Influence of Business Models on PV-Battery Dispatch Decisions and Market Value

Influence of Business Models on PV-Battery Dispatch Decisions and Market Value

TitleInfluence of Business Models on PV-Battery Dispatch Decisions and Market Value
Publication TypeReport
Year of Publication2021
AuthorsJoachim Seel, Cody Warner, Andrew D Mills
Date Published10/2021
Abstract

PV-battery hybrid projects dominate interconnection queues in some regions in the United States, but few projects have been operational long enough to assess how the hybrid capabilities may be used in practice. We interview plant operators and analyze empirical dispatch data for eleven large-scale PV-battery hybrids in three organized wholesale markets in the United States. We use the dispatch data and wholesale market prices to estimate the market value of our sample hybrids in 2020. The empirical increase in market value of a PV-battery hybrid relative to a standalone PV plant varies by project and ranges from $1 to $48/MWhsolar. The premium is driven by market, location, technical characteristics of the PV and battery asset, and battery dispatch strategies. In contrast to the widespread assumptions in the PV-battery hybrid modeling literature, only three of the eleven project operators optimize battery usage for wholesale market revenue as merchant plants. Instead, the majority of operators in the sample have alternate objectives. For example, load-serving entities target peak load reductions, incentive program participants focus on compliance with program requirements, and large energy consumers prioritize resiliency and utility bill minimization. Understanding prevalent dispatch signals and the degree of alignment with system-wide grid needs can increase the market value of PV-battery hybrids. 

Notes

A free webinar summarizing key findings from the research, along with highlights from the 2020 update to the Solar-to-Grid report, will be held on October 26 at 10 AM Pacific/1 PM Eastern. Register for the webinar here.