An Economic Optimization for BESS Sizing in a
Hybrid PV and Wind Power Plant
Yuqing Yang∗ , Stephen Bremner∗ , Chris Menictas† , Ke Meng‡ , Zhao Yang Dong§ and Merlinde Kay∗
∗ School of Photovoltaic and Renewable Energy Engineering, UNSW Australia.
† School of Mechanical and Manufacturing Engineering, UNSW Australia.
‡ School of Electrical and Information Engineering, The University of Sydney, Australia.
§ School of Electrical Engineering and Telecommunications, UNSW Australia.
Abstract—This paper presents an analytical sizing strategy for
a Battery Energy Storage System (BESS) in a Hybrid PV and
Wind Power Plant (HPP), aiming at maximizing the operating
profits of the HPP. This goal was achieved mainly through
applying the battery to compensate for forecasting errors, i.e.,
reducing renewable energy curtailment and ancillary service
requirement under the electricity market operation rules. A novel
reformulation for the optimization problem was proposed to
convert the original nonlinear programming problem into a linear
programming problem. Two preliminary forecasting methods
were applied as comparable studies to verify the effectiveness
of installing the BESS. The numerical simulation results have
showed the detailed operating profits in each scenario with the
corresponding BESS power and energy capacity.
Index Terms—Battery Energy Storage System, Hybrid PV and
Wind Power Plant, Forecasting Errors, Operating Profits.
I. I NTRODUCTION
As the technologies of wind and PV became mature, both
wind and PV farms have been developed all over the world
[1]. At the same time, the penetration of renewable energy
has increased significantly, in which wind and PV have made
a huge contribution. It can be envisioned that wind and
PV will still be two main renewable resources for future
power systems with higher penetration [2]. In this regard, the
combination of wind and PV farms, i.e., a Hybrid PV and
Wind Power Plant (HPP), will be a new trend to increase the
renewable penetration and overcome the lower capacity factor
of individual solar/wind farms [3].
As previous studies show, solar and wind energy have a
good complementary feature [4]. This is simply because solar
energy can be produced during the daytime and wind energy is
more dominant during the night. Besides the complementary
characteristic in their generation profiles, the study of [3] also
demonstrated that synergistic gains can be achieved to help
reduce overall cost by co-locating wind and solar farms. In
this sense, constructing a hybrid PV and wind power plant
can be more profitable than individual solar/wind farms.
However, with two different types of renewable energy re-
sources in the hybrid power plant, more significant uncertainty
will occur during its operation. Under current electricity mar-
ket operation rules, for example in Australia [5], the operation
of renewable energy power plants are highly dependent on the
renewable energy forecasting accuracy. The mismatch partition
978-1-5386-4950-3/17/$31.00 ©2017 IEEE
between the predicted and actual power generation is required
to be met by ancillary services if the actual power generation
is lower than the bid or to be dumped if it is over the bid [6].
Therefore, when both solar and wind energy are integrated,
a higher accuracy level of renewable energy forecasting is
necessary for renewable energy dispatch [7].
By improving the forecasting accuracy, the penalty from
ancillary services can also be avoided. Besides implementing
different forecasting methods to improve the accuracy, an
appropriately sized Battery Energy Storage System (BESS)
can also be employed to store the energy when the predicted
renewable production is less than the actual power generation
to avoid the curtailment, and release the energy when the
predicted renewable production exceeds the actual power gen-
eration to avoid the penalty from ancillary services. Moreover,
extra profits can also be gained from charging the battery when
the electricity price is lower and discharging the battery when
the electricity price is higher. Therefore, in this paper, the
BESS size will be determined by maximizing the operating
profits, including reducing the penalty from ancillary services,
avoiding renewable energy curtailment and energy arbitrage.
There are also numerous studies that have been conducted
to solve battery sizing issues. For example, in [8], [9],
[10], battery sizes were determined based on wind energy
forecasting errors. However, only the uncertainty from wind
energy was considered. Apart from that, in [11], [12], [13],
both PV and wind energy were considered for battery size
determination, but in the context of a microgrid. Hence, in
this paper, an analytical BESS sizing strategy for a HPP was
proposed to compensate for forecasting error and improve
the operating profits at the same time. Moreover, this paper
proposes a reformulation technique to convert the original non-
linear programming problem to a linear programming problem.
