Renewable-Battery Hybrid Power Plants in Congested Electricity Markets: Implications for Plant Configuration

Examining coupled renewable-battery power plants (“hybrids”) in congested areas provides insights into a future of increased wind and solar penetration. Our study focuses on two types of congested regions, Variable Renewable Energy (VRE)-rich Areas and Load Centers, and explores likely plant configuration choices for developers and transmission network planners. This paper examines how hybrid value, comprising energy and capacity value, varies by plant configuration and congested region type considering factors such as storage duration, battery degradation, and ability to charge from the grid. We select plant locations from across the seven main U.S. independent system operators (ISOs). Hybrid value for each configuration is computed based on profit-maximizing plant operation given perfect foresight, according to observed wholesale power market real time prices from 2018-2021. In VRE-rich Areas, the median increase in energy value from extending storage duration from one to four hours is 29.4% for solar and 26.8% for wind, assuming low battery degradation costs and storage sized to 100% of the plant’s nameplate generation capacity. Increasing storage duration beyond four hours does not substantially increase its value from energy markets, even in VRE-rich Areas. We find that solar hybrids reach a 90% capacity credit with four hours of storage, while wind hybrids require eight hours of storage, based on the capacity factor of each hybrid during the top 100 net load hours.