Reshaping renewable storage

As the energy sector turns more and more towards the green transition, new challenges are appearing. One of the main drawbacks of renewable energy sources – their reliance on potentially inconsistent weather conditions – thus draws attention to energy storage systems, which can store and deliver electricity based on demand. .

Increasingly popular with the growing demand for cleaner energy, this type of distributed production brings a number of advantages such as reducing the loss of electrical energy in the distribution system, reducing voltage fluctuations, increasing reliability, improving power quality, reducing energy costs and increasing customer satisfaction.

While renewable storage options also come with unique considerations, including protection parameters, power system stability, regulation, and funding, the industry is going above and beyond to harness the potential of this. expanding field.

The evolution of renewable storage

With the growing importance of storing renewable energies in order to use them more efficiently, energy companies have a crucial role to play in advancing and navigating the industry, developing new solutions to some relatively new problems.

“We expect industry leaders to be at the forefront of sustainability and zero carbon strategies, with many already adopting green technologies such as solar panels on warehouse roofs. , low- or zero-emission fleet vehicles and other fuel-efficient solutions, ”said James Smith, UK Managing Director of cube-based warehouse automation company AutoStore.

Indeed, any company in the storage solutions sector has the possibility of benefiting from solar energy, given the large dimensions of the warehouse roofs. However, more traditional businesses will have to deal with changing market conditions, as many incentives will be put in place to encourage greener options and deter larger polluters.

“Those companies that wish to operate in the urban and downtown environments of the future will need to adopt green energy solutions or be prepared to pay large emission-related energy tax premiums, which will likely make them uncompetitive. compared to companies that can demonstrate their green credentials. “, says Smith.

In this pivotal time, as the energy storage market and the number of storage technologies under development expand at a rapid rate, energy storage is becoming essential for the development of clean energy projects without subsidy. , who generally provide zero carbon electricity at reduced costs for consumers.

Maria Connolly, partner and director of UK law firm TLT, said: “Developers and investors understand that adding storage capacity to clean power generation assets not only helps mitigate such risks. as price fluctuations, cannibalization and negative prices, but ultimately makes these programs more viable and opens up the prospect of future sources of additional income. “

Obtain financing for storage solutions

With few industries witnessing as much innovation as energy storage, investments in battery research have resulted in exceptional developments such as flux batteries, molten salt batteries, liquid air and hydrogen, from micro-storage projects to large storage facilities, co-located with large clean energy projects.

Intertwined with flourishing technological and scientific innovation, there has been a rise of encouraging new funding and investment models that have spurred the practical deployment of battery technologies and clean energy sources.

“Private equity investors have led the way in funding co-located storage solutions with clean energy projects and, to ensure these projects come to fruition and are financially successful, they have focused on full sustainability. of each collocated asset. this has led to the development of different models capable of monetizing storage solutions, ”says Connolly.

While these private investors have provided the support needed to start such a business, traditional lenders are also getting used to the terrain as they seek to diversify their loan portfolios with clean energy and battery assets. .

“Indeed, last year a project finance model hit the market that uses a multi-tranche debt structure that matches the multi-level risk profile of the revenue model. It is through the development of these new financial models that during this year we are likely to see multi-technology programs, such as subsidy-free solar with energy storage, attracting funding for the first time by borrowing, ”Connolly said. said.

As debt financing of such projects opens the door to new opportunities for clean energy and storage systems in the medium term, systems that move away from risk, meet project finance requirements, and offer Greater flexibility are likely to be favored by operators trying to secure financing.

However, Connolly advises developers and investors to approach these opportunities with caution, keeping a few considerations in mind.

“[They] must ensure that their project rights, permissions and contracts are all in order of course, but also that from a legal and planning standpoint their projects are adaptable. For example, in terms of the import and export capacity authorized to the national grid or whether the addition of new technologies will be possible in the future to create additional sources of income, ”she said.

The changing nature of supply chains

Driven by the pandemic and exposed by the need for energy companies to update their work processes, including supply chains, industry adoption of carbon reduction methods has been approached from different angles. .

Smith explains, “Some solutions include the use of micro-fulfillment, dark warehouses, and robotic order picking. A key attribute of robotic systems is low power consumption; for example, 10 AutoStore robots consume less energy than a household vacuum cleaner, which makes them very attractive for warehouses who want to be as environmentally friendly as possible.

“These systems also require less space due to the density in which they can operate, allowing warehouses to use up to four times the space efficiently. “

An example of an innovative solution is the storage system from Scottish operator Carbon Neutral Energy, which recently launched a £ 300million fundraiser as part of its offering to help prevent emergencies such as Texas blackout during a winter storm earlier this year.

Leveraging a range of mobile and modular energy storage systems with high capacity battery storage, Carbon Neutral Energy strives to increase green electrification and reduce carbon emissions, thereby contributing to the ‘Achievement of the net zero objective.

While the supply chain industry still relies heavily on an industrial model, centralized processing and supply chains, more targeted investments in such solutions could play an important role in reducing times and emissions, as well as in preparing for efficient delivery by autonomous electric vehicles. in the future.

Regarding the urgent need for new legislation and policies that accompany the evolution of the industry, Black-smith Says, “With industry leaders working towards global consistency in large institutions adopting net carbon strategies, companies that have already invested in low carbon and energy efficient solutions, or are considering investing. in these, are the most likely to attract the main donors. and achieve the most attractive rates, as their companies will align with net-zero initiatives.

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