In this diploma thesis, we investigated the economic viability of an investment in a battery energy storage system combined with a large-scale solar power plant, whose business model is based on exploiting price volatility in the electricity market. The objective was to use an optimization model to determine the optimal size and operating strategy of the storage system and to comprehensively assess the profitability of the investment from selling electricity on the Slovenian wholesale market.
The analysis was based on a linear programming optimization model, for which we used real hourly production data and market prices from the BSP Southpool exchange for the year 2024. The model, developed in the Python environment, considered key technical and economic parameters, such as efficiency, degradation costs, and the capital investment. Through simulations, we first determined the technically and economically optimal configuration of the storage system, followed by an analysis of several scenarios that included the impact of subsidies and varying price volatility.
The analysis of the base scenario, which did not include financial incentives, showed that the investment is not economically viable, as the revenue from energy time-shifting was insufficient to cover the high initial costs. Conversely, it was clearly evident that the economic outlook improves significantly with the inclusion of a subsidy, allowing the project to meet the required profitability threshold. We can conclude that support mechanisms are currently a necessary and crucial condition for the economic viability of such investments in Slovenia.
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