The co-location playbook: getting renewables and storage to work as one

The UK grid has a new problem: too much clean power arriving at once. Solar output bunches around midday. On a windy afternoon, wind does the same thing. When generation outpaces demand, prices go negative and assets get curtailed, and the cheapness of renewable energy starts working against the people who built it.

Co-location is the industry’s answer. Put a battery next to a generation asset, share a grid connection, and use the battery to soak up what would otherwise be wasted, then release it when the grid actually wants it. Simple idea. Hard to execute.

We’ve spent the past year working on this problem directly: writing about the commercial structures that make or break a project, the case for pairing solar with storage specifically, and the real-time data challenge that decides whether any of it actually works. This piece brings those threads together, plus a look at where co-location is heading next, including offshore wind and markets well beyond the UK.

Most of what follows uses solar-plus-storage as the example, because that’s where we have the most operational data. But the same rules apply to wind, and Arenko is now running exactly this kind of coordination on one of Europe’s largest offshore projects. More on that below.

Why bother co-locating at all

Renewables get called “intermittent” a lot, and that’s not quite the right word. Solar and wind aren’t intermittent, they’re variable. Their output moves around, but in ways you can forecast and plan for. A battery is what turns that variability into something a grid operator can actually depend on.

Put storage next to a generation asset and the economics shift. Instead of exporting power the second it’s made, the site can hold onto it and release it when prices, demand, or grid conditions make it worth more. Solar suits this particularly well: it’s more predictable than wind across a day, and its output curve lines up neatly with how batteries are built to run, charging during the cheap midday glut and discharging into the pricier morning and evening peaks.

That’s the whole pitch. Solar produces when power is abundant and cheap. Storage moves that power to when it’s scarce and valuable. Get it right, and renewable generation starts behaving like a dispatchable asset, something the grid can call on rather than something it has to work around.

Getting it right is the hard part.

How to do co-location wrong

Most of the problems we’ve seen come from treating co-located assets as two separate businesses that happen to share a fence line.

It usually happens gradually. A wind or solar site gets built first, locked into a long-term PPA or CfD. A battery gets added later, run by a different team with a different mandate: short-term trading, flexibility revenue, whatever makes the numbers work on its own terms. Nobody sits down and designs the two to work as one system, so they don’t.

The consequences show up on the grid connection itself. When export capacity is finite and shared, someone has to decide who gets it at any given moment, and if that decision is being made by two teams with different incentives, the outcome is rarely the best one for the site as a whole. In one project we looked at, the renewable asset was being curtailed to make room for battery operation so consistently that instantaneous curtailment reached between 32% and 38%. That’s not a rounding error. That’s real generation that never made it to the grid, on an asset built specifically to generate.

This is a structural problem more than a technical one. Organisations tend to build systems that mirror how their teams are organised, and when generation and storage sit in separate silos, the software and contracts end up separate too, even when the assets are bolted onto the same connection point.

How to turn co-location into a success

The fix isn’t a specific piece of hardware. It’s treating the site as one asset from day one: aligned incentives, contracts that reward whole-site performance rather than individual-asset performance, and a single team (or a genuinely integrated platform) responsible for how the whole thing runs.

Underneath that sits a data problem. Fragmented technology stacks mean forecasting, trading, and physical control often pull from different, sometimes contradictory, sources of truth. A proper “digital backbone” pulls all of that into one place, so a decision to export, store, or trade energy gets made with a complete picture of the site, not a partial one.

The results are worth the effort. At one UK solar-plus-storage site, this kind of whole-site optimisation took grid connection utilisation from 8% to 29%, with export availability sitting around 83%. That’s the same physical grid connection doing nearly four times the useful work, purely from better coordination between two assets that were already there.

The real-time reality check

Even with the commercial structure and the software sorted, one more problem remains: forecasts are always wrong.

Day-ahead forecasting works reasonably well for standalone assets. Trade a view on tomorrow’s generation, manage the small deviations as they come in, done. Co-location breaks that model. A battery sitting next to a generation asset doesn’t just need to know what was forecast yesterday. It needs to know what’s happening right now, and what’s likely to happen in the next few minutes.

A useful comparison is Formula 1. A team runs two cars with a shared strategy, but the race isn’t won on the starting grid. It’s won on the pit wall, reacting to live data and adjusting both cars in real time as conditions change. Co-located assets work the same way. The day-ahead plan sets the frame, but it’s the quality of intraday and real-time adjustment that decides whether value gets captured or lost.

This matters most around overbuild and clipping. Most solar sites are deliberately built larger than their grid connection, to squeeze more value out of the shoulder periods of morning and evening. The trade-off is that at peak generation, the site hits its export limit and the surplus gets clipped, lost for good on a standalone asset. Add a battery that can anticipate when clipping is about to happen, and that surplus gets absorbed instead, creating headroom on the connection and letting more of the site’s generation flow through rather than being wasted. Turning a structural inefficiency into captured value depends entirely on how fast and how well the systems involved talk to each other.

