What’s driving the surge in interest in hybrid power plants?

Falling battery prices and the growth of variable renewable generation are driving a surge of interest in “hybrid” power plants that may combine utility-scale wind and/or solar generating capacity with co-located batteries. 

While most of the current interest involves pairing photovoltaic (PV) plants with batteries, other types of hybrid or co-located plants with a range of configurations have been part of the U.S. electricity mix for decades.

A new briefing from the Energy Department’s Lawrence Berkeley National Laboratory tracked and mapped both operational and proposed hybrid/co-located plants across the United States. It also examined data that was mined from power purchase agreements (PPAs). 

At the end of 2021, there were nearly 300 hybrid plants (greater than 1 MW) operating across the United States, totaling nearly 36 GW of generating capacity and 3.2 GW/8.1 GWh of energy storage. 

The briefing said that PV+storage plants were the most common, and can be found throughout much of the country, with the largest in California and the West, as well as Texas and Florida. 

It cited nearly 20 other hybrid plant configurations as well, including several different fossil hybrid categories (each dominated by the fossil component) as well as wind+storage, wind+PV, wind+PV+storage, geothermal+PV, and others.

The scope of the data summary included co-located hybrid plants that pair two or more generators and/or that pair generation with storage at a single point of interconnection, and full hybrids that feature both co-location and co-control. It excluded “virtual” hybrids that were not co-located as well as smaller (often behind-the-meter) plants with less than 1 MW of generating capacity. 

Among the operational generator+storage hybrids, the briefing said that PV+storage dominated in terms of plant number (140), storage capacity (2.2 GW/7.0 GWh), storage:generator capacity ratio (53%), and storage duration (3.2 hours). 

It said this relatively high storage ratio and duration suggest that storage is providing resource adequacy and energy arbitrage capabilities to PV+storage plants. 

In contrast, the relatively low storage ratio and short duration of wind+storage plants suggests that they are primarily targeting the ancillary services markets, for example, providing regulation and/or reserves.

The briefing said that 2021 was a “breakout year” for PV+storage hybrids in particular. It said that 67 of the 74 hybrids added in 2021 were PV+storage. By the end of 2021, more GW of battery capacity were operating in PV+storage hybrids (2.2 GW) than as standalone storage plants (1.8 GW). 

The difference was even more pronounced in energy terms: PV+storage plants hosted twice as much battery capacity as standalone storage plants (7 GWh vs. 3.5 GWh, respectively). Much of the battery capacity added in hybrid form in 2021 was a battery retrofit to a pre-existing PV plant. 

Data on plants under development from the interconnection queues of all seven ISOs/RTOs plus 35 individual utilities suggest that these hybridization trends are likely to continue, the briefing said. At the close of 2021, there were more than 670 GW of solar plants in the nation’s queues. Around 285 GW (~42%) of this capacity was proposed as a hybrid, most typically pairing PV with battery storage (PV+storage represented nearly 90% of all hybrid capacity in the queues). 

For wind, 247 GW of capacity sat in the queues, with 19 GW (~8%) proposed as a hybrid, again most-often pairing wind with storage (wind+storage represented ~4% of all hybrid capacity in the queues). Meanwhile, nearly half of all storage in the queues was estimated to be part of a hybrid plant. 

The briefing said that although many of these proposed plants will not ultimately reach commercial operations, the depth of interest in hybrid plants—especially PV+storage—is notable, particularly in certain regions. 

For example, in CAISO, 95% of all solar capacity and 42% of all wind capacity in the queues is proposed as a hybrid. It said commercial interest in California “no doubt” stems from the state’s energy policies, but is also driven by the “pronounced daily wholesale pricing patterns induced by high solar penetrations.” This penetration create arbitrage opportunities for storage “that do not yet exist in the same magnitude in most other wholesale markets.”

The report also surveyed pricing data from 67 PV+storage PPAs in 10 states totaling 8.0 GW of PV and 4.5 GW/18 GWh of batteries. It said that 23 of these 68 PPAs are from operating PV+storage plants. Another 44 plants were still under construction or in development. 

It fouhd that although PV+storage PPA prices have fallen over time, “levelized storage adders” have recently increased somewhat to roughly $5,500/MW-month. That was around $45/MWh-stored (assuming one full cycle per day), or on the order of $15/MWh-PV. 

It said some of the recent price increase could “simply reflect a trend towards higher battery:PV capacity ratios on the mainland” over time (whereas this ratio is typically pegged at 100% in Hawaii), which “will increase costs, all else being equal.” It added that the “well-publicized impact” of inflationary and supply chain pressures on battery prices is “no doubt a contributor as well.”

Read the report here.