Raúl Carral
Business Development, Latin America North
Expert Contributor

Hybrid Solutions: The Best of Power Generation and Storage Worlds

By Raúl Carral | Thu, 11/25/2021 - 09:02

In recent years, power generation and storage solutions have been undergoing dramatic changes involving higher technological capabilities and radically lower prices. There is an ongoing debate on how investors and developers can make the best out of these changes, resulting in some of the most promising solutions available.

Some might think that developing a project based on a single technological solution could provide the required focus and business case to make it more attractive. However, new ways to successfully combine some of these solutions can make the project even more successful by bringing their best-combined capabilities and benefits together as a sole project. Hybrid systems can generally have the disadvantage of an initial higher CAPEX but having lower operating costs, higher revenues, and better dispatchability can prove to be very valuable, providing the edge that the project needs.

As a starter, let us review some of the most attractive solutions today for new power generation and storage projects at the utility level.

In terms of recent power generation developments, the major ones are in renewable energy, primarily from wind and solar power with higher technological capabilities, lower costs and zero air emissions. As a result, the cost of energy produced by these assets has drastically reduced to a fraction of what they used to cost over the last decade. Nowadays, we can see energy prices produced from renewable power from power auctions as low as US$10-15/MWh. Also, the abatement of emissions is of great benefit.

However, the setback of renewable power is the intermittency of generation. When there is no wind or sun radiation, power generation can drop down to zero. But it is possible to plan for such intermittency and combine power generation with other assets that offer firm capacity and increase the monetization of the project. This is where Flexible Power Generation and Battery Energy Storage Systems come into the picture.

Flexible Power Generation is another exciting and relatively new solution. It consists of power plants that can generate power from 0 percent to 100 percent power in just 2-5 minutes. Furthermore, these power plants can start and stop several times per day as needed and efficiently generate partial power loads. Today, Flexible Power Generation is based on reciprocating internal combustion engines. These engines have had a strong technology development over the past few years. As a result, efficiency has increased to close to 50 percent. In addition, these engines can use sustainable fuels instead of  traditional fossil fuels. Sustainable fuels can be produced using a Power-to-Gas (PtG) process, which uses surplus solar and wind energy to produce renewable fuels such as hydrogen, methanol, ammonia and synthetic methane. These technology developments have increased interest and the number of projects using reciprocating internal combustion engines in recent years.

In addition, Battery Energy Storage Systems can provide for higher reliability and power arbitrage.These systems also have become more affordable in the last few years, making them more attractive.

A combination of renewable power with Flexible Power and Battery Energy Storage Systems can bring innovative possibilities for power projects in new creative ways, based on combinations that include:    

  • Renewables and Battery Energy Storage Systems – this combination can produce new energy arbitrage business models, as an example. This is a way to cope with excess production of renewable power or production of renewable power that otherwise would produce less revenue due to low prices. The stored energy can be distributed when energy demand is higher which also drives up energy prices.                 
  • Renewables, Flexible Power, and Battery Energy Storage Systems – this combination can yield firm power, higher efficiency and increased reliability. Altogether these assets produce affordable electricity with high availability and reliability. Individual engines can operate at higher loads and, therefore, at higher efficiency. This is of great value for industrial facilities operating in island mode or even having isolated power grids or micro-grids that are also highly reliable.
  • Renewables and Flexible Power – this combination can result in higher availability of power, higher efficiency and lower costs. Flexible Power can generate electricity at times when r     enewables are not producing power, firming up power. Also, there could be a small portion of renewables such as solar power to energize auxiliary loads in the thermal power plant, like with the cooling system. Normally when there is more solar energy, there is also more heat, and the radiators would need more power to cool down the thermal power plant. This results in additional efficiency of the thermal power plant, providing greater dispatchability and lower costs while producing higher revenues.

As seen in the examples above, there are interesting ways to combine exciting technologies. If you are developing a new project or considering upgrading an existing one, hybrid solutions, a wise and innovative option.

Photo by:   Raúl Carral