×phelas CatalystHow to right-size a co-location battery.
A repeatable method for finding the economically optimal storage size — and turning it into a design you can actually procure. Shown step by step on a Greentech PV project, sized with Catalyst by phelas.
Greentech is a renewables developer moving toward IPP. As PV-only economics tighten, Greentech is building the in-house capability to size, own and operate co-located storage — and used Catalyst to put an IRR and an NPV on the decision.
What the optimal battery adds
Central case — the right-sized storage turns an unbankable PV-only project positive.
Project IRR
+0.51 pp
Project NPV
flips positive
At the optimum
8 MW · 30% of revenue
01 · Five things to know
The right-sized battery flips the project positive.
01Storage carries the project over its hurdle rate.
In the central case, PV-only sits just below the cost of capital (IRR 7.86%, NPV −€0.16M). The right-sized battery lifts IRR to 8.37% and turns NPV positive (+€0.50M) — the difference between an unbankable and a bankable project.
02IRR peaks at 40% power / 3 hours.
Across all four scenarios the IRR-maximising power is 40% of the connection (8 MW). Duration is 3 h in the central cases and 2 h in the low-price cases — the design target of 40% / 3 h is the central-case result.
03Bigger destroys value.
Pushing storage power to 80–100% adds CapEx the extra arbitrage can't earn back — IRR drops below the PV-only baseline. The economic optimum is reached well before maximum size.
04The realisable design captures the optimum.
No transformer maps exactly to 8 MW, so the planned design is sized around a 9 MW transformer station — 9 MW / 45% / 2.79 h. Because the IRR curve is flat near its peak, it captures essentially the full value of the target. (Currently in planning.)
05Scenario matters — and is now quantified.
Storage is clearly value-accretive in the central case; in the deep low-price downside, arbitrage-only revenue doesn't fully earn its CapEx. The optimal size holds, but the case depends on the price environment — which is exactly why each project is run individually.
02 · Sizing as a method
As merchant exposure grows and subsidy support narrows, PV-only projects are often no longer attractive enough on their own — they sit right at, or just below, an investor's hurdle. A co-located battery converts curtailed energy and price volatility into a second income. But the value is entirely dependent on getting the size right: oversize it and the extra CapEx never earns out; undersize it and the upside is left unclaimed.
So the right size is not a rule of thumb — it is an optimisation. The five steps below are the repeatable method Greentech and phelas applied, and the rest of this page walks through each one with real project numbers.
Frame the project
Grid connection, PV profile, the sizing question.
Define scenarios
Two price time series × two PV generation profiles.
Sweep with Catalyst
Every size, every scenario — ranked by IRR and NPV.
Read the optimum
Where the return peaks: 40% power / 3 hours.
Make it realisable
Translate the target into a procurable design.
Step 1 · The Project
A PV park in Germany sharing a single 20 MW grid connection point with a co-located lithium battery. The two assets are jointly optimised: PV can feed in directly under its EEG arrangement, or charge the battery, which then dispatches into the Day-Ahead and Intraday markets. As a green-power storage system, the battery charges only from the PV park — never from the grid.
Reference (PV only) vs. co-location (PV + battery)
Generation asset
PV Park · Germany
~25.9 MWp PV on a 20 MW grid connection (feed-in limit) · EEG-supported feed-in · ~3,800 MWh/yr curtailed without storage · CapEx 470 €/kW (€12.17M)
Storage asset
Co-located lithium battery (BESS)
Swept across 5 power levels (20–100%) × 4 durations (1–4 h) · Day-Ahead + Intraday dispatch · green-power (no grid import) · 20-yr life
Step 2 · The Scenarios
Test the corridor.
A single forecast would give a single, fragile answer. Instead the project is tested across a corridor of futures — combining two market-price time series with two PV generation profiles. That yields four scenario combinations, each run over the full project horizon.
How the 84 business cases come together
Storage configurations · power × duration
| 20% | 40% | 60% | 80% | 100% | |
|---|---|---|---|---|---|
| 1h | |||||
| 2h | |||||
| 3h | |||||
| 4h |
only
no storage
■ 40% / 3 h = economic optimum
21 configurations (5 × 4 + no storage)
PV profiles
P50
median yield
P90
conservative
2 profiles
Price scenarios
Central
base path
Low
downside
2 scenarios
84
business cases
2,940 simulations
Steps 3 & 4 · Optimise with Catalyst · Where the return peaks
Rather than test one assumed size, Catalyst co-optimises the PV park and battery at quarter-hourly resolution and evaluates every storage configuration in parallel. The result is not one recommendation but a return surface, which makes the optimum — and the cost of departing from it — visible.
How IRR & NPV are formed · Working assumptions
Discount rate
8%
Inflation
2%
Horizon
30 yr
PV 30 yr · BESS 20 yr
PV CapEx
470 €/kW
PV OpEx
3.65%
Storage CapEx
148–297
€/kWh by duration
Storage OpEx
3.75%
Storage life
20 yr
retired, no replacement
Charging
PV-only
green, no grid
Markets
EEG · DA · ID
no ancillary
NPV and IRR are computed on the full 30-year project cashflow. The PV park runs the full 30 years; the battery has a 20-year life and is not replaced. No ancillary-service revenue is modelled — the case is a conservative floor.
Project IRR vs. storage power · one curve per duration
Central · P50
The planned design (◇) has a 2.79 h duration, sitting between the 2 h and 3 h curves at ~8.3% IRR in the base case — effectively on the value plateau.
