The emergence of renewable-battery hybrid power plants is revolutionising how clean energy integrates into power grids, especially in congested electricity markets. A recent study published by the Energy Markets and Policy (EMP) department of the Lawrence Berkley National Laboratory and supported by the US Department of Energy’s (DOE) Office of Energy Efficiency and Renewable Energy (EERE) examined the potential of renewable energy-battery hybrid power plants in congested electricity markets. The study titled, ‘Renewable-Battery Hybrid Power Plants in Congested Electricity Markets: Implications for Plant Configuration’, shows how pairing wind and solar energy with battery storage can address transmission bottlenecks and enhance grid reliability. It zeroes in on configurations that maximise energy and capacity value in two essential grid zones: variable renewable energy (VRE)-rich areas and load centers.
By integrating renewable generation with battery storage, hybrid power plants offer transformative flexibility, redistributing power delivery from low-demand periods to times of peak usage. The study examined real-time market data from 2018–2021 across seven major US independent system operators (ISOs).
The findings of the study indicate that adding up to four hours of storage substantially boosted energy value for solar and wind power plants. Adding one hour of battery storage boosted energy value significantly—by nearly 49 per cent in load centres and a remarkable 80 per cent in VRE-rich areas. However, the advantages of extending storage duration diminished after four hours, even in the most congested regions.
Solar hybrids emerged as clear winners, attaining an impressive 90 per cent capacity credit with only four hours of storage during peak net load periods. In contrast, wind hybrids require up to eight hours of storage to deliver similar reliability. This highlights solar power’s inherent alignment with daytime demand peaks, making it a powerful tool for meeting grid needs. While wind hybrids hold value, longer storage durations are essential to maximise their impact in highly congested zones.
Battery degradation costs and grid charging capabilities have become pivotal for hybrid plant economics. Reduced degradation costs enabled more frequent battery cycling, translating into higher revenues. Meanwhile, grid charging, which allows batteries to replenish energy during non-renewable production periods, significantly enhanced hybrid value. For solar hybrids, this feature boosted energy revenues by an average of USD12 per MWh, demonstrating its immense potential for operational flexibility. Recent updates under the Inflation Reduction Act have eased restrictions on grid charging, unlocking new opportunities for maximising hybrid performance.
Capacity markets represent another key factor influencing the profitability of hybrid plants. By fine-tuning operations to contribute during peak demand, hybrids significantly increased their reliability value. Solar hybrids consistently exceeded wind hybrids in capacity value, measured in USD per MWh, with load centres offering particularly high market prices. These findings highlight the need for customised, region-specific policies to fully capitalise on the unique advantages of hybrid plants in various grid environments.
In conclusion, the study highlights renewable-battery hybrids as a pivotal solution for integrating high levels of renewable energy into constrained transmission networks. While the report provides actionable recommendations for utilities, system operators, and policymakers, it also identifies areas for further research, such as assessing costs and exploring ancillary service opportunities. With their ability to balance economic performance and environmental impact, hybrids are poised to take a central role in the clean energy transition, speeding up advancements toward a resilient and sustainable energy future.
The full report can be accessed here
