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Clean Horizon at Solar & Storage Live Paris 2025
June 12, 2025 Following our recent joint webinar “What’s the future for renewable-plus-storage in Europe compared to standalone BESS projects” with Solar Media Limited, – Michael Salomon, Amira Belazougui, Florian Didier, and Amine Benchrifa – have provided in-depth responses to the questions raised by attendees.
What happens to a BESS project when PV is added to it?
Adding PV to a BESS project will reduce the availability of the grid connection, limiting its participation on the market and decreasing its profitability. On the other hand, when the battery charges from the PV, it avoids paying grid fees, which can be very high for grid connections. But generally, the limitation on the battery’s market participation, especially in ancillary services, is the most significant.
To be clear, are we talking about a hybrid system where storage charges from both renewables and the grid (rather than being co-located)?
The batteries are capable of charging from both the PV system and the grid, while the PV can either supply power to the batteries or export it directly to the day-ahead market.
What are your CAPEX assumptions?
Our CAPEX assumptions are mentioned on Slide 15.
Standalone BESS, with 100% grid connection, means 100% of the power produced is used, right?
It means that the capacity of the battery (in MW) is equal to the grid connection capacity (in MW).
How many cycles per day?
An average of 1,5 cycles per day.
Have you considered DC-coupled or AC-coupled hybrid projects?
The coupling considered in this case is AC coupling, which is more suitable for BESS participating in ancillary services.
In your model, for the configuration of hybrid PV + BESS, can the battery buy electricity from the electricity market? Or is the battery only allowed to feed into the grid and gets charged from PV generation?
The batteries are capable of charging from both the PV system and the grid, whereas the PV can either supply power to the batteries or export it directly to the day-ahead market.
What is the CAPEX assumption for a BESS project per MW and PV project per MWp?
BESS CAPEX are €460k/MW plus €750k of fixed BOP costs below 40 MW and €445k/MW plus €4 million of fixed BOP costs from 40 to 100 MW. PV costs are 250 €/kWp.
Can it be applied to different duration hours of BESS?
Considering the current CAPEX assumptions, the results might remain accurate for other durations, such as 3h or 4h.
Some regulations stipulate the provision of energy storage with solar projects. In such cases, can energy storage still be a standalone type?
Such regulations are usually designed to incentivise storage systems to charge from renewable assets under certain conditions. Therefore, it cannot be considered a standalone system unless full grid capacity is available for the BESS and both assets are financially separated, meaning the BESS can independently optimize its operation.
What is the duration of the battery considered in the model?
The duration used in the study is 2 hours.
What kind of batteries are assumed in the model? Flow batteries, Li-ion batteries…?
The batteries in consideration are Li-ion batteries.
Will there be an optimal capacity battery for a hybrid project? The additional revenue from adding battery capacity to a project will start to capture lower spreads.
Yes, once the fixed costs of the projects are covered, adding more battery capacity won’t be justified, so we will reach an optimal size. But, with the assumptions highlighted in the presentation, this optimal size would not be reached, so the larger the battery the better.
What about the difference in the security of revenues between PV + BESS and BESS?
PV systems can benefit from PPA that will secure revenues, and BESS can benefit from floors or tolling agreements with Route to Markets.
What would the results be for a case in which BESS matches 100% of the grid connection but PV is built at less than 100% of the grid connection?
We haven’t run such a simulation. Usually, the PV is oversized compared to the grid connection, but if the project can benefit from cheap grid connection costs, then the increased profitability of the BESS due to fewer limitations on the grid might improve the overall results of the project.
Have you looked at the application of energy storage to wind generation, particularly long-duration energy storage to cover extended periods of resource drought?
We do not have any example that can be shared, but are able to simulate it with our COSMOS tool.
In your simulation, when are the batteries charged?
The simulations are based on the outputs of our COSMOS simulation tool, which models the operation of storage projects—both standalone and hybrid. COSMOS optimizes battery charging and discharging decisions while enabling participation in electricity and ancillary service markets, factoring in market prices, participation rules, grid constraints and other relevant parameters. Introductory slides about COSMOS are available on pages 19 and 20.
The battery CAPEX is not turnkey, right? It seems quite low to me.
The battery CAPEX is based on suppliers’ offers that we received during recent RFPs organised by Clean Horizon. These offers reflect the current market.
Regarding profitability: it is irrespective of whether the revenues are secured or merchant, correct? Therefore, if we assume that we have a better IRR for a BESS than for a PV, wouldn’t a hybrid system always benefit from a higher BESS share?
