Balancing profitability and market saturation risk in hybrid renewable energy systems for different customer profiles in Finland

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master_Massaon_Dishti_2025.pdf (1.63 MB)

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School of Engineering | Master's thesis
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Date

2025-11-08

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Energy Systems

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Nordic Master Programme in Innovative and Sustainable Energy Engineering

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en

Pages

84

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Abstract

The rapid transformation of Finland's electricity sector, driven by ambitious de-carbonization targets, market liberalization, and the proliferation of wind and solar, has introduced new challenges around market saturation, price volatility, and the long-term profitability of renewable investments. This thesis investigates how hybrid renewable energy systems (HRES), integrating wind, solar, and battery energy storage, can be optimized to balance profitability and market saturation risk across varying customer profiles: metal industry, data centres, and PEM electrolysers. Using a multi-objective optimization framework, the study simulates 135 different system configurations per customer type, incorporating real-world demand profiles and 15-year market data. The analysis evaluates the impact of Power Purchase Agreement (PPA) structures, battery, wind, and solar sizing, and market dynamics on Net Present Value (NPV), curtailment, and risk exposure. Results show that the economic contribution and optimal role of battery energy storage systems differ substantially between customer types. In absolute terms, the metal industry delivers the highest financial impact, even though data centres have the highest PPA price. This outcome arises from the industry's steady, predictable baseload demand and high absorption capacity, which limit oversupply and enhance hedging against market volatility and due to the highest BESS participation in fulfilling demand. 2-hour BESS with medium-sized 30-60 MW systems maximize capital efficiency and maximum profitability occurs with 100 MW wind configurations. By contrast, data centres and PEM electrolysers favour larger wind (200-300 MW) and battery (100 MW) setups. Data centres flat, high up-time demand supports high utilization of large batteries and generates the highest absolute revenues. PEM electrolysers achieve similar profitability through operational flexibility, dynamically adjusting production to exploit low-price hours and ancillary markets. Normalized results reveal that the metal industry attains peak capital efficiency with moderate system scales, while data centres and PEM electrolysers sustain efficiency as capacities increase, indicating proportional value growth without diminishing returns. Sensitivity analyses show that declining ancillary service prices and increasing renewable penetration significantly reduce storage profitability. Overall, the findings reinforce the importance of customer-specific hybrid sizing, PPA tailoring, and automation-enabled modelling to enhance profitability and resilience of hybrid renewable portfolios in Finland’s increasingly saturated energy market.

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Supervisor

Syri, Sanna

Thesis advisor

Thakur, Jagruti
Kahr, Raphael

Keywords

battery energy storage systems, hybrid systems, market saturation, power purchase agreements (PPA) strategy, multi-objective optimization, wind, customer profiles, electricity demand, energy transition, ancillary services, renewable energy systems

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https://urn.fi/URN:NBN:fi:aalto-202512169320

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