Optimum · Central · P50
40% · 3 h
8 MW · IRR-maximising
- IRR (optimum)
- 8.37%
- IRR (PV-only)
- 7.86%
- NPV (optimum)
- +€0.50M
- NPV (PV-only)
- −€0.16M
- Storage CapEx
- €3.80M
Optimal storage lifts IRR by +0.51 pp and NPV by +€0.65M vs. PV-only.
IRR by configuration (%) · Central · P50
Every variant, side by side — optimum outlined in orange
| dur \ power | 20% 4 MW | 40% 8 MW | 60% 12 MW | 80% 16 MW | 100% 20 MW |
|---|---|---|---|---|---|
| 1 h | 7.66% | 7.70% | 7.78% | 7.67% | 7.47% |
| 2 h | 7.92% | 8.23% | 8.24% | 8.12% | 7.76% |
| 3 h | 8.03% | 8.37% | 8.26% | 7.92% | 7.36% |
| 4 h | 8.02% | 8.23% | 7.89% | 7.34% | 6.61% |
Colour scales with IRR. Across all four scenarios the optimum sits at 40% power; duration is 3 h in the Central cases and 2 h in the Low cases.
Cross-scenario summary
PV-only vs. optimum storage — IRR and NPV by scenario
| Scenario | Optimum | PV-only IRR | Optimum IRR | PV-only NPV | Optimum NPV |
|---|---|---|---|---|---|
| Central · P50 | 40% / 3 h | 7.86% | 8.37% | −€0.16M | +€0.50M |
| Central · P90 | 40% / 3 h | 6.83% | 7.49% | −€1.32M | −€0.67M |
| Low · P50 | 40% / 2 h | 4.26% | 4.13% | −€3.92M | −€4.64M |
| Low · P90 | 40% / 2 h | 3.24% | 3.22% | −€4.84M | −€5.56M |
Click any row to load that scenario into the chart above.
Average annual revenue by source · PV-only vs. optimum (40% / 3 h)
One stream becomes three
Adding storage diverts some PV from direct EEG feed-in into the battery, which sells into Day-Ahead and Intraday. Net revenue rises and now comes from three partly independent sources. Storage cuts curtailment from ~3,800 to ~2,000 MWh/yr (−46%). Average over scenarios and project years.
Storage share of revenue
30%
- EEG feed-in
- ~70%
- Intraday
- ~28%
- Day-Ahead
- ~2%
- Curtailment reduction
- −46%
Intraday is the battery's primary earner — that is where the surplus-PV time-shift is worth most. No ancillary-service revenue is modelled, so this is a conservative floor.
The value plateau · Central / P50
IRR is flat near the optimum — the planned design captures essentially all of the value
Step 5 · From target to plan
The simulation identified 40% / 3 h (8 MW) as the economic target. But no transformer maps exactly to 8 MW. The answer is a system designed around a 9 MW transformer station — which at the 20 MW connection equals 45%, and in turn yields a real duration of 2.79 hours.
That is a feature, not a compromise. Because the IRR curve is flat near its peak, the planned 9 MW / 45% / 2.79 h design sits on the value plateau and captures essentially the full economic value of the target. The system is currently in the planning phase.
Economic target
8 MW · 3 h
40% of the connection. Base-case IRR 8.37%, NPV +€0.50M.
Planned design
9 MW · 2.79 h
45% of the connection, framed by a 9 MW transformer and available components. In planning.
Value impact
≈ full upside
On the flat top of the IRR curve, the planned design captures essentially all of the target's value.
The method, generalised
What transfers.
Takeaway 01
Storage sizing is an optimisation, not a product.
There is no off-the-shelf "right" battery size. The IRR-maximising point depends on the grid limit, the generation profile and the available markets — it has to be computed, not assumed.
Takeaway 02
The value is in the translation, not the model.
A simulation that ends at "8 MW / 3 h" isn't a decision. The worth is converting it into a procurable design that holds the IRR — here, 9 MW on a 9 MW transformer.
Takeaway 03
Oversizing destroys IRR.
Beyond the optimum, IRR falls below the PV-only baseline: the extra CapEx earns less than the cost of capital. The economic optimum is reached well before maximum throughput.
Takeaway 04
Every project still needs its own run.
The method transfers; the numbers don't. The case depends on the price scenario — accretive in the central case, marginal in the deep downside — so each project is evaluated on its own.
Outlook
With this analysis, Greentech demonstrates competence in the development and the dimensioning of co-located storage — a capability that underpins the move toward IPP. Catalyst serves as the enabler: turning a sizing question into a defensible, project-specific IRR and NPV rather than a rule of thumb.
The natural next step is bankability: the same variant-level, scenario-tested IRR/NPV evidence that justifies the size also forms the backbone of the case a lender or investor needs — and this analysis shows the foundation is already in place.
IRR and NPV are computed on the full 30-year project cashflow from a quarter-hourly co-optimisation of the PV co-location (~25.9 MWp PV, 20 MW grid limit) across the EEG, Day-Ahead and Intraday markets (no ancillary-service revenue; green-power storage charges only from PV). NPV uses an 8% discount rate with 2% inflation. PV CapEx 470 €/kW (~€12.17M), PV OpEx 3.65% of CapEx p.a.; storage CapEx 148–297 €/kWh, storage OpEx 3.75% of CapEx p.a., 20-year battery life with no replacement. The study comprised 84 business cases (2,940 simulations). Modelled scenarios are a basis for design decisions and do not constitute investment advice. Every co-location project must be evaluated on its own parameters.
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