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Optimizing the bidding strategy and assessing profitability of over-install renewable plants equipped with battery energy storage systems

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  • Tziovani, Lysandros
  • Hadjidemetriou, Lenos
  • Timotheou, Stelios

Abstract

The over-installation of renewable energy sources (RES) can enhance the profits of RES producers by increasing the total exporting energy; however, RES power curtailments must be applied under over-production of RES plants to ensure their contracted maximum export capacity limits. Battery energy storage systems (BESSs) can be used to reduce the RES curtailments and therefore enhance the profits of producers. This work develops a bidding strategy as a scenario-based stochastic optimization scheme to maximize the expected profits of producers in electricity markets considering battery degradation and maximum export capacity constraints. Using the proposed scheme, a financial analysis is performed to assess the profitability for over-installing hybrid RES plants by calculating the net present value and internal rate of return of the project under different BESS costs. Simulation results, using real data from a wind and photovoltaic plant, demonstrate the effectiveness of the proposed stochastic scheme in enhancing the profit of producers compared to the corresponding deterministic scheme. The performed financial analysis, using the net present value metric, indicates that a maximum over-installation of 150%–170% and 160%–180% for the wind and photovoltaic plant, respectively, is profitable, while the usage of a BESS is profitable when its cost is under 200,000 €/MWh.

Suggested Citation

  • Tziovani, Lysandros & Hadjidemetriou, Lenos & Timotheou, Stelios, 2024. "Optimizing the bidding strategy and assessing profitability of over-install renewable plants equipped with battery energy storage systems," Renewable Energy, Elsevier, vol. 234(C).
    • Handle: RePEc:eee:renene:v:234:y:2024:i:c:s0960148124013156
    DOI: 10.1016/j.renene.2024.121247
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    References listed on IDEAS

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