The goals of the UE are moving towards constantly growing shares of Renewable Energies into the electricity mix, to reduce CO2 emissions. All the Member States are required to take action in order to reach the objectives. This trend is followed not only in UE but also in the rest of the world, with the Renewable Energy Sources (RES) becoming more and more price competitive and allowing distributed generation. However, a large portion of the RES is nonpredictable or variable, and this implies a very important challenge for the grid that, in order to operate, needs to maintain the frequency stable, matching the demand and supply of electricity
at every moment. Most of the disadvantages related to the instability of the RES can be solved thanks to the support of Energy Storage, whose electrochemical form is gaining a part of the market under the form of Li-ion batteries. Energy storage can perform a variety of services, that range from frequency regulation, to investment deferral of peak hour generators, to arbitrage, etc. This study aims at evaluating the economic benefit that Li-ion batteries can generate when integrated into a PhotoVoltaic plant. In Spain it is currently being built the “El Bonal” solar park, the first utility-scale PV plant in the country that will sell the totality of the generated electricity in the spot market, at market prices, and not through fixed financed prices (Power Purchase Agreements) like it has been done until now. In this perspective, evaluating the possibility of performing arbitrage with Li-ion batteries seems attractive. For studying the specific case, simulation software for PV -PVsyst- was used in order to forecast the hourly electricity generation of the plant, taking into account all the technical specifics and meteorological as well as geographic data. In parallel, an optimization linear problem has been formulated and coded with Python - and the optimizer PuLP-, with the goal of maximizing the profit matching the PV generation with the hourly Day Ahead Market spot electricity prices in Spain for 2019. Different cases were simulated to retrieve the best operational behaviors of the battery and maximize the profit, given by the difference between the energy sold when market prices are high, and the energy stored when the prices are low.
The simulations showed that Li-ion technology is not mature yet for doing exclusively arbitrage in the Spanish market, as the cost of the usage and degradation of the batteries exceeds the profits generated. Profitability can be reached at present moment in different ways: change of geographical markets and aim at countries where price volatilities during the day are higher; foster incentives and regulations in support of batteries; participate with the same battery pack in other ancillary services (demand-response, capacity firming, voltage support) in order to multiply the sources of income. Another alternative is to wait for the price decrease of the batteries forecasted to happen in the upcoming years.
