Sunday, June 17, 2018

Distributed Renewable Energy Industry Trends

Nothing will stand out in 2018 as more important for the long-term success of renewables than the advancement of a digital grid architecture.
Visibility at the grid edge; integration of sensors and data analytics for distributed generation; smart contracts for energy management; flexible demand; intelligent control systems — these are the buzzy technologies of today that will become standard operations for utilities, system operators, and power producers to maximize the global renewable energy fleet.

Advances in distributed technologies at the frontiers of the energy system can provide power where the traditional grid is non-existent, inadequate, expensive or too distant for connection.
These technologies, and the innovative business models that deploy them, can deliver not just energy but also economic opportunities to the two billion people not reliably served by the energy industry today. But where exactly are the opportunities? Who are the leaders in the sector? Which markets are they likely to capture?

1. The largest solar deal in Africa last year was off the grid 
  • Small-scale solar projects, including debt financing for distributed portfolios, accounted for five of the eleven largest solar deals in Africa between January and October 12, 2017.
  • This is not necessarily because off-grid financing is a large market, but because many utility-scale projects in the pipeline struggle with permitting, land acquisition, securing a power purchasing agreement and financing. Off-grid solar companies may be able to move faster because they do not require regulated tariffs.
2. Distributed energy outside the OECD is a $40 billion industry
Diesel generators have long been the technology of choice in areas where reliable grid electricity is unavailable. In 2015, developing countries bought and installed about 600,000 units annually, totaling an estimated 29GW of capacity. About half of this is in units smaller than 0.3MW. There is a mature market and supply chain to sell, fuel and maintain this kit. Despite usually being competitive with diesel, solar currently has less than 3% of the market for distributed energy capacity in developing countries, but considerable potential.
Power capacity additions in developing countries in 2015

3. Solar and storage make sense for telecoms
Hybrid energy systems consisting of solar panels, a battery and a diesel generator are the cheapest way to run the world’s one million telecom towers that today have unreliable grid supplies. Telecoms and their suppliers spend around $3.8 billion on diesel for their towers today, but solar has a market share of only 3%. But the market is picking up. Orange is working with Engie on re-powering its towers in Senegal, Ivory Coast and Cameroon. Mitsui has invested $9 million in India’s OMC, a start-up focused on solar-power for telecoms.

Estimated cost of electricity to power an off-grid telecom tower in 2025


Source: Bloomberg New Energy Finance. Note: solar hybrid is PV, diesel generator and lithium-ion battery.

It is time for AMES - Clean Energy On Demand - to shine. One module can generate up to 90 kWh of energy a day which can serve 8-12 households. An array of 10 to 12 modules can provide uninterrupted source of energy for a village of 400 people.