Therefore, it can be solved faster and more accurately.
The organization of this paper is as follows. Section II il-
lustrates the formulation of problem and Section III shows the
algorithm and computation procedure. After that, numerical
simulations and results are demonstrated in Section IV, which
is followed by the conclusion in Section V.
II. P ROBLEM I LLUSTRATION
The problem formulation can be expressed in four parts,
including the complementary nature analysis of solar and wind
 TABLE I: The Proportion of the Three Scenarios
Scenario WCS(%) SCW(%) WSS(%)
Proportion 20.63% 14.30% 34.93%
resources, modeling of the hybrid power plant, forecasting
techniques and optimization problem formulation.
A. Complementary Feature of Solar and Wind Resources
In this study, Global Horizontal Irradiance (GHI) and wind
speed (10-meter height) data in Goulburn, Australia, from
2001 to 2011 were used to investigate the complementary
characteristics of solar and wind resources. The approach from
[4] has been adopted to evaluate the following scenarios for
solar and wind resources:
• Wind complements solar (WCS)
• Solar complements wind (SCW)
• Wind and solar synergy (WSS)
Based on the approach from [4], the number of hours in
each scenario over 10 years can be calculated. The proportion
of each scenario is shown in Table I.
From the table above, it can be observed that there is quite a
high possibility that solar and wind resources can complement
each other in this location.
B. PV, Wind and Battery Modeling
The PV and wind modeling procedure is simplified by
using HOMER [14], a software for hybrid renewable energy
systems design developed by the National Renewable Energy
Laboratory (NREL). Therefore, GHI, wind speed and air
temperature data are required to be fed into HOMER. Besides
that, a numerical model [15] is adopted for battery modeling.
c
PBESS,k ηBESS ∆t
SOCk+1 = SOCk + rated
(1)
EBESS
PBESS,k ∆t
SOCk+1 = SOCk + d rated
(2)
ηBESS EBESS
Where PBESS,k denotes the charging/discharging power of
the BESS at time k. SOCk+1 indicates the State of Charge
(SOC) of the BESS at time k. Note that positive values
of PBESS indicate that the battery is absorbing energy and
negative values represent the battery releasing energy. More-
c
over, ηBESS d
and ηBESS denote the charging and discharging
efficiencies of the BESS, respectively. ∆t denotes the time
interval.
C. Forecasting Techniques
The two forecasting techniques used in this study are
perfect forecasting [16] and persistence forecasting. Perfect
forecasting is not a real forecast, but it can show us the
highest potential this system can achieve. Therefore, perfect
forecasting represents the ideal scenario of zero forecasting
error. This means that the forecasted power production is the
same as the actual power generation.
On the other hand, persistence forecasting assumes that the
next day's weather conditions are the same as the day before.
It is obvious that persistence forecasting can be accurate only
when weather routines are stable. Hence, persistence forecast-
ing is usually used as a benchmark for different advanced
forecasting methods. Here, persistence forecasting can be used
to demonstrate the results for a case where a less accurate
forecasting technique is adopted.
By applying perfect and persistence forecasting, the effec-
tiveness of using the BESS can be predicted to be between
these two extreme forecasting techniques.
D. Problem Formulation
According to the rules of the Australian Energy Market
Operator (AEMO), hybrid power plants can be registered as
semi-scheduled power plants. When AEMO sets its dispatch
interval flag as “TRUE”, the HPP will be dispatched the same
as scheduled power plants. In this study of operating the HPP,
it is assumed that AEMO always sets the dispatch flag of this
HPP as “TRUE”, which means the HPP is allowed to modify
the amount of generation up to five minutes prior to each
dispatch period. To simplify the process in this study, it is
assumed that the bids from the HPP are always accepted by
the national electricity market and in this study, the wholesale
spot prices of New South Wales captured from Nemsight [17]
are used as the bid prices.
