Abstract
In the context of the coming sustainable energy transition, the photovoltaic (PV) technology is expected to have the major role. However, the only exploitation of buildings surfaces for the installation of PV plants is not enough to achieve the Renewable Energy Sources (RES) penetration and CO2 emissions reduction targets established worldwide [1], thus utility-scale PV plants will be required in the energy mix to boost further the photovoltaic energy production. In absence of a proper amount of storage capacity, the continuous rise of PV production means a higher risk of energy curtailment to avoid grid instability issues. From the perspective of utility-scale PV plants, this means an economic loss on the one hand and a reduced attractiveness to interested investors on the other. From the energy system's point of view, it means to invest in new grid infrastructures to accept the increasing penetration of PV production while avoiding problems of grid instability. In order to reduce these risks, it is necessary to improve the PV programmability, following two main strategies: a wide diffusion of battery energy storage systems (BESS) and enabling the flexible demand to better match load and production and, consequently, to absorb a greater amount of PV production. The first strategy, that is the common practice nowadays, increases the overall costs for the energy system, which are commonly referred to as integration costs to take into account the impacts of variable renewable energy sources (VRES) penetration on both the grid infrastructure and the existing thermoelectric power plants [2]. To avoid these additional costs are absorbed by the end users through their electricity bills, they can be proportionally associated to the PV production by including them in the PV LCOE that can be re-defined as PV system LCOE as suggested in [3]. As demonstrated in [4], this first strategy implies an increase of the PV system LCOE of around 25% with respect to the PV LCOE calculated with the common methodology [5], depending on the energy system configuration, the PV-BESS ratio, and the distance between the power plants and the demand. However, by introducing the flexibility at the consumption side, there is an opportunity to reduce these additional costs by reducing the risk of curtailment and the investment in new storage and grid lines capacities, while accelerating the path toward the decarbonization of the system. A preliminary analysis has been made by the authors in [6] to assess the economic benefits of enabling the flexible demand from the energy system perspective in terms integration costs reduction, considering the risk of curtailment and the investments for new BESS and grid transport capacities. However, these economic benefits were not evaluated from the PV production perspective to determine the potential of reducing the PV system LCOE. Therefore, the purpose of this study is to fill this gap by assessing the economic impacts of flexible demand on the final PV system LCOE, considering different scenarios of PV and flexible demand penetration towards a 100% RES based energy system. The Italian national energy system in taken as reference for this analysis, consistently with [6] that represent the starting point.