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Combining utility scale solar and wind projects with batteries provides greater value at lower costs than either stand-alone intermittent renewable or battery projects, a new study by the Lawrence Berkeley National Laboratory finds. That is particularly true for California with the surge in renewable resources connected to its grid.

Large renewable generation paired with storage offers “a significant potential value premium in wholesale markets” using historical prices of energy and capacity services, according to the report.

In California, the total value of services provided by hybrid projects is roughly double that of their constituents. Current storage technologies can store excess electricity for about four hours. Efforts are underway to dramatically extend that duration. The study put the value at $30 MWh for stand-alone intermittent renewables compared to up to $60 MWh for combined PV-storage and wind storage projects in the Golden State.

In addition, the cost of coupled PV-storage has dropped, from $40–$70 per MWh in 2017 to $20–$30MWh in 2018 and 2019 in the U.S, excluding Hawaii.

That is driving a major expansion in signed power purchase agreements and the number of joint projects in interconnection queues.

Dominant drivers for developers are the federal Investment Tax Credit. The tax credit is available for 30% of the PV project’s cost. A developer can claim another 30% of the battery costs if they are fully charged by the on-site solar. The tax credit drops to 22.5% if the battery is charged 75% by the connected solar farm, decreasing the value of the credit.

Before the Coronavirus hit, developers were rushing to take advantage of the ITC prior to its decline from 30% to 10% by 2022. It is not clear yet what effect the economic downturn will have.

There are 4.6 GW, or a total 61 joint projects, online in the U.S. Of these, 1.5 GW are wind-battery projects, 0.7 GW are PV-storage and 1.5 GW are made up of natural gas-battery facilities.

The amount of PV-storage output is set to multiply over the next three to four years, Ryan Wiser, LBLN senior scientist, told Current March 19. Another 14.7 GW of combined projects, or 88 facilities, will come online, with 7.9 GW of that PV plus battery projects, according to Wiser.

Easy Bay Community Energy, for example, approved two contracts for utility-scale solar with storage projects in Southern California and Kern County, which are expected to come online at the end of 2022. The two contracts total 225 MW of solar and 80 MW/160 MWh of batteries. The price, according to EBCE Chief Executive Officer Nick Chaset is an “astoundingly low” average price of $22 per MWh, with a 2 percent inflation adjustment.

There also is 2.8 GW of wind-storage slated to come online in the next three to four years in the U.S., and 2.3 GW of gas-battery facilities in the works. The latter is to feed into the ancillary services market and to help reduce the wear and tear of gas plants ramping up and down.

There are 69 GW in select interconnection queues, or a total 88 combined generation-storage projects.

Of the various grid operators in the U.S., California has the highest percentage of photovoltaic and wind generators plus battery projects in its interconnection line. That includes 67% of the PV projects, at 30 GW, and half of the wind projects, at 5 GW. That is driven by problems created by excess intermittent energy flowing into the grid in the middle of the day and too little in the evenings, creating the infamous “duck curve.”

This “reinforces the popularity of the hybridization model within CAISO as compared to other ISO/RTOs,” the LBNL reports says. Next in line of the system operators with the highest number of hybrid projects in their development line is the Electric Reliability Council of Texas, with 13% of the PV generators proposing to include storage and 3% of the wind projects.

Advantages of joint renewable and storage projects include shared permitting and siting costs, and shared power electronic and general power plant equipment and interconnection agreements. One instead of two interconnection applications reduces the time consuming and challenging process. Less than a quarter in this queue are expected to be built.

Hybrid projects also can reduce transmission costs. But developers are not always able to reap the full cost savings because transmission costs are shared among users.

The study also estimates that the capital costs of joint or hybrid photovoltaic and wind-storage projects can be 8% lower than separate solar energy and storage projects.

A key drawback of the hybrid projects is the current federal tax credit’s onsite charging requirement. It reduces the ability of a hybrid plant to charge from the grid, limiting the independent operational value of the battery. Another disadvantage of joint projects is that prime locations for a big wind or solar project, differ from those of batteries. For example, while the best spot for a solar plant may be a remote desert location, the best location for a battery may be downtown Los Angeles, and close to the demand.

The LBNL study calls for additional research to better understand the combined projects’ long-term cost-reduction potential, market value, and other risks and benefits. Achieving hybrid projects’ full value depends on nascent strategies for integrating them in current and future wholesale market design paradigms, it concludes.