Chapter 11. Hybrid Solutions

Introduction

Hybrid power solutions have emerged as a compelling approach for serving large electrical loads. By combining multiple generation technologies, such as solar, wind, diesel, natural gas, and energy storage with the grid, these systems can leverage the strengths of each source while mitigating their individual limitations. The result is a more resilient and optimized power supply tailored to specific operational needs and environmental conditions. The recently announced Fermi America project near Amarillo, TX is an example of this with a combination of wind, solar, natural gas, and nuclear providing 11 GW of power. [1] While the number of possible hybrid configurations is virtually infinite, this section highlights a selection of representative combinations to illustrate key trends and design principles.

The following sections contain hybrid case studies which begin by identifying the specific performance requirements of large electrical loads, followed by an analysis of how different generation technologies can be combined to meet those needs effectively. The selected combinations are tailored to the unique resource availability and cost conditions of specific U.S. locations, ensuring that each system is optimized for both technical and economic performance. Component sizes are carefully adjusted to minimize the Total Cost of Energy plus Penalties (TCOE+P) a metric that accounts for both the cost of energy production and the financial impact of power outages. This section uses TCOE+P as a consistent benchmark to evaluate and compare the effectiveness of each hybrid solution.

To evaluate the performance of each hybrid configuration, a time series simulation model was employed. This model used hourly resource, load, and market price data to capture the dynamic interactions between generation technologies, storage systems, and the grid over an entire year. It accounted for seasonal and diurnal variations in renewable output, fluctuations in load demand, and operational constraints such as ramp rates and minimum run times. At each time step, the model performed dispatch optimization, selecting the least-cost combination of available resources to meet demand while maintaining reliability targets. This process incorporated both direct energy costs and the potential financial penalties of unserved demand, ensuring that dispatch decisions were aligned with minimizing the Total Cost of Energy plus Penalties (TCOE+P). By simulating operations in chronological order, the model produced TCOE+P values that reflect realistic operating conditions rather than static averages, enabling consistent and contextually meaningful, scenario-accurate comparisons between different hybrid configurations.

Example 1: Renewables & BESS

This example evaluates renewable and battery power generation configurations designed to supply reliable, cost-effective electricity to a 500 MW data center located near Abilene, Texas. The configurations analyzed include combinations of solar photovoltaic (PV), wind energy, battery energy storage systems (BESS), and grid interconnection. Key performance indicators used in this assessment include Levelized Cost of Energy (LCOE), capital expenditures (CAPEX), and the Total Cost of Energy including penalties for unmet load.  It also assumed the ITC incentive was available for solar and the PTC incentive was available for wind.

An optimization solver settled on a hybrid system composed of 560 MW solar PV, 780 MW wind capacity, 56 MW at 4-hour BESS, and 500 MW grid integration achieved the most favorable outcomes. This scenario resulted in the lowest TCOE+P and a competitive LCOE, demonstrating strong economic and operational performance.  Because wind and solar energy have a lower cost than other generators, it is advantageous to build the largest PV and wind systems possible and sell excess energy back to the grid, the credits of which then further lower the energy cost to the associated load.  Therefore, the problem constrained the size of the interconnection to match the load so the wind and solar size would also be constrained.  This effort did not study constraints on the availability of land in the area as wind farms already existing in the area exceed 500 MW, and projects of this size are underway in the area, which demonstrates renewable energy of this size possible.

1 Deployment Schedule

The renewable and battery hybrid configuration offers the shortest projected deployment timeline among the modeled options, with an estimated buildout of 2–4 years from project initiation to commercial operation. This advantage is largely due to the modular nature of both wind and solar installations, as well as standardized battery energy storage system (BESS) components, which can be procured, shipped, and installed in parallel with site preparation. The fastest way to acquire the land would be to work with land developers in the area, who already have agreements in place with landowners in the area.

2 Operational Capability

The Abilene hybrid system leveraged a diversified generation portfolio to optimize performance and reduce operational risks. Solar and wind operated as independent resources, each contributing during different parts of the day and year. Because solar and wind are complementary in the area, 89% of the load demand was covered directly by solar and wind.  About 48% of the available renewable energy generated served the load, 46% of the available energy was sold back to the grid, and about 6% was curtailed.

