
The grid connection process is one of the most significant challenges to co-located solar and battery energy storage system (BESS) projects, a panel of experts said.
On the second day of this year’s Solar Finance and Investment Europe conference in London, a panel chaired by Ben Fulton, senior consultant at cleantech advisory firm Apricum Group, discussed the challenges of co-locating solar and storage projects, especially those that choose to add BESS capacity to an existing solar project retrospectively.
Solar and storage co-location is a hot topic in the UK at present, as the UK’s first transmission-connected co-located solar and storage project – the 70MWp Larks Green project, situated near Bristol – was connected in November last year.
An audience poll showed that around 43% of those in attendance viewed grid interconnection and permitting as the biggest barriers to co-located projects, which the panel agreed with. Simon Wannop, director of REG Power Management, noted that once permitting had been secured, much of the difficulty of the process had been avoided.
He said: “Initially, it’s a consenting problem – getting the landowners to agree, getting the grid to agree. Once you’ve got all those bits of paper in place, planning, land rights and such, you’ve secured them, and then you can wait ten years or so until the business case is better.”
However, the nature of grid connection processes in the UK means that the options for speculatively securing grid connection permits are increasingly limited; as Wannop noted, “the problem facing the UK is that grid won’t let you sit on capacity, but that’s a separate issue”.
The big question on everyone’s mind is: with the value of batteries becoming increasingly apparent, are standalone solar projects becoming economically unviable? Anastasios Christankis, chief operating officer at Queequeg Renewables, notes that it varies significantly by market. He stated: “In the UK, standalone solar projects do make sense owing to grid constraints, but most developers elsewhere are looking at co-location to maximise value.”
Co-location and revenue streams
The main advantage of co-location is diversifying revenue streams. This is particularly key in markets where curtailment is on the rise, and Michiel Adriannse, managing director at Claritas Investments, noted that he has seen interest in retrospective co-location rise as curtailment becomes an increasing issue.
He noted: “Curtailment wipes out a large chunk of your revenue – we have parks where curtailment hit 25%, and now we’re considering locating batteries there”.
In response to a question about the value of adding BESS to a solar project where curtailment was not a problem, Christankis stated that it was often far easier to add BESS capacity sooner than later, noting: “If you don’t do it now, and you try to do it retrospectively, you face issues.”
Overall, the value of co-location over large-scale standalone projects is something that the panel agreed on, and according to Adriannse, most banks are understanding of the desire to retrospectively co-locate BESS with solar projects.
He noted: “Once you have an issue with a solar park, I find most banks are willing to work with you to solve it. Banks are quite willing to get on board with co-location, but grid-scale standalone battery projects are more complex”.