The revenues are based on a full merchant operation, without any secured revenues. A higher BESS would bring value up to a point at which the fixed costs of the project are covered and adding BESS capacity would not be compensated by the additional revenues made on the market.
How can the BOP cost be the same for 2h and 3h? Don’t you need more land and battery for the installation?
The values that we demonstrated in the presentation are proxy values used to simplify the details of the CAPEX. The additional CAPEX required for a 3h BESS lies in the DC part (in €/MWh), but in reality the CAPEX is much more detailed, and the BOP cost is higher for 3h batteries. It’s important to keep in mind that there are always fixed costs when building a BESS project.
What battery chemistry is considered for financial performance and what is the battery replacement rate for the financial assumptions?
We consider LFP solutions, without any replacement.
What project duration did you consider? PV is financed over 25 years whereas BESS are only financed for 10 to 15 years…
We considered a 30-year duration (for the PV); the battery only operates for 15 of those years.
What PV IRR have you used? If you have used 8%, does that mean 100% BESS/grid connection in Spain would give a 19.7% IRR?
The PV IRR depends on the location of the project. In Spain, the PV IRR is very low due to high PV penetration which has greatly decreased the capture price of PV projects.
Does the hybridisation case include revenues from ancillary markets or only arbitrage revenues?
Both are included.
Could you give a breakdown of the “fixed costs”?
From a battery perspective, the fixed costs would be:
Do the hybrid cases take into consideration consumption from the grid as well as from the PV?
Yes, it can charge from the renewable asset and from the grid.
Do you have any estimates or insights on the expected profitability of BESS across different European electricity markets (€ /MWh/year), particularly in the context of increasing RES integration?
Absolutely. We provide ancillary and energy price forecasts for a dozen European countries, in which we compute the profitability of BESS projects.
Which countries can the COSMOS tool be used to simulate?
The COSMOS tool can simulate the conditions for about 30 countries. The full list of countries can be found on the website: https://www.
Is it correct that a larger battery will eventually provide diminishing returns when it comes to battery utilisation, leading to lower IRR.
Yes, if you already covered the fixed costs of your project. If not, the higher revenues you make (i.e. the larger battery), the better.
Is COSMOS mainly for development purposes? For example, can COSMOS also make revenue forecasts up to 20 years into the future to calculate IRR?
This service is another that we provide for a dozen European countries.
How does the project finance debt/equity gearing between solar+storage and standalone storage projects compare? Don’t solar+storage projects get better gearing and therefore cheaper debt, in turn improving their financial performance compared to standalone ESS?
Banks will be more eager to finance projects with secured revenues. Nowadays, BESS projects can benefit from floors and tolling agreements with Route to Markets, which help project financing. All in all, it depends on how your PV PPA compares to the guaranteed revenues of your Route to Market. In this example, everything is full merchant, the NPVs and IRRs are project NPVs and IRRs.
Are all the ancillary markets covered in those dark blue countries?
Our price forecasts in all countries include ancillary services and trading.
Can the BESS buy electricity from the grid, or is the battery only allowed to feed into the grid and charge from PV generation?
Yes, the battery can charge from the grid.
How do you model Intraday markets and how do you factor ID-revenues into COSMOS?
ID revenues are modelled by considering past available revenues for BESS and adjusted using the volatility of the Day-ahead market, which is intrinsically correlated.
In all these cases, there isn’t any fee from the grid to charge the battery, right? If not, the hybrid case would probably be much more interesting. Is it the case for all these markets?
Yes, COSMOS accounts for the grid fees. Simply put, the gains of charging from the PV and not paying the grid fees are not that important when compared to the loss of opportunities on the ancillary services due to the PV limiting battery operations.
Apart from storage capacity, how many cycles per day did you consider in your analysis?
We considered an annual average cycle limit of 1.5 cycles per day, even though the battery often struggles to reach this limit in a PV+storage project.
Is COSMOS a SaaS solution, in which users can input assumptions themselves and then calculate results based upon these inputs, or does it require Clean Horizon to calculate the results each time?
Yes, COSMOS is a SaaS solution. It is available on Clean Horizon’s platform, allowing clients to import their own inputs and run simulations for their energy projects. If you’re interested in exploring COSMOS further, feel free to contact us at sales@cleanhorizon.com to schedule a demo.
Missed the webinar or want to rewatch it? You can find the full video here.
