Optimal sizing and techno-economic analysis of a utility-scale wind-battery energy system for grid-level wholesale energy arbitrage service

The modern electricity grid is composed by an increasing percentage of renewable energy installations. Given the intrinsic unpredictable nature of these sources of power generation, it is essential to integrate battery energy storage systems (BESS) so as to ensure stability of power grids. This work proposes a techno-economic analysis of the integration of a BESS into a wind power plant, useful for performing grid-level wholesale energy arbitrage. The purpose of the analysis is to optimize the size of the battery so as to ensure the greatest possible profit from its use. To do this, a mixed integer linear programming (MILP) optimization algorithm is used. Its objective function seeks to maximize the gains achievable by performing arbitrage with energy taken from both the wind system and the grid. For optimal battery operation, the degradation that is caused by the charge and discharge cycles performed is also taken into account. The algorithm inputs are historical data related to the wind farm examined, that include wind speed, energy prices, and dispatch orders. Using this data, scenarios were created to represent different conditions under which the system might operate. The analysis was then performed going for maximum NPV by running a sensitivity on battery price, energy price and weighted average cost of capital (WACC). The results show that with favorable energy price conditions, thus with sufficiently high and variable prices, profits can be made from the implementation of these storage systems. In a business-as-usual scenario of energy prices and dispatch orders, an optimal battery size of 30MW and 60MWh was obtained with an NPV of 4.177.589 € after 15 years of battery life. This work therefore shows the possibility of being able to implement storage systems in renewable energy production facilities, leaving opportunities for more future research.