The economic impact of location on a solar farm co-located with energy storage

Abstract

Deploying energy storage (ES), alongside renewable generation, can help to decarbonise electricity grids. A key aspect of deploying these is choosing a suitable location, which is both geographically feasible and economical. Previous studies identify locations with suitable geographies; here we focus on the economic impact of location. We explore how the maximised profits, determined using a mixed integer linear programming (MILP) optimisation model, of a solar farm co-located with ES vary in different regions around Great Britain (GB) as a case study. We perform a cost–benefit analysis from the point of view of a distribution-connected solar farm owner. Real solar generation data is used, along with a weather model, to accurately represent forecast and actual output. For solar farms without ES profits are higher in locations with greater solar irradiance. However for sites with ES we find greater profit variation, primarily due to different distribution charges. For the majority of GB, ES does not add sufficient value to offset its high upfront costs and is not worth adding to solar sites. Additionally, it is found to be uneconomical to add ES to most existing solar farms, despite many studies highlighting the grid benefits this would bring. We recommend that distribution network operator and market pricing better reflects the value which ES can bring to the electricity system economical to add to solar sites. To encourage increased co-location distribution operators should offer greater a differential between non-intermittent generation and intermittent generation payments, in particular at times of high system demand.