In this study, the BESS was optimally dispatched to achieve
multiple goals for the HPP operation, including reducing the
dumped renewable energy, avoiding the penalty from ancillary
services and promoting the extra profits from energy arbitrage.
Therefore, maximizing the operation profits has been adopted
as the objective function to achieve the multiple operation
goals at the same time. The objective function of this problem
can be formulated as,
GHP P = EPT (PHPP − PBESS )∆t
− AST max(FHPP − PHPP + PBESS , 0)∆t
(3)
− CO&M,P V PP V,c − CO&M,wind Pwind,c
− CO&M,BESS · max(|PBESS |)
Where GHP P , PHPP , EP, AS, FHPP , PHPP , PP V,c ,
Pwind,c , PBESS indicate the net operating gain of HPP, the
actual power generation of the HPP, the electricity price, the
power of ancillary service, the ancillary service price, the
forecasted power of the HPP, the actual power generation of
the HPP, the power capacity of PV arrays, the power capacity
of wind turbines, the instant power of the battery, where
positive values represent the battery is charging while negative
values suggest the battery is discharging, respectively.
Note that |PBESS | denotes the absolute values of each entry,
rather than the norm of the vector and the bold variables are
all N × 1 vectors. In addition, CO&M,P V , CO&M,wind and
CO&M,BESS denote the operation and maintenance cost of
PV, wind turbines and BESS per interval. I indicates a N × 1
vector that is all ”1”s.
Furthermore, PHPP , PAS and PDump can be expressed
as,
PHPP = PPV + Pwind (4)
 PAS = max(FHPP − PHPP , 0) (5)
PDump = max(PHPP − FHPP , 0) (6)
Where PPV and Pwind are the instant power generation
from PV and wind in the HPP.
Apart from the objective function, the decision variables of
PBESS were also limited by the power capacity of the BESS.
Thus, the constraint of the BESS's charging and discharging
boundaries can be expressed in (7),
−PBESS,max ≤ −PBESS,k ≤ PBESS,max (7)
Where PBESS,max indicates the maximum charging bound-
ary of the BESS. Meanwhile, the same magnitude was adopted
as the discharging boundary. PBESS,k denotes the k th entry
in PBESS , and similar rules apply to other N × 1 vectors.
Next, the constraint of the HPP operation boundaries was
also considered, thereby limiting the decision variable of
PBESS,k .
0 ≤ PHP P,k − PBESS,k ≤ PHP P,max (8)
Another important constraint is the SOC of the BESS. The
relationship between SOCk and PBESS,k follows (1-2). To
avoid severe degradation when the battery is operated in high
Depth of Discharge (DOD), 20% of SOC is adopted as the
lower boundary.
20% ≤ SOCk ≤ 100% (9)
The objective function and constraints above were
formulated in a standard form using the matrices below,
where PBESS is the decision variable.
Maximize GHP P
subject to, (7-8)
20%EBESS,max I ≤ EBESS,0 I + A · PBESS ∆t
(10)
≤ EBESS,max I
It can also be noticed that the constraint (10) reflects (9).
In (10), we ignored the charging and discharging efficien-
cies, which was corrected after the optimization procedure.
EBESS,0 denotes the initial energy in the BESS. The matrix
A can be expressed as,
 
1 0 0 ... 0
1 1 0 . . . 0
 
. . . . . . . . . . . . . . . .
1 1 1 ... 1
Therefore, the optimization was formulated above as a
nonlinear programming problem due to the existence of the
max operator. Here we reformulated the problem into a linear
programming problem by extending the dimension of the
decision variables. The added decision variable T is also a
N × 1 vector, which can be expressed as,
T = max(FHPP − PHPP + PBESS , 0) (11)
Besides the simplification of the charging and discharging
efficiencies, the term showing the operation and maintenance
cost with absolute value operation for PBESS is also not
included in the optimization process, but corrected after that.