The battery energy storage system (BESS) was given a minimum size that would provide back-up to the facility.  It was also allowed to play a role in mitigating intermittency, storing excess generation during periods of high output and discharging during low renewable availability. This time-shifting capability ensured a smoother and more predictable supply profile but operated for only 2% of the load demand through the year.

Grid interconnection provided the second power source, ensuring 24/7 load coverage even during extended periods of reduced renewable output, and it provided revenue for the excess renewable energy generated. This integration minimized the risk of load shedding for the 500 MW data center and allowed operators to strategically balance between renewable, storage, and grid resources to maintain optimal performance.  In this model, the grid provided only 11% of the load demand.

The hybrid configuration also supported advanced market participation strategies. By enabling energy arbitrage, surplus renewable power could be exported into the ERCOT real-time market during periods of elevated demand and pricing. This generated additional revenue streams and improved overall system economics. The combination of resource diversity, storage flexibility, and market access positioned the Abilene system for efficient, resilient, and financially robust operation.

3 System Reliability

In the Abilene case, the hybrid configuration of wind, solar, battery energy storage, and grid connection delivered the highest reliability among the modeled scenarios. Wind and solar generation profiles were naturally complementary—wind output in the region tends to be stronger during nighttime and winter months, while solar peaks during daylight hours and summer. This seasonal and diurnal diversity reduced the frequency and duration of renewable output shortfalls.

The addition of a battery energy storage system (BESS) further improved reliability by providing rapid-response capacity to handle short-term fluctuations and ramp events. This allowed renewable output to be dispatched more predictably, reducing strain on the grid and preventing abrupt shifts in power supply. The BESS also provided contingency support during sudden drops in wind or solar output, giving the grid or other generation assets time to respond. The addition of a BESS also allowed there to be no unmet load.

Grid interconnection acted as a final safeguard, ensuring uninterrupted power delivery even during extended periods of low renewable availability. While the study maintained renewable generation capacity at the 500 MW data center load, results indicated that over-sizing renewables by a modest margin could further reduce grid dependence, lower exposure to load-shedding penalties, and improve uptime metrics. By leveraging the complementary nature of multiple generation sources alongside storage and grid access, the system achieved both high availability and operational resilience.

4 Environmental Sustainability

The Abilene hybrid system substantially reduced reliance on fossil-fueled grid electricity by prioritizing local wind and solar generation. By capturing and storing renewable output in the battery energy storage system (BESS), the operation maximized zero-emissions power use even during periods when one resource under-performed. This integration lowered the carbon intensity of the data center’s electricity supply compared to a grid-only model, directly reducing greenhouse gas emissions associated with continuous high-load operation.

The presence of the BESS also minimized the need for rapid-start fossil generation from the grid during shortfalls, indirectly reducing emissions from less efficient peaking units. In addition, the system can be managed to draw any necessary grid power during periods when ERCOT’s supply is cleaner—such as times of high wind or solar output across the region—further lowering the overall carbon footprint.

The wind, solar and BESS combination consumes no water, which is a key sustainability concern for the Abilene area, which has low rainfall, no surface water, and depends entirely on non-rechargeable prehistoric ground water.

An additional sustainability benefit came from the ability to export surplus renewable energy to the ERCOT grid during high-production periods. This not only displaced fossil generation on the broader system but also supported regional decarbonization efforts. By combining high renewable penetration with storage and export capability, the Abilene hybrid model demonstrates how large-scale loads can operate with minimal environmental impact while contributing to grid-wide sustainability goals.

5 Site Feasibility

Abilene, Texas, offers an advantageous setting for the deployment of a wind, solar, and battery hybrid system. The region benefits from high solar irradiance throughout much of the year, complemented by consistent wind resources, particularly in the late afternoon, evening, and winter months. This natural alignment of resources supports steady renewable output and enhances the effectiveness of a diversified generation mix.

The more than 5,000 acres required to generate 1 GW of combined solar and wind power accounts for less than 0.5% of the Abilene Metropolitan Statistical Area’s 1.2 million-acre footprint. Wind projects typically have minimal impact on existing land uses, allowing for continued agricultural activity, while solar installations can often coexist with grazing or low-impact farming.  This minimal land impact, coupled with the region’s accelerating pace of renewable energy development, underscores the abundance of available land and the area’s strong suitability for continued clean energy expansion.

