A Multi-Stage Framework for Developing a Virtual Power Plant (VPP) Model for Off-Site Solar Deployment: A Case Study of Bahrain

Abstract

Bahrain, like other GCC countries, has strong potential for solar energy, but the lack of available land makes it difficult to build large-scale solar farms. Another major challenge is attracting investors and encouraging private-sector involvement in renewable energy projects. To address these issues, Bahrain needs a clear and reliable business framework with transparent tariff policies that make investment more attractive, while also supporting the goals of Bahrain’s Economic Vision 2030 and its pledge to reach net-zero emissions by 2060. In this regard, rooftop-based Virtual Power Plants (VPPs) offer a practical solution, as they enable distributed generation that increases solar adoption while reducing both space and investment challenges. This paper proposes a multi-stage framework for establishing a VPP model for off-site solar deployment. The first VPP model is suggested to be in AlJuffair, Capital Governorate one of the highest population densities in Bahrain. A feasibility study was performed on three different power capacities 0.5MW, 1MW, and 1.5MW using PVsyst software and economic metrics such as Net Present Value (NPV), Discounted Payback Period (DPBP), and annual saving. The results of the feasibility study are then reflected on two VPP structuring options: Net metering and Time-of-Use Feed-in-Tariff (TOU FIT). Selecting the appropriate option was based on economic attractiveness and the sides that will benefit from adopting this pricing option: investors, regulator, and consumers. The results showed that TOU FIT with off-peak tariff is more attractive for investors with NPV between BD 140K and 543K, DPBP between about 10 to 8 years depending on the VPP size. Finally, a consumer with 20MWh can save roughly BD 41K-69K annually utilizing from the dynamic electricity prices.