Integrating solar plants into the European power grid : What is the optimal capacity combination of PV and battery storage?

Abstract

The European Union's FIT-for-55 and RePower EU policies set forth highly ambitious targets for the deployment of variable renewables. As a result, there will be a significant increase in PV capacity in the short term up to 2030, which will require greater power system flexibility. One effective solution is the use of battery storage. Given the exponential growth in PV generation over the past years and its expected continued growth, this article examines the optimal level of battery storage required to balance this growth in a cost-efficient way. The Total System Cost indicator is used to measure efficiency in the power sector, including both investment and generation costs in the European power system. The assessment demonstrates that there is a cost-optimal capacity combination of PV and battery storage at the European level. Compared to the EU's 2030 target of 383–592 GW of solar capacity, our results show that in a range of 530–880 GW of PV combined with battery storage equivalent to 2.5–7.5% of the total intermittent capacity represents the cost optimal range in the system. The results suggest, that moving toward higher deployment of PV (above 880 GW), the total cost of the system increases sharply even with applying higher level of battery storage. The results also suggest that targeting lower PV deployment ambition is not cost optimal either. Our findings indicate that batteries can play a significant role in reducing the curtailment of solar energy and can also mitigate the strong cannibalisation effect of PV installations.