From an infrastructure standpoint, Abilene’s proximity to existing high-voltage transmission lines within the ERCOT network reduces interconnection costs and shortens development timelines. The availability of suitable land—both open tracts for solar installations and elevated areas for wind turbine placement—further minimizes siting challenges. The area’s relatively low population density also helps limit potential conflicts over visual impacts or noise.

In addition, Abilene’s location within ERCOT’s central-west zone positions the project to benefit from strong regional renewable penetration while still having ready access to grid balancing resources. This combination of resource quality, infrastructure access, and favorable siting conditions makes the location well-suited for a large-scale hybrid project serving continuous high-demand loads.

6 Evolving Policy

Federal incentives played a key role in improving the economic viability of the Abilene hybrid configuration. The 26% Investment Tax Credit (ITC) for both solar and energy storage reduced upfront capital costs, while the Production Tax Credit (PTC) for wind provided additional revenue streams during the first decade of operation. These programs lowered the project’s effective Levelized Cost of Energy (LCOE) and strengthened its competitive position relative to grid-only supply. Without these incentives, the overall project cost would rise substantially; however, the hybrid system would continue to provide operational and sustainability benefits. The incentives ultimately reduced the total cost by 34.7%.

At the state level, Texas’ streamlined permitting process encouraged rapid project development. Texas offers local property tax abatement (Chapter 312) and state sales tax relief for energy projects, of which wind and solar apply. [2] The state’s competitive wholesale electricity market, administered by ERCOT, allows hybrid systems to participate fully in energy and ancillary service markets, creating additional revenue opportunities for both generation and storage.

Combined, these federal and state policies reduce financial barriers, shorten timelines to commercial operation, and support the integration of large-scale renewable and storage assets. The Abilene case demonstrates how a favorable policy environment can accelerate adoption of hybrid systems while delivering economic and environmental benefits to both the project owner and the broader grid.

7 Cost of Power & Energy

The selected renewable and battery hybrid configuration achieved a low Levelized Cost of Energy (LCOE) of $34.5/MWh and a Total Cost of Energy plus Penalties (TCOE+P) of $95.3 million per year. By contrast, a grid-only configuration with minimal BESS backup recorded an LCOE of $98.3/MWh and a TCOE+P of $269.5 million, meaning the hybrid system saved 65% in electric supply costs.  About half of the savings came from the ability to sell excess renewable energy back to the grid. These results highlight the strong economic competitiveness of a balanced hybrid energy system, particularly for high-capacity, high-availability applications such as large-scale data centers.

Conclusion

The grid-integrated renewable and battery hybrid solution—combining 560 MW of solar, 780 MW of wind, a 56 MW / 4-hour BESS, and 500 MW of grid interconnection—emerged as the most technically and economically optimal configuration for powering a 500 MW data center in West Texas. This approach maximized system reliability through resource diversity and storage support, achieved the lowest cost profile among modeled options, and created additional value through participation in ERCOT’s energy markets. The hybrid design demonstrated the ability to balance operational resilience with economic performance, making it a compelling choice for continuous, high-load applications.

While the interconnection capacity in this study was capped at the data center’s peak demand, results suggest that modest oversizing could further improve performance by reducing reliance on grid imports and minimizing load-shedding risk. The Abilene hybrid model provides a scalable, sustainable, and market-ready template for meeting the energy needs of large-scale facilities, illustrating how integrated resource planning can align cost efficiency, reliability, and environmental goals in a single, comprehensive solution.

Example 2: Natural Gas, Solar & BESS

This example evaluates a natural gas generator and solar energy configuration to supply energy for a 500 MW data center near West End, Illinois. The configurations analyzed include combinations of solar PV, combined cycle natural gas generators, battery energy storage systems (BESS), and grid power. The analysis focuses on three core indicators: Levelized Cost of Energy (LCOE), upfront capital investment (CapEx), and the comprehensive total cost of energy factoring in load shortfall penalties (TCOE+P).  It assumed the ITC was available for solar PV and that no capacity payments were available for the Natural Gas generator. Among the tested scenarios, a solar and natural gas hybrid system using 470 MW of solar PV, 310 MW of combined cycle natural gas generation, and 56 MW / 1 hour of BESS in conjunction with 60 MW grid connection support delivered a highly attractive TCOE+P and LCOE.

