Grid connection capacity is arguably the scarcest resource in the energy transition. Transmission build out is slow and expensive and connection queues are getting longer and longer.

We might intuitively expect that a 300MW solar farm needs a 300MW grid connection, but does it? And what should you do if the capacity you want for your project isn't available? 

If you want to jump straight to the conclusion, we developed a model in Gridcog for a hypothetical project in South Australia and found that even if we cut the grid connection capacity in half, adding a BESS would increase energy exports by around 20% and energy revenues by 170% for the same sized solar farm. 

We also found that even when we added a BESS in our base case with the 300MW grid connection, there is a much smaller reduction in energy exports and energy revenue than you might expect. Read on to find out how and why.

Our Solar + BESS base case

Let's start with a hypothetical project for our baseline scenario: a 300MW solar farm with a matching 300MW grid connection. We've oversized the DC capacity to optimise shoulder period performance. 

This site is located in South Australia, a market with high solar PV penetration leading to frequent negative price intervals. In fact, prices go negative in approximately 26% of all trading intervals, requiring solar output to be curtailed during these periods to avoid economic loss.

In the baseline scenario, we only export 234,513 MWh annually to the grid. While this might seem low for a 300MW plant, it reflects the economic reality of curtailing generation during negative price periods rather than any technical limitations. 

What happens when we add a BESS? Can we increase our energy exports and revenue?

Even though the battery introduces some efficiency losses and we're only charging from solar (no grid charging for this analysis), we significantly increase our exports – reaching 310,324 MWh annually with an AC-coupled system and 312,153 MWh with a DC-coupled system (as shown below).

If the terms AC-coupled and DC-coupled are new to you, check out our blog post on modelling solar and battery hybrid projects.

The battery's ability to time-shift energy significantly enhances our project revenue by storing excess solar generation during negative price periods and releasing it during higher-priced periods, which we can see in the improved capture prices in the chart below.

Testing with reduced grid capacity

So what happens if we can't get a firm 300MW connection agreement? We tested reducing the grid connection in 50MW increments, comparing both AC and DC-coupled battery configurations, as shown in the Table and Charts below.

While we might expect that halving our export capacity will also halve our revenue, a 50% reduction in grid connection capacity (from 300MW to 150MW) only reduces annual revenue by 11% for AC-coupled and 20% for DC-coupled systems.

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There are two key factors that make this outcome possible.

Solar Generation Patterns  

Solar farms only generate at full capacity during peak sun hours, but peak generation often coincides with lower or even negative wholesale prices (average $35/MWh during peak solar periods vs. market average of $132/MWh based on our spot market data).

This means that curtailment due to reduced grid capacity during peak periods has less revenue impact than might be expected. 

Battery Optimisation  

Our AC-coupled battery can capture energy that would otherwise be lost due to grid connection constraints or negative wholesale energy prices, and our DC-coupled battery can also capture energy that would otherwise be lost through inverter clipping. 

By shifting exports to high-price periods we significantly increase our capture prices, and the battery maximises the value of grid capacity (and in the case of the DC-coupled battery, solar panel capacity).

How we built the model

We created a simple project model in Gridcog with a series of alternative scenarios that varied the grid connection capacity and whether the BESS was AC-coupled or DC-coupled, as shown in the screenshot below.

This was very quick to build in Gridcog because of the handy ‘clone’ feature.

For this modelling exercise, we exposed the project to the last 12-months of spot market prices in South Australia, and enabled perfect foresight so our BESS is arbitraging revenue opportunities optimally. 

In a Gridcog model for a real project, our BESS would probably be enabled to charge from the grid and would be enabled to offer ancillary services, like frequency control, improving project revenues further. And we would probably enable forecast uncertainty to generate more realistic battery dispatch dynamics. 

Wrap up

As grid capacity becomes increasingly scarce and costly, the ability to optimise connection size through storage integration becomes a crucial competitive advantage. 

Our analysis shows that with smart storage integration, projects can significantly reduce their grid capacity requirements while maintaining much of their revenue potential.

This approach not only improves project economics but also helps accelerate renewable energy deployment. The key is moving beyond simple rules of thumb to embrace data-driven optimisation of the project design, using simple to use project modelling software like Gridcog.

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