Evaluating non-firm grid connections for battery energy storage systems: A co-optimization case study of the Netherlands

The rapid growth of renewable capacity highlights the need for flexible and efficient grid connections, emphasizing the importance of energy storage systems such as batteries (BESS). So far, BESS have operated under firm grid connection agreements, ensuring uninterrupted access to the grid but resulting in high annual grid fees and potential installation delays due to required grid upgrades. To solve this, non-firm grid connection agreements have emerged, allowing faster grid integration and reducing infrastructure costs. However, these agreements pose a risk of curtailment during peak periods, which can impact the profitability of BESS. To assess this impact, a day-ahead perfect foresight co-optimization model is developed to evaluate BESS participation across multiple electricity markets – specifically, the Day-Ahead, Frequency Containment Reserve (FCR), and automatic Frequency Restoration Reserve (aFRR) markets – under both firm and non-firm grid connection policies. The Netherlands is used as a case study, focusing on a newly proposed non-firm access (NFA) policy framework that allows curtailment for up to 15 % of the year in exchange for significantly reduced grid fees. Results indicate that while the non-firm connection policy scheme yields lower gross revenues due to operational constraints, the substantial reduction in grid fees – up to 65 percent – makes it the more profitable option overall. Sensitivity analyses revealed that the choice of historical pricing data and curtailment days significantly influence the most favorable policy scheme. This study contributes a novel co-optimization modeling approach that explicitly incorporates state-of-charge management constraints optimizing BESS participation across multiple electricity markets, under both firm and non-firm grid connections. • Co-optimizing BESS operations with market constraints improves profitability modeling. • Non-firm grid access cuts annual BESS costs by avoiding fixed grid fees. • Lower grid charges outweigh lost revenue from non-firm connection curtailments. • Dynamic grid fees under non-firm contracts incentivize off-peak battery charging. • Effectiveness of non-firm contracts depends on curtailment timing and market prices.