1 Deployment Schedule

The solar and natural gas hybrid configuration for West End, Illinois, is projected to require a total development timeline of approximately 8 to 10 years from project initiation to commercial operation, primarily driven by supply chain constraints for combined cycle gas turbines (CCGTs) and simple cycle gas turbines (SCGTs), including long-lead components such as heat recovery steam generators, compressors, and turbine assemblies. Grid interconnection in Ameren can add another 2 to 5 years depending on the complexity of required transmission and substation upgrades. Overall, the schedule reflects the need to manage parallel development tracks for gas, solar, storage, and grid components to keep the project on target.

2 Operations

In the West End hybrid configuration, solar and natural gas plants operate as a combined system, each contributing unique operational strengths. Solar PV delivers power during daylight hours, while the combined cycle natural gas plant provides controllable, dispatchable output capable of sustaining the data center load during periods of low solar production or high demand. This pairing reduces the variability typically associated with renewable-only systems and ensures a stable baseline supply.  The load received 32% from solar PV, 67% from the natural gas generator, and 1% from the utility grid.  From the available solar energy generated, 94% went to the load and 5% to the grid as excess energy, and 1% was curtailed. The natural gas generator primarily powered the load with only 0.5% of its generation going back to the grid to provide ancillary services.

The BESS was provided as a minimum to provide back-up power to the facility and given the ability to add operational flexibility by absorbing excess solar output during midday peaks and discharging during evening or low-generation periods. This time-shifting capability could help smooth power delivery and reduces the need for rapid ramping of the gas plant, improving overall efficiency and extending equipment life.  However, the BESS only participated in a single effective cycle in this evaluation.

Grid connectivity further enhances system resilience, serving as a backup source during extreme weather events, extended cloud cover, or unplanned outages. Since the solar PV and Natural Gas generator were able to provide nearly all of the power to the load and the BESS system provided a back-up, a small grid interconnection – only 60 MW grid for the 500 MW load – was found to minimize the electric cost of the system.

3 Reliability

The solar and natural gas hybrid system with grid interconnection achieved consistently high reliability for meeting the 500 MW data center load. The combination of variable renewable energy from solar PV, dispatchable output from the natural gas plant, short-term balancing from the BESS, and a small grid interconnection provided strong operational flexibility. This multi-layered supply structure allowed the system to respond effectively to both predictable and unexpected changes in demand or generation.  The combination allowed for a reduction in size of the Nat Gas Plant for considerable savings.  Likewise, a reduced grid interconnection was required which further reduced cost and schedule.

The inclusion of the BESS was particularly valuable for managing short-duration imbalances, enabling smoother transitions between solar and gas generation and reducing the risk of rapid cycling on the gas turbines. While renewable capacity in this study was capped to match the load, modeling indicates that increasing solar capacity beyond this level could further reduce reliance on grid imports, minimize load-shedding penalties, and improve overall uptime. With multiple, complementary sources of generation supported by storage and grid access, the West End configuration delivered a robust and resilient power supply capable of sustaining continuous high-demand operations.

4 Sustainability

Adding solar to the natural gas generated electricity reduced the system carbon intensity of data center operations by prioritizing on-site solar generation for primary load coverage. During daylight hours, solar PV supplied a significant share of the demand with zero-emissions electricity, while the natural gas plant served as a controllable backup to maintain reliability when solar output declined. This operational profile allowed clean energy to meet most of the load over the course of the year, lowering total greenhouse gas emissions compared to a grid-only configuration.  Including the solar affected for a net reduction in emissions and water consumption by 32%.

Natural gas, while still a fossil fuel, provided a lower-emission alternative to coal or oil-fired generation and enabled more efficient balancing of the system without relying heavily on peaking plants from the grid. The battery energy storage system (BESS) further improved environmental performance by capturing excess solar generation and displacing fossil-fueled generation during peak demand periods. By maximizing local renewable resources, optimizing gas plant dispatch, and minimizing imports from higher-carbon grid generation, the West End hybrid configuration achieved meaningful emissions reductions while maintaining operational security.

5 Location

West End, Illinois, offers favorable conditions for deploying a hybrid system combining solar, natural gas, and battery storage. The region benefits from a decent solar potential for much of the year (although not as good as the US Southwest), allowing for consistent daytime renewable generation. In parallel, proximity to reliable and affordable natural gas supplies within the Ameren Illinois footprint of the Midcontinent Independent System Operator (MISO) region supports efficient and flexible dispatchable generation.

