Techno-economic Analysis of Battery Energy Storage Systems for Grid Congestion Management and Offshore Wind Parks

In the accelerated transition to a sustainably powered economy, offshore wind has increasingly become a strong focus in several nations as they offer vast generation potential with minimal conflict for a relatively limited land area. In Europe, Germany and Finland are among the top promoters for ex- ploiting this clean resource, both sharing the Baltic Sea region. This investigation analyses the offshore wind expansion plans in Finland and Germany’s Baltic coast, and discovers a potential location for a BESS to be installed in conjunction with existing and future generation to provide services to the grid such as Grid Congestion Management for offshore gen- eration, along with a simplified energy arbitrage algorithm, and evaluates their business potential through the construction of a Free Cash Flow model that ties together revenue and cost modelling, use-case-dependent degrada- tion modelling and an alternate iterative sizing methodology for BESS. It is discovered that the business potential of such a BESS depends signif- icantly on the energy market conditions and its price volatility, but by com- bining both an opportunistic curtailment capture algorithm with an energy arbitrage algorithm as operating regime, synergies can be achieved which strengthen the Internal Rate of Return of a 20-year project such as the pro- posed system.