Energy storage and PV the merit order effect

Frederico Sanches and Henri Gouzerh proposed a method to quantify the merit order effect of solar PV combined with centralised or decentralised storage in Germany, France, Italy, Austria and Switzerland (GFIAS) for the period 2007-2015.

They calculated the savings for power purchasers generated by the decrease in electricity spot market prices observed when solar PV plants feed electricity into the grid, first without storage and also by adding de-centralized storage capability to the PV capacity and shifting the use of centralized storage (e.g. pump-hydro storage) to benefit from the merit order effect.

This study has three main findings:

» Without storage, the overall savings over the past 10 years amounts to around EUR 31 bn for the whole GFIAS region and the average wholesale prices would have been 4 % higher had there not been any PV production;

» Combining PV with decentralized storage system does not currently contribute positively on the aggregate metrics, though in 2014 and 2015 small increases in the merit order effect were observed suggesting that some optimization may be possible;

» Where the centralized storage is used in conjunction with PV, the aggregate gain increases to EUR 33 bn (with a storage capacity of 25 GW).

Those findings clearly underline the social value of the power generated by solar PV in conjunction with storage. Frederico Sanches and Henri Gouzerh presented this article at the European Photovoltaic Solar Energy Conference and Exhibition in Munich in June 2016.