From an infrastructure standpoint, the area’s established electrical transmission network enables straightforward grid interconnection, reducing both project complexity and associated costs. The availability of open land provides flexibility for siting large-scale solar arrays and gas facilities without significant land-use conflicts. Together, these factors create a setting well-suited for hybrid projects that blend renewable and conventional resources to achieve both reliability and cost efficiency.

6 Policy

Federal incentives, including the 30% Investment Tax Credit (ITC) for solar and battery energy storage systems, significantly reduced upfront capital costs and improved the overall economic viability of the West End hybrid configuration. These incentives had a particularly strong impact on lowering the Levelized Cost of Energy (LCOE) for the solar portion of the system.

At the state level, Illinois maintains a generally supportive environment for renewable energy development. Streamlined permitting processes, clear siting guidelines, and established frameworks for market participation within MISO facilitate timely project advancement. When combined, federal and state policies create favorable conditions for hybrid deployments by lowering financial barriers and providing predictable pathways to interconnection and market integration.

7 Cost

The solar and natural gas hybrid system—comprising 470 MW of solar PV, 310 MW of combined cycle natural gas generation, a 56 MW / 1-hour battery energy storage system, and a 60 MW grid connection—achieved a Levelized Cost of Energy (LCOE) of $74.1/MWh and a Total Cost of Energy plus Penalties (TCOE+P) of $207 million per year. In comparison, the baseline grid-only configuration with limited battery backup resulted in a much higher LCOE of $125.6/MWh and a TCOE+P of $346 million.  The hybrid system saved 42% in electric costs compared to utility grid service.

Conclusion

A system combining grid access with a well-balanced mix of solar PV, natural gas generation, and battery energy storage proved to be the most technically and economically compelling configuration for meeting the 500 MW data center load in West End, Illinois. The design leveraged the complementary strengths of variable renewable energy, dispatchable gas capacity, and short-duration storage to deliver high reliability and operational flexibility. Increased renewable penetration consistently reduced the Total Cost of Energy plus Penalties (TCOE+P), driven by improved system availability and additional revenue opportunities through participation in the MISO market.

Example 3: SMR & BESS

This example evaluates energy system options for a 500 MW data center located in Fredericksburg, Virginia. The analysis focuses on a hybrid system combining a small module reactor (SMR), Battery Energy Storage System (BESS), and utility grid interconnection.  The goal was to reduce the CAPEX size and increase the utilization of the SMR and with the BESS.  The grid connection becomes a back-up and allows for additional market participation.  The size combination optimizing on Levelized Cost of Energy (LCOE) and Total Cost of Energy including penalties for unmet load (TCOE+P) was 313 MW of SMR capacity, 56 MW of BESS, and 146 MW of grid interconnection.

1 Schedule

Small Modular Reactor (SMR) deployment is subject to moderately extended timelines, typically ranging from 7 to 10 years from project initiation to full commercial operation. These durations are driven by lengthy and often uncertain permitting processes, high upfront capital investment requirements, and the complexity of nuclear construction. Vendor readiness, supply chain maturity for reactor components, and site-specific regulatory reviews can further influence the schedule.

In the hybrid SMR–BESS–Grid configuration, there is potential to phase in partial operations before the SMR is fully commissioned. By leveraging grid power and battery energy storage during the construction period, the data center could begin limited operations 2 to 5 years ahead of SMR completion. This phased approach offers a means of meeting early demand while maintaining the long-term goal of nuclear-backed, low-carbon baseload generation once the SMR comes online.

2 Operations

The SMR-based hybrid configuration provides stable, continuous baseload generation, a key advantage for powering high-demand, 24/7 operations such as a 500 MW data center. The SMR delivers predictable output with minimal fuel price volatility, while the battery energy storage system (BESS) addresses short-term fluctuations in demand or supply, acting as both a load-balancing tool and an emergency backup during unplanned outages.  The energy supply was sourced primarily from SMR (94.6%), with less than 1% from BESS and 5.4% from the grid. A total of 4,796 MWh of excess SMR generation was sold back to the grid, while BESS contributed no excess sales.

Grid interconnection further enhances operational flexibility by supplying additional capacity during peak load periods or planned SMR maintenance. Compared to a standalone SMR, the hybrid design reduces the need for frequent ramping, which can improve reactor efficiency and extend component life. This combination of steady nuclear baseload, responsive battery storage, and on-demand grid access enables smoother load management and ensures consistent service availability under varying operational conditions.

