Impact of battery cost on the economics of hybrid photovoltaic power plants

In recent years, photovoltaic (PV) technology has experienced a rapid cost reduction. This trend is expected to continue, which in many countries drives interest in utility-scale PV power plants. The main disadvantage of such plants is that they operate only when the sun is shining. The installation of PV modules together with energy storage and/or fossil fuel backup is a way to solve that issue, but consequently increases the costs. In the last few years, however, lithium-ion batteries as well have shown a promising price reduction. This paper studies the competitiveness of a hybrid power plant that combines a PV system, lithium-ion battery and gas turbine (GT) compared to conventional fossil-fuel power plants (coal and natural gas-fired) with focus on the battery cost. To fulfil the demand an auxiliary GT is used in the hybrid PV plant, but its annual generation is limited to 20% of the total output. The metric for the comparison of the different technologies is the levelized cost of energy (LCOE). The installation of the plants is showcased in Morocco, a country with excellent solar resources. Future market scenarios for 2020 and 2030 are considered. A sensitivity analysis is performed to identify the key parameters that influence LCOE. (C) 2016 The Authors. Published by Elsevier Ltd.