Co-located BESS System Definition
A Co-located BESS system is understood to be a conventional renewable asset combined with an energy storage asset. Such systems offer a dual advantage: They allow for dispatching produced electricity at times of more favourable pricing (“shifting benefit”) and further leave owners the flexibility to realize arbitrage gains from opportunistic dispatch of the storage in absence of renewable production (“storage arbitrage benefit”). Besides the current level of revenue enhancement that a storage asset provides, it constitutes a hedge against future revenue deterioration on the renewable asset – captured prices tend to deteriorate with surging spot volatilities, whereas storage assets gain with higher spot volatilities.
For the purposes of our analysis, Pexapark assumes the energy storage asset is ‘AC coupled’ to the renewable energy project. ‘AC coupled’ implies the energy storage asset has its own dedicated bi-directional power conversion system (PCS) and can charge from available renewable energy production only once it has been converted to AC power. Pexapark has also assumed the project’s interconnection agreement allows for grid charging of the energy storage asset at all times of day.