3 Reliability

Small Modular Reactors (SMRs) are inherently reliable, operating with high-capacity factors that make them well-suited for continuous, mission-critical loads. In the hybrid configuration, this reliability is further enhanced by the presence of grid interconnection, which provides immediate supplemental capacity during unexpected outages, planned maintenance, or periods of partial reactor output. Due to the grid interconnection there was no unmet load.

The addition of the BESS strengthens short-term resilience by covering transient load spikes, bridging supply gaps, and allowing for seamless transitions between nuclear and grid power. This layered approach combines the steady, predictable output of nuclear generation with the responsiveness of storage and the redundancy of grid access. The result is a system that achieves higher overall reliability and uptime metrics at a lower cost than a standalone SMR, without sacrificing operational stability.

4 Sustainability

The SMR hybrid configuration delivers a strong sustainability profile by supplying the majority of the data center’s demand with zero-emissions nuclear baseload generation. This stable, low-carbon output significantly reduces the facility’s overall greenhouse gas footprint compared to grid-only or fossil-fueled alternatives. The battery energy storage system (BESS) further supports environmental performance by optimizing SMR output, storing excess generation during periods of low demand, and reducing reliance on higher-emission grid power during peak consumption.

Fredericksburg, VA, situated on the Rappahannock River with several nearby reservoirs, has adequate water resources to support SMRs. Modern designs cut water use to ~500 gal/MWh with recirculating systems, far lower than the ~39,000 gal/MWh withdrawn by older once-through plants.

While the grid connection introduces some emissions depending on the regional generation mix in Virginia, its role in this configuration is primarily supplementary, covering short-term peaks or rare instances of SMR downtime. As a result, the hybrid approach preserves the environmental benefits of nuclear generation while improving operational flexibility and economic feasibility.

5 Location

Fredericksburg, Virginia, offers several advantages for deploying a Small Modular Reactor (SMR) in combination with battery storage and grid interconnection. The region has direct access to the PJM Interconnection, one of the largest and most competitive wholesale electricity markets in the United States, ensuring both operational flexibility and market participation opportunities. The compact plant size also allows for a flexible build in the heavily populated Northeast part of the United States.

Proximity to multiple DOE-recognized advanced reactor development corridors provides access to industry expertise, specialized vendors, and potential federal support programs. The availability of reliable cooling water sources, existing transportation and utility infrastructure, and suitable industrial-zoned land further supports SMR siting. Additionally, Fredericksburg’s location near major data and defense centers strengthens the case for local, resilient, low-carbon baseload generation to support mission-critical operations.

6 Policy

Federal support mechanisms, such as the Investment Tax Credit (ITC) and the advanced nuclear production tax credit under Section 45U, are critical in improving the economic viability of SMR deployment. Additional funding opportunities through federal infrastructure and clean energy programs can further offset capital costs and support early-stage development. In this case, these incentives reduced project costs by about 1.5%, or roughly $4 million in savings.

At the state level, Virginia’s energy policy recognizes the value of clean, firm baseload power and actively supports nuclear innovation through research partnerships and pro-nuclear legislation. While nuclear projects face rigorous regulatory requirements, the hybrid configuration may encounter fewer permitting challenges by partially relying on existing grid assets to meet early operational needs. This approach can reduce immediate capacity requirements for the SMR, potentially streamlining the path to phased deployment.

7 Cost

Among the SMR configurations evaluated, the hybrid system—comprising 313 MW of SMR capacity, 146 MW of grid interconnection, and battery energy storage—delivered the most favorable results, achieving a Levelized Cost of Energy (LCOE) of $102.1/MWh and a Total Cost of Energy plus Penalties (TCOE+P) of $281.2 million per year. By comparison, removing the grid for a standalone SMR configuration (459.3 MW) paired with BESS posted a higher LCOE of $122.9/MWh and a TCOE+P of $338.9 million annually.  While the grid-only configuration (no SMR or BESS) proved the least cost-effective, with an LCOE of $128.9/MWh and a TCOE+P of $353.5 million per year.  The hybrid system saved 20% over sourcing only from the utility grid.