Therefore, the HPP operating profits without consideration of
operation and maintenance cost is denoted by G0HP P , and
the power of the BESS without consideration of charging and
discharging efficiencies is represented as P0BESS . The problem
can be reformulated as,
Maximize G0HP P
h i
G0HP P = EPT (PHPP − P0BESS ) − AST · T ∆t (12)
subject to, (7), (8) and (10)
T≥0 (13)
T ≥ FHPP − PHPP + P0BESS (14)
Therefore, the nonlinear programming problem has been
converted into a linear programming problem through extend-
ing the dimension of decision variables.
To simplify, the results from the above optimization is
regarded as the desired BESS output, then the actual BESS
output can be corrected through (15). Similarly, the total net
operating profits can also be corrected through (16).
c/d
PBESS = ηBESS P0BESS (15)
GHP P = G0HP P − CO&M,P V PP V,c
− CO&M,wind Pwind,c
(16)
− CO&M,BESS max(|PBESS |)
From the formulation above, we can see that through opti-
mally charging/discharging the battery, the difference between
the forecasted power profile and the actual power profile can be
compensated, so that the ancillary service cost and renewable
energy curtailment can be reduced. Therefore, the operation
profits of the hybrid power plant can be improved. Besides
that, the excess battery capacity can be used to store the energy
when the market price is lower and then sell it back when
the market price is higher, in order to increase the operation
profits. Hence, by maximizing the operating profits of the HPP,
multiple goals can be achieved at the same time.
III. A LGORITHM AND C OMPUTATION
In this study, the optimal power and energy capacities of the
BESS are determined in an analytical process shown in Fig.1.
In each scenario, the power and energy capacity of the battery
will serve as the constraints during the optimization process.
The main target of dispatching the battery in this paper is to
maximize the operation profits of the HPP. The optimization
problem is a linear programming problem that can be solved
directly by the MATLAB built-in solver.
Here are the optimization procedures explained in steps
below.
Step 1: Initialization. Input the power capacities of PV and
wind turbines; input the actual PV and wind power generation;
input the forecasted PV and wind power generation; input the

Figure 1. Flow Chart of Optimization
electricity price; set time duration (1 year, i.e., 8760 hours)
and simulation interval (1 hour). Then, go to Step 2.
Step 2: Start with the initial power capacity and energy
capacity of the BESS. Then, go to Step 3.
Step 3: In the scenario where there is no battery, when
the actual power production exceeds the forecasted power
generation, the extra energy has to be curtailed. On the other
hand, when the actual power production is less than the
forecasted power generation, the hybrid power plant needs
to pay the penalties from ancillary services. In the scenarios
where there is a battery, the optimization procedure will
be performed with the given power and energy capacity of
the BESS as optimization constraints. The results from the
optimization process is the optimal charge/discharge schedule
of the battery. This optimal schedule can guarantee the HPP
achieves the highest operation profits on a daily basis. Then,
go to Step 4.
Step 4: Increase the power capacity of the BESS, and
go back to Step 3. However, if the preset maximum power
capacity is reached, go to Step 5.
Step 5: Increase the energy capacity of the BESS, and
go back to Step 3. However, if the preset maximum energy
capacity is reached, terminate the simulation procedure.
TABLE II: Numerical Simulation Results of Cases 1 & 2
Scenario Net Operating Demanded An- Dumped
Profits (Australian cillary Service Energy (MWh)
$) (MWh)
Case 1 1.3812×106 0 0
Case 2 8.5142×105 1.5460×104 1.5422×104
IV. N UMERICAL S IMULATIONS
A. Case Setting
In this paper, four cases have been set up to simulate the
operation of the HPP under different forecasting methods and
with or without BESS, in order to evaluate the impacts of using
different forecasting techniques and the impacts of installing
the BESS in the HPP.
