Levelized Cost of Storage (LCOS) of Battery Energy Storage Systems (BESS) Deployed for Photovoltaic Curtailment Mitigation

Luca Migliari, Daniele Cocco and Mario Petrollese ()
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Luca Migliari: Department of Mechanical, Chemical and Materials Engineering, University of Cagliari, 09123 Cagliari, Italy
Daniele Cocco: Department of Mechanical, Chemical and Materials Engineering, University of Cagliari, 09123 Cagliari, Italy
Mario Petrollese: Department of Mechanical, Chemical and Materials Engineering, University of Cagliari, 09123 Cagliari, Italy

Energies, 2025, vol. 18, issue 14, 1-17

Abstract: Despite the growing application of storage for curtailment mitigation, its cost-effectiveness remains uncertain. This study evaluates the Levelized Cost of Storage, which also represents an implicit threshold revenue, for Lithium-ion Battery Energy Storage Systems deployed for photovoltaic curtailment mitigation. Specifically, the LCOS is assessed—using a mathematical simulation model—for various curtailment scenarios defined by maximum levels (10–40%), hourly profiles (upper limit and proportional), and growth rates (2, 5, and 10 years) at three storage system capacities (0.33, 0.50, 0.67 h) and two European locations (Cagliari and Berlin). The results indicate that the LCOS of batteries deployed for curtailment mitigation is, on average, comparable to that of systems used for bulk energy storage applications (155–320 EUR/MWh) in Cagliari (180–410 EUR/MWh). In contrast, in Berlin, the lower and more variable photovoltaic generation results in significantly higher LCOS values (200–750 EUR/MWh). For both locations, the lowest LCOS values (180 EUR/MWh for Cagliari and 200 EUR/MWh for Berlin), obtained for very high curtailment levels (40%), are significantly above average electricity prices (108 EUR/MWh for Cagliari and 78 EUR/MWh for Berlin), suggesting that BESSs for curtailment mitigation are competitive in the day-ahead market only if their electricity is sold at a significantly higher price. This is particularly true for lower curtailment levels. Indeed, for a curtailment level of 10% reached in 5 years, the LCOS for a 0.5 h BESS capacity is approximately 255 EUR/MWh in Cagliari and 460 EUR/MWh in Berlin. The study further highlights that the curtailment scenario significantly affects the Levelized Cost of Storage, with the upper limit hourly profile being more conservative.

Keywords: Levelized Cost of Storage (LCOS); photovoltaic (PV); Battery Energy Storage System (BESS); energy storage; Variable Renewable Energy Sources (VRES); curtailment (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2025
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