The superior performance of the SMR coupled with BESS and grid stems from its ability to leverage grid flexibility to right-size nuclear capacity. This approach reduces capital expenditures while preserving high reliability and long-term energy security. By optimizing the balance between dispatchable nuclear output, battery storage, and grid imports, the hybrid model offers both economic efficiency and operational resilience.

Conclusion

The Fredericksburg SMR–BESS–Grid hybrid configuration proved to be the most balanced and cost-effective option for supplying a 500 MW data center when compared to standalone SMR and grid-only alternatives. By integrating steady, zero-emissions nuclear baseload with responsive battery storage and flexible grid access, the system achieved a strong combination of reliability, sustainability, and economic performance. Right-sizing the SMR capacity reduced capital costs without sacrificing uptime, while the grid connection provided operational redundancy and market opportunities. This approach offers a scalable model for future high-demand facilities seeking to pair advanced nuclear technology with complementary resources to deliver secure, low-carbon power over the long term.

Example 4: Geothermal

The examples configurations analyzed includes a combination of a geothermal, BESS, and grid hybrid system to supply energy for a 500 MW data center in southwestern Nevada near the town of Goldfield. The analysis focuses on three core indicators: Levelized Cost of Energy (LCOE), and the comprehensive total cost of energy factoring in load shortfall penalties (TCOE+P). Among the tested scenarios, a 340 MW geothermal power, 160 MW utility grid, with a 56 MW / 1 hour of BESS delivered a highly attractive TCOE+P and a LCOE.

1 Schedule

The geothermal and diesel hybrid configuration is expected to have a moderately short development timeline compared to other large-scale generation projects, with commercial operation achievable in approximately 3 to 5 years. This schedule benefits from the relative availability of key components—diesel generators can be locally sourced with minimal supply chain constraints, and geothermal development relies primarily on established drilling, wellfield, and plant construction practices.

While the geothermal portion requires site-specific exploration, resource confirmation, and permitting, these processes are well-understood within the industry and can be advanced in parallel with other project phases. Grid interconnection may add an additional 2 to 5 years depending on transmission upgrade requirements, but this is generally considered a manageable factor with early coordination. The combination of proven technologies, domestic supply chains, and parallel development tracks supports a comparatively efficient deployment schedule for this hybrid system.

2 Operations

In the Southwestern Nevada configuration, geothermal and grid operate as complementary resources to meet the load. Geothermal power provides steady, around-the-clock baseload generation, ensuring a consistent supply that is largely immune to weather or seasonal fluctuations. The utility grid offers rapid-response, dispatchable capacity to cover high demand periods, or bridge supply gaps during geothermal maintenance or reduced output events.  In the optimum scenario, the Geothermal plant served 94% of the load’s demand, while the utility grid served 4%.   The geothermal plant produced about 4.5% excess power that is sold to the grid and curtailed less than 0.01%.

The battery energy storage system (BESS) provided the lowest cost emergency back-up power and further enhances operational performance by absorbing excess generation during low-demand periods and discharging during brief spikes in load.  The BESS also allows the system to comply with any ramp-rate or ride-through constraints that the utility grid may impose on the interconnection.  In the studied scenario, the BESS discharged about 54 cycles, which was only about 0.1% of the load’s demand.  This multi-layered approach—combining constant geothermal output, responsive storage, and grid support—results in a highly reliable and adaptable power supply for mission-critical operations.

3 Reliability

The geothermal-grid hybrid system with integrated BESS demonstrated high reliability by combining the constant output of geothermal baseload generation with the flexible dispatch capabilities of BESS and the utility grid.  This combination allowed the system to respond effectively to fluctuations in demand, planned maintenance, or unforeseen generation shortfalls.  Scenarios incorporating diesel backup showed diminishing returns from a reliability standpoint.  Although diesel added dispatchable capacity, its contribution did not significantly improve uptime beyond the high baseline already provided by geothermal and BESS. At the same time, its inclusion increased both the Levelized Cost of Energy (LCOE) and the Total Cost of Energy plus Penalties (TCOE+P). As a result, while technically reliable, a diesel-supported hybrid was not considered the most cost-effective path to meeting performance and sustainability objectives.

4 Sustainability

The geothermal–diesel hybrid system reduces dependence on external fossil-fueled power by prioritizing clean, renewable geothermal generation for the majority of the data center’s load. Geothermal provides a constant, zero-emissions baseload supply, significantly lowering the system’s carbon footprint compared to grid-only or fossil-heavy alternatives.  The utility grid, used sparingly, serving as a flexible backup during high demand periods, extreme weather, or unexpected system stress, thereby limiting its environmental impact.

