Impacts of economic regulation on photovoltaic distributed generation with battery energy storage systems

Abstract

Photovoltaic systems are largely involved in the process of decarbonization of the electricity production. Among the solutions of interest for deploying higher amounts of photovoltaic (PV) energy generation for reducing the electricity taken from the grid, the inclusion of local battery energy storage systems has been considered. Battery energy storage provides an energy buffer useful to better manage the fluctuations of PV energy production, or to serve the demand when the PV generation is absent or insufficient and the price of the electricity taken from the grid is high. While technically sound, the installation of a PV system with battery energy storage has to demonstrate its profitability in the specific context of application, also depending on the regulation in place in the relevant jurisdiction. This paper presents the stochastic economic feasibility analysis for the installation of distributed photovoltaic power plants facing the new Brazilian regulation of electric energy compensation system, and also considers the hourly tariff known as White Tariff. Three different sizes of distributed power plants are proposed, and the related models introduce battery banks to regulate the peak demand when tariffs are more expensive. In the absence of economic incentive policies to support this kind of renewable energy generation associated with battery energy storage systems, there is a lower probability of economic viability, especially for micro-plants up to 10 kW of installed power.