Integrating energy storage into renewable generation systems offers significant potential for enhancing revenue streams. This study conducts a comprehensive long-term techno-economic analysis of integrating a battery energy storage system (BESS) with an existent wind farm for wholesale energy arbitrage and wind curtailment mitigation. The study identifies the optimal battery size and the corresponding optimal scheduling operations using a computationally efficient optimization framework formulated as a mixed-integer linear programming (MILP) problem. The MILP model maximizes net profit by considering real-world operational data, including wholesale electricity prices, wind generation, and transmission system operator dispatching orders from the Italian electricity market. Additionally, a cycle-counting battery degradation model is incorporated to account for the effects of battery ageing on the system performance. The study compares the financial performance of the wind-battery system with a scenario without storage, evaluating key energy, economic, and design indicators derived from the optimization results. Sensitivity analyses are performed, considering the most relevant key performance indicators, such as battery cost, battery efficiency, and wind curtailed energy. Results indicate that the highest net present value (NPV) of 152 k€ is achieved with a 1-h BESS of 4 MW / 4 MWh, while a 2-h BESS configuration with a size of 2 MW/4 MWh yields an NPV of 142 k€. The sensitivity analysis on battery capital expenditure cost reveals that for the integration of the battery into an existing wind farm to be financially viable, the battery cost must decrease below 325 €/kWh to achieve an interest rate of return (IRR) hurdle rate of 8–9 %. This work demonstrates the profitability potential of coupling BESS with wind farms and provides actionable insights for optimizing storage configurations in competitive electricity markets. Future work will expand the analysis to include ancillary services and uncertainty modeling further to enhance the economic and operational value of BESS integration.
Techno-economic optimization of utility-scale battery storage integration with a wind farm for wholesale energy arbitrage considering wind curtailment and battery degradation / Grimaldi, Alberto; Minuto, Francesco Demetrio; Perol, Alessandro; Casagrande, Silvia; Lanzini, Andrea. - In: JOURNAL OF ENERGY STORAGE. - ISSN 2352-152X. - ELETTRONICO. - 112:(2025). [10.1016/j.est.2025.115500]
Techno-economic optimization of utility-scale battery storage integration with a wind farm for wholesale energy arbitrage considering wind curtailment and battery degradation
Grimaldi, Alberto;Minuto, Francesco Demetrio;Lanzini, Andrea
2025
Abstract
Integrating energy storage into renewable generation systems offers significant potential for enhancing revenue streams. This study conducts a comprehensive long-term techno-economic analysis of integrating a battery energy storage system (BESS) with an existent wind farm for wholesale energy arbitrage and wind curtailment mitigation. The study identifies the optimal battery size and the corresponding optimal scheduling operations using a computationally efficient optimization framework formulated as a mixed-integer linear programming (MILP) problem. The MILP model maximizes net profit by considering real-world operational data, including wholesale electricity prices, wind generation, and transmission system operator dispatching orders from the Italian electricity market. Additionally, a cycle-counting battery degradation model is incorporated to account for the effects of battery ageing on the system performance. The study compares the financial performance of the wind-battery system with a scenario without storage, evaluating key energy, economic, and design indicators derived from the optimization results. Sensitivity analyses are performed, considering the most relevant key performance indicators, such as battery cost, battery efficiency, and wind curtailed energy. Results indicate that the highest net present value (NPV) of 152 k€ is achieved with a 1-h BESS of 4 MW / 4 MWh, while a 2-h BESS configuration with a size of 2 MW/4 MWh yields an NPV of 142 k€. The sensitivity analysis on battery capital expenditure cost reveals that for the integration of the battery into an existing wind farm to be financially viable, the battery cost must decrease below 325 €/kWh to achieve an interest rate of return (IRR) hurdle rate of 8–9 %. This work demonstrates the profitability potential of coupling BESS with wind farms and provides actionable insights for optimizing storage configurations in competitive electricity markets. Future work will expand the analysis to include ancillary services and uncertainty modeling further to enhance the economic and operational value of BESS integration.Pubblicazioni consigliate
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https://hdl.handle.net/11583/2996965
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