Geothermal water consumption varied by cooling method. Binary air-cooled geothermal systems can operate with near-zero freshwater use, since produced fluids are reinjected into the reservoir. By contrast, wet-cooled systems in other regions may consume from tens to thousands of gallons per MWh through evaporative cooling.  Overall, the hybrid system ensures minimal freshwater impact, aligning with sustainability priorities in arid environments.

The inclusion of battery energy storage further enhances sustainability by optimizing geothermal utilization, storing surplus output during off-peak hours. By maximizing Nevada’s abundant geothermal resources while integrating responsive, targeted backup capabilities, the system achieves strong environmental performance without compromising operational reliability.

5 Location

Southwestern Nevada, particularly the area east of Goldfield, offers highly favorable conditions for hybrid geothermal energy development. The region’s exceptional geothermal resource potential supports consistent, long-term baseload generation, while existing transmission infrastructure facilitates efficient grid interconnection. The area also benefits from ample land availability for facility construction, well-established access routes for equipment delivery, and a regulatory environment supportive of renewable energy and hybrid system deployment. Together, these factors make Goldfield and the surrounding region a strong candidate for projects that integrate renewable baseload generation with conventional and stored power resources to achieve both reliability and operational flexibility.

6 Policy

Federal support through the Production Tax Credit (PTC), offering 2.75 cents per kWh for electricity generated by geothermal projects during the first 10 years of operation, plays a key role in improving project economics and offsetting capital investment. This incentive directly enhances the financial viability of geothermal development by lowering the effective cost of generation during the early years of operation.

At the state level, Nevada provides one of the most favorable environments in the U.S. for geothermal deployment, with abundant high-quality resources, a supportive regulatory framework, and well-established permitting processes. These factors reduce administrative hurdles and enable more predictable development timelines. When combined with federal incentives, Nevada’s policy landscape strongly supports the integration of geothermal into hybrid energy systems that pair renewable baseload power with complementary conventional and storage resources.

7 Cost

The optimum hybrid configuration consisted of 340 MW geothermal, 160 MW utility grid interconnection, and a 35 MW, 1 hr BESS and achieved an LCOE of $73.6/MWh and a TCOE+P of $214 million per year.  The addition of a 100 MW diesel back-up system increased LCOE to $108/MWh, which proves difficult to justify the additional redundancy, since in the scenarios run, the diesel was never required to operate.  By comparison, a grid only electric supply resulted in an LCOE of $136/MWh, meaning the hybrid solution results in a 46% savings on electric supply cost. 

Conclusion

The analysis confirms that a geothermal-led hybrid system incorporating BESS and grid interconnection as secondary sources offers a strong overall performance across cost, reliability, and sustainability metrics in this area. By leveraging Southwestern Nevada’s abundant geothermal resources, the configuration delivers low lifecycle costs, stable baseload generation, and significant environmental benefits, all supported by a favorable policy environment and established infrastructure.  While adding diesel generation to the geothermal plant can provide backup capability, its inclusion raises both LCOE and TCOE+P without delivering much more reliability, making it a less compelling choice. The findings reinforce that geothermal-driven hybrids, supported by BESS and grid access, represent a practical, cost-effective, and resilient pathway for meeting large-scale, long-term energy demands in the region.

Summary

On-site hybrid power plants can save large loads significantly on their electric supply costs.  Scenarios studied in four areas around the country resulted in 20% to 65% savings with co-located hybrid generation compared to a straight utility grid supply.  Each location in the country also had unique technology combinations found by optimizing for the lowest energy supply cost with different requirements for deployment schedule, operating capabilities, system reliability, environmental sustainability, site feasibility, and policy considerations.  Although navigating these factors is complex, this work outlines the critical issues and provides a structured approach for identifying the most effective energy solution.

References

[1] “TTU System and Fermi America Announce the World’s Largest Advanced Energy and Intelligence Campus”, Texas Tech University System News Story, June 26, 2025,  Available online: https://www.texastech.edu/stories/25-06-ttu-system-and-fermi-america-announce-partnership.php. [Accessed 10 September 2025].

[2] Texas Comptroller Webfile, available online: https://comptroller.texas.gov/, [Accessed 15 Sept 2025]