Co-location of solar and storage systems enhances efficiency in several key ways:
Improving Energy Efficiency and Resource Utilization
- Reduced Energy Wastage: Co-locating solar PV with battery energy storage systems (BESS) allows for the storage of excess energy generated during peak sun hours. This excess energy, often referred to as “clipped energy,” can be utilized during periods of low sunlight or at night, reducing energy wastage.
- Optimized Resource Use: By storing energy when it’s generated and releasing it when needed, co-location maximizes resource utilization. This approach bridges the gap between solar energy production and peak demand periods, optimizing resource use.
Enhancing Economic Efficiency
- Increased Revenue Streams: Co-located systems can participate in both contracted and merchant market revenue streams. They can offer firm capacity, time-shifted delivery, and ancillary services, enhancing economic viability.
- Capital and Operational Cost Savings: Sharing infrastructure, land, and grid connections reduces both capital and operational costs. This shared setup allows for more efficient use of connected grid capacity, lowering overall project costs.
- Price Arbitrage Opportunities: Co-located systems can buy energy during off-peak hours at lower prices and sell it during peak hours at higher prices, maximizing profit margins through price arbitrage.
Grid Integration and Stability
- Grid Services: Co-location facilitates the provision of grid services such as frequency regulation and demand response. This helps stabilize the grid, especially during periods of high renewable penetration.
- Reduced Curtailment: By storing excess energy that cannot be exported due to grid constraints, co-location reduces curtailment and maximizes revenue from available grid capacity.
- Increased Grid Capacity Utilization: Co-located systems can utilize unused grid capacity for additional revenue streams, enhancing overall grid efficiency.
Overall, co-location improves both the economic and technical efficiency of solar and storage systems by optimizing energy use, reducing costs, and enhancing grid integration.
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