Batteries in hybrid hydro-PV systems could increase profitability by 2%

Researchers from Norway have discovered that adding batteries to projects that combine hydropower and floating PV could increase annual profits by as much as 2%, due to revenues from ancillary services and capacity markets.

December 15, 2023 Lior Kahana

System sketch of hybrid hydro-FPV-battery power plant

Image: Institute for Energy Technology, Journal of Energy Storage, CC BY 4.0 DEED

Scientists from Norway’s Institute for Energy Technology have assessed the profitability of battery storage in hybrid hydropower and floating PV plants. They have found that the profitability of such facilities could be increased by up to 2%.

The scientists ran cost-optimal assessments for systems with and without batteries, and then compared their profitability in light of capacity markets, ancillary services, and energy arbitrage.

“This paper investigates the profitability potential for a viable business case for battery storage integration with utility-scale hybrid hydropower-solar photovoltaic plants,” they said. “It is based on a hypothetical, two-reservoir cascaded hydropower plant in Sub-Saharan Africa.”

The research team maintained constant characteristics for hydropower plants in the simulation, with a 36 MW turbine and a 90 MW turbine. The hybrid power plant operated under a power purchase agreement (PPA), with fixed capacities for both hydropower and the power grid restricted to 126 MW.

“In this study, a two-level configuration is assumed to represent a scenario in which electricity is more valuable during daytime,” the researchers said. “The same two-level shape persists throughout the entire year.”

The optimization model adjusted the capacity of the floating PV and the battery. The south-oriented floating PV system, with a fixed 13-degree tilt, used crystalline silicon PV modules with 19.9% efficiency and total system losses of 13%. The Li-ion LFP battery incorporated irradiation levels from the PVGIS SARAH2 dataset, a web application providing solar radiation and PV system energy production data.

The scientists said that for the base case result, the cost-optimal PPA power levels were 12.7 MW at $60/MWh and 118.6 MW at $100/MWh.

“The co-optimized case, in which both battery and [floating PV] are optimized for cost-efficiency, increases profitability by 0.6% compared to the base case,” they said.

With ancillary service revenue, the base case annual profitability could reach 2%, factoring in battery degradation constraints. The model assumed a 15-year battery lifetime, preventing it from reaching a state of health below 80% after this period, considering additional cycles from ancillary services.

The academics said that energy arbitrage “provided economic benefits for the hydro-floating PV power plant, but batteries were not necessary, and variable spot prices make predictability and value stacking difficult.”

The academics presented their findings in “Profitability of battery storage in hybrid hydropower–solar photovoltaic plants,” which was recently published in the Journal of Energy Storage.

Annual revenue of the proposed system
*Image: Institute for Energy Technology, Journal of Energy Storage, CC BY 4.0 DEED*

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