Hybrid power plants are catching on. But only some are cost effective.
Hybrid power plants, combining generation and battery storage, are catching on. Of the 170 GW of solar projects entering the grid interconnection queues in 2020, 36 percent were paired with batteries. Indeed solar/storage hybrids accounted for 21 percent of all capacity entering the queues last year.
But not all hybrid plants are the same. Different configurations of generators and storage can affect the competitiveness of a plant. Regional and locational market dynamics can determine its relative value and profitability.
To explore this development trend, we calculated the costs and revenues of wind and solar hybrids across a wide range of configurations, using historical wholesale market power prices in the seven U.S. organized wholesale power markets from 2012 to 2019.
The configurations we looked at varied by battery duration, battery power capacity, size of the grid interconnection capacity relative to the generator power capacity, the size of PV panels relative to the inverter capacity, and the way that batteries and generators are coupled.
Figure 1: Summary of the Research
We found that battery duration and capacity have the largest impact on the net value of solar and wind hybrids. With currently available tax incentives, the most attractive hybrids tend to have a two-hour battery duration, with little difference to four-hour durations, and have batteries sized at either 25 percent or 100 percent of the solar generator nameplate capacity, depending on the region.
Figure 2: Impact of battery capacity (x-axis) and duration (legend) on hybrid net value, with 100MW of PV generation capacity and available tax incentives.
We found benefits to sizing the interconnection to the grid to be large enough to accommodate the simultaneous discharge of the generator and the battery, as opposed to just the generator. A bigger hookup allows a plant to take advantage of high-value times by delivering maximum power to the market. This is particularly true for solar hybrids in the ERCOT and Southwest Power Pool regions, where peak summer afternoon prices (ERCOT) or high bilateral capacity prices (SPP) are significant contributors to net value.
Figure 3: Net value differences based on the capacity of the point of interconnection.
Our analysis seems to align with current commercial trends of online and proposed hybrid projects, suggesting that our net value framework can be used to understand recent commercial development activity and how it may change.
This report, Keep it short: Exploring the impacts of configuration choices on the recent economics of solar-plus-battery and wind-plus-battery hybrid energy plants, is available on the Berkeley Lab website at emp.lbl.gov. The authors are Cristina Crespo Montañés, Will Gorman, Andrew D. Mills, and James Hyungkwan Kim. Questions about the research can be sent to [email protected].
The report is the latest in a series of research products on hybrid power plants, including:
- Motivations and options for deploying hybrid generator-plus-battery projects within the bulk power system, March 2020: This article explores the advantages, disadvantages, development trends, value proposition, and market participation options for U.S. utility-scale hybrid battery projects.
- Are coupled renewable-battery power plants more valuable than independently sited installations?, May 2021: This paper assesses how pricing differences between nodes within an electricity market impact the system value of coupled renewable/battery projects, as compared to independent wind, solar, and battery installations.
- Hybrid Energy Systems: Opportunities for Coordinated Research, April 2021, with the DOE Hybrids Task Force. This report was prepared by DOE and its National Laboratories to establish the state-of-the-art in hybrid energy system research, to highlight challenges, and to identify high-priority, near-term opportunities.
- Hybrid Power Plants: Status of Installed and Proposed Projects, July 2021: This briefing tracks and maps existing hybrid or co-located plants across the United States, synthesizing data mined from power purchase agreements (PPAs) and generation interconnection queues to shed light on near- and long-term development pipelines.
Funding for this series of reports was provided by the Office of Energy Efficiency and Renewable Energy’s Strategic Analysis Team at the U.S. Department of Energy.