconnection options modeled by the Berkeley Lab team, 46% would be economically attractive when combined with existing incentives for the investment tax credit. and PTC production, according to Cristina Crespo Montañés, a research affiliate at the Berkeley Lab and one of the report’s authors. Without the tax credits, 20% of the setups had positive net worth.

  • Configurations using short-lived batteries, particularly 2-hour batteries, offer the highest financial returns, according to the study. Although battery prices continue to fall, the cost of larger batteries still exceeds potential energy gains.

Dive overview:

Pairing on-site storage with new renewable energy projects is an increasingly popular option – 36% of grid-connected solar projects in 2020 were associated with batteries, according to LBNL. However, not all possible combinations of production and batteries would be profitable under recent market conditions.

The researchers modeled potential combinations of the myriad of choices available to developers today – batteries with different specifications, inverters, interconnect options and, of course, the type of generation itself. While primarily intended to create a flexible program to quickly test market and policy issues as they arise, the researchers also fed the model with 2012-2019 market data from the seven operators of independent American system to test which of the many configurations would work best in real-world scenarios.

According to the lab’s analysis, both solar and wind hybrid projects generate the best financial returns when paired with 2-hour storage. The increase in storage capacity and the size of the interconnection had the greatest impact on the potential revenue of the project, after battery life, which proved to be the most important factor in financial performance. hypothetical of a project.

In general, the best performing hybrid configurations in the model were those designed to take advantage of peak energy pricing periods to offset the relatively high cost of lithium-ion batteries, according to Will Gorman, LBNL graduate student researcher. . and also one of the authors of the report. For example, dimensioning the interconnection of the hybrid power plant to allow simultaneous discharge of the batteries and wind or solar production has proven to be a winning combination.

But in all seven ISOs, energy prices couldn’t cover the costs associated with longer-lasting batteries, according to the report.

“The market is not currently sending signals that it needs very long-term storage,” Gorman said. “But the market is generally low penetration of renewable energies. We don’t envision 100% renewable energy systems in the next 5-10 years.

The analysis generally reflects real-world trends against data from hybrid power plants already deployed in the United States, Montañés said in a webinar presentation on Wednesday. For example, the model indicated that solar hybrids would have higher revenues than wind hybrids; solar hybrids are actually more widespread than wind power. However, in some cases the results differed from the real world experience. In the California Independent System Operator, Montañés said, interconnect queues appear to limit the connection size of hybrid developments, where the model shows that larger interconnection would be more advantageous.

U.S. developers are also showing a preference for shorter life batteries, with most deployed storages using batteries lasting 1 to 4 hours, according to the report.

Gorman noted that the challenge of making long-term battery storage economical is probably why most long-term storage projects have focused on finding cheaper alternatives to lithium-ion batteries. But that, Montañés said, does not mean that batteries have no place in the grid of the future.

“We believe that the different generation sources are complementary, allowing for different schedules or types,” she said. “We can also think of storage in the same way. “

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