Evaluating battery energy storage systems: An analysis of their adoption with photovoltaic plants in Italy

Abstract

The integration of intermittent and non-programmable renewable energy sources (RES), especially photovoltaic and wind, in the energy system is today a major challenge for most developed countries, due to their widespread diffusion. Battery Energy Storage Systems (BESS) are a promising option to overcome the problems resulting from this integration. The Italian market for BESS is characterized by a relatively low amount of installed capacity, even though the penetration of RES in the energy system is remarkable. This paper aims to analyse the profitability of adopting BESS in a specific context, i.e. in association with photovoltaic (PV) plants in Italy, which strongly influence the further diffusion of such systems. The profitability of investing in a BESS in association with a PV plant is evaluated for three different application fields (each one characterized by different types of BESS and different sizes of the PV plant) located in two areas of the country (i.e. North and South of Italy). The indicators used for calculating the profitability are net present value (NPV) and discounted payback time (DPBT). The simulations show that such investments are not competitive compared to the adoption of PV plants alone, mainly due to the high BESS investment cost compared to the benefits that they ensure. In some cases, the investment has a good economic performance, strongly influenced by the BESS technology adopted. A subsequent sensitivity analysis brings into light the main variables influencing the profitability of investing in BESS associated with a PV plant in Italy, such as the level of energy self-consumption rate with BESS for residential plants and the BESS technology and the relative investment costs for industrial plants.