• Case 1: HPP without BESS under perfect forecasting
• Case 2: HPP without BESS under persistence forecasting
• Case 3: HPP with BESS under perfect forecasting
• Case 4: HPP with BESS under persistence forecasting
The power capacities of PV and wind turbines in this study
were assumed as 15MW. Therefore, the power capacity of
the HPP is 30MW. With regards to the scale of the HPP,
the maximum power and energy capacities of the BESS
were assumed as 15MW and 75MWh (5 hours storage). The
simulation interval is 1 hour and the simulation duration is
1 year. The operation and maintenance costs of PV, wind
turbines and battery used here are $16, $33 [19] per year
per kW and $17 (Lead-acid battery) [20] per year per kWh.
In addition, both charging and discharging efficiencies in this
paper are adopted from [15] as 0.87 (Lead-acid battery).
B. Results
The operation results of Cases 1 and 2 without battery are
demonstrated in Table II.
From the table above, both cases were operated without
battery, it can be observed that there is a significant profit
reduction from perfect forecasting to persistence forecasting.
The difference of the profits between the two cases mainly
come from the ancillary service penalty and the dumped
energy, the profits from which is supposed to be earned rather
than to be dumped.
The results also indicate that the operating profits using
other advanced forecasting techniques are supposed to achieve
the profits between perfect and persistence forecasting. Also,
the energy deficiency that needs ancillary services and the
extra generation that needs to be dumped are apparently
not identical, which indicates a slight bias from persistence
forecasting. Moreover, the former energy amount is larger than
the latter. In other words, the persistence forecasting in this
case tends to overestimate the power production of PV and
wind energy.
Fig.2 and 3 show the net operating profits in Cases 3 and 4,
respectively. A straight-forward outcome from Fig.2 and 3 is
that the profits of the HPP grow significantly with the increase
of the BESS power and energy capacities, but at different rates.
In both cases, the increase of the HPP profits are more sensitive
 Figure 2. The Net HPP Operating Profits in Case 3
Figure 3. The Net HPP Operating Profits in Case 4
Figure 4. The Required Energy for Ancillary Services in Case
4 in a HPP. Furthermore, a reformulation was proposed to
to the BESS power capacity when its energy capacity is large
enough, in contrast to the increase of its energy capacity when
its power capacity is large. This is probably due to the setting
Figure 5. The Dumped Energy in Case 4
of 5 hours storage, resulting in a relatively large BESS energy
capacity.
The optimized HPP profits for Case 4 in Fig.3 are gener-
ally lower than the profits in Fig.2. This is because perfect
forecasting was applied in Case 3, which indicates that there
was no ancillary service needed and no dumping of renewable
energy occurred. Thus, the power and energy capacities of the
BESS are predominantly used to achieve energy arbitrage by
storing energy when the electricity price is relatively low and
then selling it back to the market when the electricity price is
high. However, in Case 3, a part of the battery's capacity has to
contribute to reducing the ancillary services and absorbing the
curtailed energy, thereby contributing less in energy arbitrage.
Fig.4 and 5 show the required energy for ancillary services
and the dumped energy in Case 4, respectively. The results
from Fig.4 and 5 show a consistent outcome of implementing
the BESS for reducing ancillary service and dumped energy.
It can be noticed that around 5 MW and 30 MWh power
and energy capacity is a good choice as a battery size for
reducing ancillary service and dumped energy. Then, any extra
battery capacity can be used to achieve higher operating profits
through energy arbitrage. For clarity, the reason that the energy
required for ancillary services and the dumped energy did not
reach zero is due to the limitation of the BESS power and
energy capacities.
V. C ONCLUSION
In this paper, an analytical process was performed to
determine the BESS size for a HPP with consideration of
two different forecasting techniques. In contrast to the sce-
narios where no BESS participates in the HPP operation,
the results have shown the effectiveness of using the battery
convert the original nonlinear programming problem into a
linear programming problem by extending the dimension of
decision variables. The simulation results have shown the
differences and trends in the operating profits of the HPP for
each combination of battery power and energy capacities. The
results can be used as critical information for decision makers
to determine the size of the BESS in a HPP. Future work will
explore more on the impacts of battery aging on the process
of its size determination.
ACKNOWLEDGMENT
This research is supported by the University International
Postgraduate Award (UIPA) scholarship funded by UNSW.
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