It’s bigger than solar

Everything above is written through a solar lens because that’s where the data is richest, but the same coordination challenge scales well beyond it, and well beyond the UK.

Arenko’s Nimbus platform has now been selected by Ørsted to optimise Iceni, a 300MW/600MWh battery being built alongside the 2.9GW Hornsea 3 offshore wind farm. Rather than build Iceni its own grid connection, it will share Hornsea 3’s onshore infrastructure, one of the first projects of its kind under the UK’s Offshore Transmission Network Review. Coordinating a battery with an offshore wind farm at that scale is a harder version of the same problem this piece has been describing: two very different assets, one shared connection, and a real need for forecasting, trading, and physical control to work as one system rather than two.

The wider picture backs this up. Australia has referred a 500MW solar-plus-storage project for federal approval. Spain’s government has allocated €360 million to co-located BESS projects paired with agriPV and floating solar. Romania has secured EBRD financing for a 342MW solar-plus-storage development. Co-location isn’t a UK experiment any more. It’s becoming the default way new renewable capacity gets built.

Conclusion: what we’ve learned

Co-location works, but only when it’s treated as one job rather than two. Across a year of watching UK renewables projects come online, the pattern is consistent: the sites getting the most value from pairing storage with generation are the ones that built aligned incentives, joined-up data, and real-time coordination from the start. The ones leaving value on the table are usually still running generation and storage as separate businesses that happen to share a grid connection.

Solar-plus-storage has been the clearest test case so far, because it’s where the most operational data exists. But the same principles are now being proven at a much larger scale, with Arenko’s Nimbus platform coordinating a 300MW/600MWh battery alongside Ørsted’s 2.9GW Hornsea 3 offshore wind farm, and similar co-located projects moving ahead in Australia, Spain, and Romania. This is no longer a UK solar niche. It’s becoming the standard way new renewable capacity gets built.

The top five takeaways:

Renewables aren’t intermittent, they’re variable, and that distinction matters. Variable output can be forecast, planned for, and made dispatchable with the right storage strategy, which is why solar-plus-storage specifically has emerged as one of the strongest combinations available today.

Fragmented commercial structures cause fragmented outcomes. When generation and storage are governed by separate contracts and separate teams, decisions about a shared grid connection get contested rather than optimised, and the costs of that fragmentation are real. One project saw instantaneous curtailment of 32-38% as a direct result.

A “digital backbone” is what turns good intentions into good performance. Bringing forecasting, trading, and physical control into a single, coherent data layer is what allows whole-site optimisation rather than two assets working against each other. At one UK site, this took grid connection utilisation from 8% to 29%.

Forecasts are always wrong, so real-time coordination is what actually captures value. Day-ahead planning sets the frame, but it’s the quality of intraday and real-time adjustment, much like a Formula 1 team working the pit wall rather than just the pre-race strategy, that determines whether clipped or curtailed generation gets captured or lost for good.

This is bigger than solar, and bigger than the UK. The same coordination challenge is now being solved at offshore wind scale, and co-located renewable-plus-storage projects are moving ahead across Australia, Spain, and Romania, suggesting this is becoming the default model for new renewable capacity globally, not an isolated UK experiment.

If you’re weighing up a co-located project, or already running one that isn’t performing the way the business case said it would, we’d be glad to talk it through.

FAQs

What does “co-location” mean in renewable energy? Co-location is when a battery energy storage system (BESS) is built alongside a renewable generation asset, such as solar or wind, and shares its grid connection. The battery absorbs surplus generation and releases it when the grid, market, or price conditions make it more valuable.

Why is solar-plus-storage co-location becoming so common? Solar generation is highly predictable across a day and its output curve aligns naturally with typical battery durations, allowing storage to charge during low-price midday periods and discharge into higher-value morning and evening peaks. This makes solar-plus-storage easier to optimise than most other combinations.

What’s the biggest mistake companies make with co-located projects? Treating generation and storage as two separate businesses rather than one integrated asset. When different teams manage each asset with different incentives and disconnected technology, the result is contested grid capacity, unnecessary curtailment, and lost value.

Can co-location work with offshore wind, not just solar? Yes. Arenko’s Nimbus platform is being used to optimise Iceni, a 300MW/600MWh battery co-located with Ørsted’s 2.9GW Hornsea 3 offshore wind farm, sharing its onshore grid connection rather than building a new one. It’s a larger-scale version of the same coordination challenge seen in solar-plus-storage projects.

Why do forecasts matter less than real-time coordination in co-located assets? Day-ahead forecasts are always imprecise, and for a standalone asset that’s manageable. For co-located assets sharing a grid connection, small deviations between forecast and actual generation have immediate knock-on effects for how the battery should behave, making real-time data and fast system integration essential to capturing value rather than losing it.