In the sun-drenched landscapes of Binh Phuoc province, Vietnam, a groundbreaking study is shedding new light on the economic viability of solar power plants and battery energy storage systems (BESS). Led by Loan Thi Do, a researcher from the Electric Power University in Hanoi, the study delves into the financial implications of integrating BESS with solar photovoltaic (PV) systems, offering insights that could reshape the energy sector’s approach to renewable energy integration.
The research, published in Cleaner Engineering and Technology, (which translates to Cleaner Energy and Technology) evaluates the economic performance of a solar power plant (SPP) both before and after the integration of a BESS. The findings are compelling, revealing that while solar PV systems are already economically viable, the addition of BESS can significantly impact their financial attractiveness.
Do’s study highlights that the levelized cost of electricity (LCOE) for the solar PV system in the chosen SPP is approximately 6.13 cents per kilowatt-hour (kWh), with a net present value (NPV) of 7.52 million USD. However, when a 2 MW 2 MWh BESS is integrated, the LCOE increases to 6.38 cents/kWh, and the NPV decreases to 5.5 million USD. “The integration of BESS can enhance the system’s output, especially when transmission line limitations are a concern,” Do explains. “But it’s crucial to find the right balance to maintain economic efficiency.”
The study also conducts a sensitivity analysis, examining the impact of variations in transmission line limitations (TLL), capital expenditure (CAPEX), and subsidies. It finds that the PV-BESS system becomes economically inefficient when the BESS reaches 12 MWh or larger. However, when TLL falls below 24 MW, BESS plays a significant role in improving the system’s output. “Reductions in BESS CAPEX have a negligible impact on LCOE but a significant impact on the levelized cost of storage (LCOS),” Do notes. “This suggests that while BESS can enhance system performance, their economic viability is highly sensitive to cost factors.”
The research also explores the potential of investment-based incentives (IBI) and capital-based incentives (CBI) to enhance the financial attractiveness of PV-BESS systems. It finds that IBI starting at 7% or CBI starting at 4 cents/W can significantly improve the economic outlook of these systems.
So, what does this mean for the energy sector? As renewable energy integration continues to grow, the findings of Do’s study could influence how energy companies approach BESS integration. The study underscores the importance of considering both technical and economic factors when integrating BESS with solar PV systems. It also highlights the potential of policy incentives to drive the adoption of these systems.
As the energy sector continues to evolve, studies like Do’s will play a crucial role in shaping the future of renewable energy integration. By providing a comprehensive economic analysis of solar PV and BESS integration, Do’s research offers valuable insights that could guide energy companies and policymakers in their decision-making processes. The findings could also pave the way for further research into the economic viability of other renewable energy storage systems, contributing to a more sustainable and economically viable energy future.