Growing Pain #4: Effective integration – Managing grid and storage requirements

As solar projects grow in size and number, the challenges of integrating them successfully into national grids increase. The intermittency of solar electricity requires specific management and, solar operators who under or over-produce, face curtailment and penalties from grid operators.

Markets such as Vietnam and Australia have rapidly built out solar capacity in recent years, with Australia seeking to become a clean energy superpower due to its abundant land and solar resource. Large-scale solar plants, hybrid projects and ‘megaprojects’ could deliver gigawatts of clean energy. To unlock this potential, grid operators and solar owners need to work together to effectively integrate new capacity.

Predicting project outputs using sub-par data is increasingly challenging, as covered in our previous instalment of Growing Pains around on-site measurements. Widespread investment to raise data standards can unblock bottlenecks in the industry’s growth and help the solar sector tackle grid integration proactively.

Integrating significant solar capacity into national grids requires highly granular and reliable solar resource and power simulation data. These are also critical for successful large-scale solar project design, a topic we analysed in our first instalment of Growing Pains on project design.

In this article, we look to outline the risks to solar assets from grid constraints, including technical and financial, and we explore how high-resolution resource data can be used to mitigate these challenges and unlock the next wave of large-scale solar plus storage projects.

What are the technical and financial risks to solar asset owners due to grid constraints?

Grid constraints for developers and large-scale solar asset owners can be observed in markets such as Australia, Vietnam and Chile. They arise when intermittent energy supply from renewable energy struggles to align with regional or national energy demand, potentially causing disruptions. This can be exacerbated by a lack of transmission capacity or connectivity. The problem is often caused by over or under-supply of solar resource at specific times.

Grid integration presents a particular challenge for large-scale solar PV as larger projects are more technically demanding and expose asset owners to greater financial risks. By using high quality and high detail solar and weather data in the development phase, developers can optimise PV design and their financial strategy. The objective is to deliver PV power closer to high demand, high price patterns and ensure better cohesion between large-scale solar and electrical grids.

What are the technical risks?

The technical risks from failing to smoothly integrate a large-scale solar project primarily stem from the need to curtail assets due to over-production, causing clipping and increasing maintenance costs.

Additional technical challenges include:

• Meeting local grid requirements, especially in terms of frequency regulations
• Adapting the power generation to the demand profiles through specific PV module designs and storage
• Responding rapidly to regulatory requirements – some utilities may have strict conditions and issue penalties when generators do not meet variability limits

Solargis recommends the following key steps during project design:

• Use sub-hourly (1 to 15-minute) time series data to optimise PV-hybrid project design and refine AC/DC ratio
• Use high-resolution, short-term nowcast and forecast data to better dispatch power to the utility with lower errors (and factor such contingencies into financial models early)
• Use historical forecasts in the project design phase, which will help adapt the storage for the expected errors of forecast
• Plan for future changes to the grid requirements, ensuring project longevity, and consider future project upgrades and developments, such as adding storage systems, entering more sophisticated spot trading markets, and participation in ancillary services – during early-stage development planning

What are the financial risks?

The financial risks to solar asset owners due to grid integration challenges fall into two main categories – direct penalties from grid operators, and long-term loss of revenue. Solargis has outlined these risks below.

1. Curtailment charges and other grid penalties

If a solar asset produces more energy than expected, it must be curtailed to ensure grid stability. This means controlling the inverters to reduce the maximum power output, which could lead to technical strains on the system and higher maintenance costs. If the asset underdelivers, the grid operator may fine the asset operator for not fulfilling their contracted production.

2. Missed revenue

In the long-term, solar asset owners who produce more energy than they can sell to the grid will miss out on significant revenue during the asset’s lifetime.

Assets that consistently fail to deliver on their projected production may attract negative media attention, impacting investor confidence. This could also damage public confidence in the industry and make projects harder to re-finance or sell.

Mitigating these financial risks requires large-scale solar asset owners to understand the production of their assets from the start. Solargis recommends that solar PV project owners and operators take the following steps:

• Ensure that highly granular, long history solar and meteorological model data are used to inform the project design
• Combine model data with high-quality ground measurements to underpin project operations
• Use realistic and validated PV energy yield values to inform revenue predictions, instead of choosing the most optimistic assessment

Managing more complex projects: Wind, solar and storage

The key to reducing the impact of grid constraints on the profitability of large-scale solar PV projects is using storage effectively. As battery technology matures and becomes more affordable, ‘solar plus storage’ projects have increased in prevalence. Mixed or hybrid projects incorporating wind turbines can also provide more consistent energy than either technology alone if site location and system design are optimised.

To design a profitable solar plus storage project requires a distinct set of data inputs, which may be lacking in existing datasets used for project simulations.

Solargis recommends that renewable energy developers use the following data inputs when designing a mixed project:

• Granular temporal data, down to at least 15-minute intervals and ideally using 1-minute stochastically generated irradiance datasets, helping to better model transient PV generation and storage operations/cycles
• Historical forecast data to manage forecast errors and mitigate their impact when designing battery dispatch models
• Wind speed, to identify occurrences of high wind, which affects the operations of PV trackers
• Environmental risk factors to identify appropriate mitigation measures for wind, solar and storage assets.

Grid management

Grid operators are increasingly looking to invest in high-quality, granular forecasting to support grid stability and the energy supply from renewables, to plan auxiliary energy production accordingly.

As grid operators connect new renewables capacity to meet ambitious growth targets, accurate production forecasting plays a critical role in smooth grid integration. It is essential to manage the challenges related to intermittency of supply, such as power congestion, grid overload and frequency oscillation.

Ultimately, investment into reliable forecasts increases the responsiveness of grid operators to resource fluctuations and improves the overall reliability of the transmission and distribution systems.

The future of renewables: Smart grids and smart data

Investment in granular solar resource data and high accuracy forecasting can transform the responsiveness of solar assets and open the door to widespread storage throughout the sector.

In the long-term, grid operators will be able to use a multitude of data sources to manage energy supply through specialised algorithms across a large spatial area to seamlessly deploy multiple decentralised power systems. Grid integration will become a marginal issue, ensuring that solar asset owners can sell clean energy unimpeded when consumers need it.

Solargis has worked with solar asset owners and grid operators to deliver increased confidence on the predicted output of solar assets to ensure smooth grid integration.

Get in touch to find out more about how Solargis can help manage the grid integration of large-scale solar projects: https://solargis.com/about-us/contact