Members of our FLEXsys research team, research assistant Marin Mandić and prof. Tonći Modrić will participate at the UPEC 2026 conference, where they will present a paper related to techno-economic optimization of hybrid PV-BESS systems in day-ahead and ancillary service markets.
Marin Mandić, Tonći Modrić, Elis Sutlović
📃 Techno-Economic Optimization of Hybrid PV-BESS system in Day-Ahead and Ancillary Service Markets
📍 UPEC 2026 - August 30th – 2nd September 2026, Cagliari, Italy
Abstract:
The increasing deployment of renewable energy sources has created a growing need for flexible resources capable of supporting power system operation. Battery energy storage systems (BESS) are increasingly deployed together with photovoltaic (PV) plants to enhance system flexibility and improve project economics. Hybrid PV-BESS systems can generate revenues from multiple market streams, including electricity price arbitrage and participation in ancillary service markets. This paper investigates the optimal sizing of battery storage in hybrid PV-BESS systems considering participation in both energy markets and ancillary service markets. A techno-economic optimization model is developed to maximize the net present value (NPV) of the project while accounting for PV generation, battery operational constraints, ancillary service provision, and grid export limits. The model evaluates multiple combinations of PV and battery capacities using a grid-search approach. The results indicate that the economic value of battery storage in the analysed case study is primarily driven by ancillary service capacity payments, while revenues from energy arbitrage play a relatively minor role. The analysis further demonstrates that the optimal battery capacity is strongly influenced by the size of the ancillary service market. When the available ancillary service capacity increases, the economically optimal battery capacity increases accordingly. These findings highlight the importance of considering ancillary service market constraints when designing hybrid PV-BESS systems and provide useful insights for developers and investors evaluating storage deployment in renewable energy projects.
The increasing integration of renewable energy sources requires economically viable energy storage solutions capable of improving system flexibility and enabling participation in multiple electricity markets. This paper presents a techno-economic optimization framework for a grid-connected hybrid photovoltaic and battery energy storage system (PV-BESS) participating in both day-ahead and ancillary service markets. The proposed model evaluates different combinations of PV and battery capacities while considering PV generation profiles, battery operational constraints, and grid export limits. Electricity market revenues, ancillary service provision, investment as well as operation and maintenance costs are also considered, with the objective of maximizing the project net present value (NPV). The case study considers different grid export limit scenarios and ancillary service market capacities to assess their influence on the optimal sizing and economic performance of the hybrid PV-BESS system.