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Hybrid Power Plants – Opportunities and Challenges

Hybrid power plants offer opportunities that individual power plants may not be able to provide on their own. By combining different forms of energy production, synergies can be achieved, such as more stable electricity production, allowing grid connection capacity to be used more efficiently. Production flexibility and resource efficiency can also be improved by combining energy production with energy storage solutions, such as batteries. This means that production does not need to be curtailed, as surplus energy can be stored for later use. Energy storage systems also make it possible to maximize revenues through energy arbitrage, further improving the profitability of hybrid power plants. In hybrid power plants, all these technologies can also share the same grid connection point, which can significantly reduce investment costs compared to developing equivalent power plants as separate projects.

Challenges in assessing the profitability of hybrid power plants

Despite the many opportunities, hybrid power plants are considerably more complex investments than individual power plants. Their profitability depends on several technical and financial factors at the same time. These include, for example, grid connection capacity, plant sizing, investment costs and different market opportunities. Profitability is also affected by electricity market prices and the amount of weather-dependent generation.

The challenge is that many of the factors affecting profitability involve considerable uncertainty. For example, electricity market prices, developments in ancillary services markets and generation volumes are difficult to forecast reliably over the long term. This makes it challenging to assess the profitability of hybrid power plants and creates uncertainty around investment returns. Furthermore, the different factors affecting profitability are interconnected, meaning that a change in one area can have a significant impact on the profitability of the entire project. For example, adding a battery to a solar or wind power plant increases investment costs, but can also increase revenues by enabling energy storage and participation in different markets. For this reason, the factors affecting profitability cannot be considered separately. Instead, the profitability of a hybrid power plant must be assessed as a whole.

The aim of the hybrid power plant investment process is to find the most profitable investment option. However, the more technologies and market opportunities a project includes, the more investment alternatives there are to consider. This makes comparing different scenarios and finding the optimal plant configuration increasingly challenging. Assessing profitability and optimizing plant sizing therefore require a tool that looks at the investment as a whole, taking into account the technical and financial factors affecting profitability, as well as the uncertainties involved. The tool should also make it possible to compare different investment alternatives efficiently, helping to identify the most suitable option.

The topic of investment decision-making for hybrid power plants will be explored further in an upcoming blog post. The post will examine the tools developed to support investment decisions, the challenges associated with these tools, and how investment decision-making can be further improved.


This blog was written by Nelli Parikka, an Energy Specialist who joined Syncron Tech's team this autumn. In her Master's thesis, Nelli focused on investment decision-making for hybrid power plants and how it can be improved.

Nelli works on Syncron Tech's hybrid power plant projects. You can reach her at nelli.parikka@syncrontech.com.

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Hybrid Power Plants – Opportunities and Challenges

Hybrid power plants offer opportunities that individual power plants may not be able to provide on their own. By combining different forms of energy production, synergies can be achieved, such as more stable electricity production, allowing grid connection capacity to be used more efficiently. Production flexibility and resource efficiency can also be improved by combining energy production with energy storage solutions, such as batteries. This means that production does not need to be curtailed, as surplus energy can be stored for later use. Energy storage systems also make it possible to maximize revenues through energy arbitrage, further improving the profitability of hybrid power plants. In hybrid power plants, all these technologies can also share the same grid connection point, which can significantly reduce investment costs compared to developing equivalent power plants as separate projects.

PI Roadshow 2026 in Lappeenranta – November 4

Syncron Tech will participate in PI Roadshow on Wednesday, 4 November 2026, from 16:00 to 18:30 at LUT University in Lappeenranta. The event brings together companies from the forest industry and university students. Organised by Puunjalostusinsinöörit ry (Finnish Forest Products Engineers’ Association) and its member companies, the event gives students the opportunity to explore career paths in the forest industry and discover opportunities for summer jobs, internships and thesis projects. Come and meet us! We’ll be happy to tell you more about what we do and the opportunities we offer to future professionals.

  • Reading time 1 min
  • Oct 28, 2026, 9:52:44 AM

Blog Series: Battery Energy Storage Systems in Electricity Markets – Part 2

This article is the second part of a three-part blog series titled Battery Energy Storage Systems in Electricity Markets. In the first article, we explored the role of battery energy storage systems (BESS) in electricity markets. In this second part, we focus on what happens after the technical solution has been selected – in other words, how a battery energy storage system is prepared for participation in reserve markets. Participation in reserve markets starts with planning Implementing the technical solution is only the first step on the journey to electricity markets. Equally important is understanding what participation in reserve markets requires in practice. While the early stages of a project typically focus on equipment selection and control systems, preparing a BESS for market participation requires careful planning, interpretation of technical requirements and close cooperation between all stakeholders. Fingrid emphasises the importance of early project planning in its guidance – and for good reason. From the outset, it is essential to assess which reserve products the asset is suitable for and what technical requirements each product imposes. In Finland, reserve markets include FFR, FCR-D, FCR-N, aFRR and mFRR, each with its own requirements for response time, control accuracy and availability. Not every battery system is capable of participating in every reserve product without further system optimisation. The decisions made during this stage have a significant impact on the rest of the project. For example, some battery systems can provide frequency-controlled response independently (typically a C/D-type solution), while others require an external controller before they respond at all (generally referred to as B-type systems). Between these are solutions that meet some, but not all, market requirements. Understanding these differences during the planning phase helps avoid costly surprises later in the project. Market access is more than a technical challenge Technical performance alone is not enough. Communication systems and regulatory requirements must also be considered. For example, NC ER requirements do not apply to B-type facilities, which may simplify implementation. Nevertheless, reliable real-time data exchange remains a fundamental requirement for participation in reserve markets. The system must be able to communicate reliably with both Fingrid and other market participants. Once the technical implementation and market suitability have been evaluated, the project moves on to prequalification testing. This is where it becomes clear whether the system actually performs in accordance with the required specifications. The reserve provider is responsible for conducting the tests, while Fingrid reserves the right to monitor them. These tests are far more than a formality — they are a critical step in validating the system's performance under practical operating conditions. Syncron Tech has supported customers in numerous prequalification testing projects. Our role is typically to ensure that all system functionalities — from control logic to communication interfaces — meet Fingrid's technical requirements. We also assist with the preparation of project documentation, which often proves to be a much larger task than initially expected. In practice, documentation and the integration of multiple systems frequently become the most time-consuming aspects of a project unless they are addressed early and supported by the right expertise. Successful market participation depends on the whole system It is equally important to understand how responsibilities are divided between the different parties involved. Although technical implementation and testing are often carried out together with specialist partners, the customer remains responsible for several key market participant obligations. These include signing reserve market agreements and defining the real-time data exchange and market messaging required as part of the Balance Responsible Party (BRP) framework. Only after these steps have been completed can the asset participate in reserve markets. Looking ahead, the role of the aFRR market is expected to continue growing. This will place increasing demands on system control and integration, as aFRR requires continuous and highly accurate automatic control. The ability of a battery energy storage system to participate in this market cannot be taken for granted — it requires the right system architecture and a well-designed control solution. Successful market entry ultimately depends on managing the project as a whole. The technical system, control, communications, testing and market processes form a chain in which every link must function reliably. When each element is carefully designed and implemented, a battery energy storage system becomes far more than a technical investment—it becomes an active participant in electricity markets. Fingrid has outlined the main stages of participation in the reserve markets in its process description. The process progresses through the Prerequisites, Prequalification Tests, System Work and Market Agreements, and Start of Bidding phases. Further information is available on Fingrid's website: How to participate in the reserve markets.