Optimization of a large scale solar installation through virtual storage : Profitability of using the refrigeration system in a grocery store as energy storage

Abstract: In order to fulfil the goals set by EU and in the Swedish energy agreement an increased share of renewable electricity production, like wind and solar power, is necessary. Due to current legislations photovoltaic (PV) installations are usually limited to the 255 kWp energy taxation rule, or to fit the consumption profile of the building. There is also an uncertainty regarding subsidies from a long-term perspective. Three main questions are examined in this report: Firstly, whether or not a larger PV installation is more beneficial compared to a smaller one regarding LCOE, payback time and IRR. Secondly, if and how a larger PV installation can be optimized using virtual storage. Thirdly, how the virtual storage solution compares to a conventional storage method with a lithium-ion battery. Throughout the project, larger installations have proven more profitable by taking advantage of cost efficiencies. By increasing the size of the installation from 120 kWp to 314 kWp for the investigated pilot project, the LCOE is reduced from 0,938 to 0,767 SEK/kWh, payback time is reduced from 17 to 12 years, and IRR is increased from 8,1 to 10,8 %. To maintain the advantage of the largest installation in the current market, it is necessary to integrate and optimize the storage so that all produced electricity is self-consumed. Some buildings have the possibility to create a virtual storage through using existing possibilities within the facility. Virtual storage is still an unexplored area but has risen in interest since focus on energy efficiency has increased. The project includes a virtual storage solution where the refrigeration system in a grocery store is paired with a water tank to provide more storage capacity. To optimize the use of the virtual storage, it is necessary to maximize the use of the available capacity. Three main applications have been identified as optimization alternatives for the project and those are: 1) storing excess electrical energy from over-production, 2) load shifting from hours with high electricity prices, 3) providing demand response for the primary regulation market (FCR-N, FCR-D). By utilizing the storage capacity, the PV investment can improve with regards to the studied economic measures. When utilizing the most profitable options, 1) and 3), for a 314 kWp PV installation the payback time is reduced from 12 to 10 years and the IRR is increased from 10,8 % to 11,73 %. Compared with a conventional lithium-ion battery (Tesla Powerwall), the virtual storage solution is competitive with respect to initial cost and environmental impact. However, for electrical aspects the battery significantly outperforms the virtual storage with an efficiency of 90 % of the battery and 54 % of the virtual storage and an energy density of 0,108 kWh/kg for the battery and 0,0035 kWh/kg for the virtual storage.