What is the best way for a smart battery to pay for itself the fastest and generate revenue the most efficiently

  • 2023-07-14
  • Robertas Janickas

Inion Software scientists have researched different BESS (Battery Energy Storage System) operating scenarios, in order to successfully understand how changing the modelling parameters will change the additional income and payback provided by the system.

Data was collected throughout 2022 to be used in the research. The data consisted of the Nord Pool hourly rate for Lithuania, 10kW of solar plant generated electricity and the hourly electricity consumption of a residential home in the Vilnius region of Lithuania.

Our collected data showed that in Lithuania, the generation of solar power in winter is about 20 times lower than in summer. During the winter period, a solar plant usually operates at a loss. The amount of electricity produced during those 4 months of the year is very small. Specifically, the amount of electricity produced in the winter season is 486.51 kWh, in spring is 4207.81 kWh, in summer is 4479.38 kWh, and in autumn is 1762.44 kWh. Therefore, the total annual amount of electricity produced is 10,936.14 kWh.

Furthermore, the electricity consumption in winter is up to 3 times greater than in summer. Such a consumption rate is governed by the habits of the consumer. During the cold season, the electric heating is usually on and the daylight hours are shorter, as a result of which people stay at home more, while light sources and other electrical devices are used. The amount of electricity used in the winter is equal to 4850.28 kWh, in spring is 2867.12 kWh, in summer is 1988.97, and in autumn is 2747.68 kWh. Therefore, the total annual consumption of electric energy is equal to 12,454.05 kWh.

In what cases does the revenue grow, and when does it fall?

The energy storage system researched by Inion Software was installed together with the solar plant. We investigated various scenarios and compared the influence of the solar power plant on the revenue and profitability provided by the BESS system, depending on the sales price of electricity.

We used algorithms developed by the Inion Software scientists, which help us to accurately predict the generation of electricity by a 10 kW solar plant 24-hours ahead of time. The BESS had a 5 kWh energy Li-ion battery installed. The price of this battery in the current market is about 550 euros per 1kWh for conventional users; thus, the total price of the battery is 2750 euros. These types of batteries usually last for about 6,000 charge cycles. In order not to damage? the battery, it must be discharged to no more than 10% and charged to no more than 90%, so only 80% of the battery capacity was available for use.

After extended testing, the Inion Software scientists reached the following conclusions:

·      In every PV+BESS system, the revenue increases until the optimal battery capacity is reached. Then, as the battery capacity continues increasing, the revenue goes down until the BESS becomes unprofitable.

·      The additional income provided by the PV+BESS system increases rapidly as electricity becomes more expensive. Thus, if the purchase price of electricity in Lithuania increased by 200% in 2022, the additional income provided by the BESS system would increase by as much as 512%. Since the electricity purchase prices are tending to become more expensive every year, it can be concluded that PV+BESS systems will be even more relevant in the future.

·      With the same electricity sale and purchase prices, the solar power plant does not provide additional benefits to the payback and additional income generated by the BESS system.

·      Sales of electricity generated by the solar power plant to the grid reduces the additional income and payback provided by the BESS system.

·      The additional income and payback provided by the BESS system decreases as the cost of the 1 kWh storage cycle increases. It is therefore optimal to set the price of the 1 kWh storage cycle equal to 0 in the optimiser, because it is then that the battery is used most efficiently.

·      The additional income provided by the BESS system increases as electricity consumption rises, but only up to a certain limit. Once this limit is exceeded, the additional income provided begins to decrease.

About the author: 

Robertas Janickas is chief technology officer at Lithuanian business Inion Software. He has more than 10 years' experience in management, software, and soft- and hardware development. Inion Software is a company developing a one-stop solar plant monitoring platform and energy management system for battery management.