Model for optimal sizing of Photovoltaic and Battery Energy Storage Systems considering an efficient scheme for contracted power capacity

This paper presents a novel optimization model for the simultaneous sizing of photovoltaic (PV) systems and Battery Energy Storage Systems (BESS) in behind-the-meter (BTM) self-consumption applications. The proposed formulation maximizes the project’s Net Present Value (NPV) from a prosumer perspective by integrating optimal battery scheduling with active energy trading strategies in the electricity market. The core contribution of the proposal is the determination of the optimal hourly contracted power capacity, providing a granular approach to managing grid connection costs. The inclusion of an adequate power demand contracting scheme has been overlooked on existing PV & BESS sizing optimization models. The performance of the model is validated against a well-known sizing approach with a case study involving a 6000 kWp PV, a 17000 kWh BESS for a 1000 kW data center in Madrid yielding a Levelized Cost of Electricity (LCOE) of 114 US $ /MWh. In contrast, the proposed model recommends a six-period power contracting scheme of [0,0,0,0,0,1] MW for a 6100 kWp (PV system) and a significantly smaller 9330 kWh (BESS), achieving an Internal Rate of Return (IRR) of 12.7% and a reduced LCOE of 77.5 US $ /MWh. We highlight that the Net Present Value of the project is significantly improved from US $ -9,135,410.60 (negative) to US $ 3,623,548 (positive) indicating, that energy/demand charges savings effectively offset both CAPEX and OPEX while generating additional profit. The inclusion of optimal power contracting schemes in the optimization model enhances the net present value by 24.6% compared to an optimized scenario that lacks strategic management of demand capacity charges.