Sähkövaraston ja aurinkopaneelijärjestelmän teknoekonominen tarkastelu osana ekovoimalaitoksen sähköntuotantoa uudessa sähkömarkkinamallissa

This master’s thesis investigates the economic feasibility and optimal operational strategy of a lithium-ion battery energy storage system (BESS) when integrated with a combined heat and power (CHP) plant, and alternatively, with a photovoltaic (PV) system. The objective of the study is to determine the optimal battery energy capacity, market combination, and operational strategy that provides the highest economic benefit in the Finnish electricity and reserve markets. The ongoing energy transition and the growing share of variable renewable energy sources have increased the need to balance electricity generation and consumption. Therefore, the role of battery storage systems in the power system is becoming increasingly significant from both technical and economic perspectives, offering new business opportunities for market participants. This study focuses particularly on the participation of the BESS in reserve markets and on exploiting electricity price fluctuations through energy arbitrage. In addition, the impact of integrating a PV system into the hybrid arrangement is analyzed. The modeling was carried out with a 15-minute imbalance settlement period using electricity price data from 2021–2024. The optimization was performed in Microsoft Excel while considering the technical constraints of the battery such as charge and discharge power limits, state of charge (SOC) boundaries, and degradation. The investment feasibility was estimated using net present value (NPV), internal rate of return (IRR), and payback period indicators. The results indicate that the highest revenues of the battery are achieved through participation in reserve markets. Battery operation based only on arbitrage proved to be unprofitable. Also, the integration of a PV system did not bring additional economic benefits. In addition, it was observed that the battery investment was unprofitable across all examined capacity sizes, mostly because of the high initial investment costs and the costs according to battery degradation. In conclusion, the profitability of a battery investment in Finland depends primar-ily on the compensations of the reserve markets and on the volatility of electricity prices. Therefore, optimizing battery operation on multiple markets simultaneously can provide significant economic advantages. However, relying on a single application alone is insufficient to achieve investment profitability.