Renewable energy projects continue to increase in size and scale
Recently, a major milestone was reached for the realization of the world’s largest PV solar and storage project in the Northern Territory, Australia after Singapore-based Sun Cable signed a Project Development Agreement with the Northern Territory Government (Sun Cable, 2021). The project is designed to deliver renewable electricity to Singapore via a 3,800km long subsea HVDC cable, which is a very significant undertaking. The project’s land-based size, at 10 GW generation and 30 GW storage capacity is immense, spanning an area of 12,000 hectares (~30,000 acres). That’s more than 16,000 international standard rugby fields! Also, in Australia, CEP Energy has secured a 30-year lease to build the 1.2GW battery project in the small industrial town of Kurri Kurri, New South Wales. This would be, by far, the world’s largest battery storage project.
From an economies of scale perspective, we may have yet to hit the solar project size limit on minimizing capital cost and maximizing operating efficiencies. Let’s recall that photo-voltaic (PV) solar costs, on a levelized cost of energy basis, have fallen by as much as 90% in the past 10 years (IRENA, 2019) as a result of increased competition, and raw material, manufacturing, logistics and supply chain efficiency gains. In further driving down costs, we will likely see the introduction of more automation and robotics on these large projects from a construction and operational maintenance perspective. But does bigger always mean better? There are many political, economic, social, technological, environmental, and legal factors to consider when answering this question.
Large, centralized points of utility-scale generation have been the traditional approach to designing and operating our electricity grids. The big renewable energy projects will continue to find their place in the future of centralized grid-connected power generation, but as we’ve seen with extreme events caused by climate change, this approach does have its limitations. Storm/hurricane/cyclone events are becoming more powerful and extreme forest fires more prevalent. These events have had devastating effects on our electricity transmission infrastructure in North America several times over in the past couple of years. Securing our energy supply from multiple, smaller sources that are closer to our points of consumption can be a mitigating solution.
Renewable energy generation and storage is increasingly penetrating a broad range of industries, such as mining, transportation, chemical, heavy manufacturing, industrial, and data centres. These projects, designed to manage the generation and storage of electricity close to our point of consumption, are known as distributed, embedded or behind-the-meter microgrids. There is an opportunity for many companies to turn these opportunities into a reality.
Recent technology and business model innovations are now converging to make a distributed microgrid energy project, incorporating renewables and storage systems, an attractive proposition. This will continue to drive growth in our collective transition towards a net-zero renewable energy future. Some of the compelling market forces and technical/commercial advantages for renewable energy microgrids include:
- Falling capital and operating costs for renewable energy microgrid infrastructure and energy storage options;
- Various financing options now being available to mitigate project funding constraints;
- Increased energy-as-a-service (EaaS) market competition from utility-independent companies offering Power Purchase Agreements and Build-Own-Operate contracts;
- Improved electric reliability, resilience and security;
- Improved sophistication of microgrid control systems through application of IoT (Internet of Things) technologies is overcoming problems related to integrating high penetration rates of solar energy with battery storage;
- Reduced risk by locking in predictable energy use and costs;
- Improve corporate sustainability and realization of ESG objectives;
- The electrification-of-everything trend will increase our need for low carbon electricity as an energy source;
- Many local electricity distribution companies, regulators, governments and policymakers are now putting more concrete plans in place to better manage the grid interconnection of distributed energy resources.
There are lots of advantages to consider and a strong consulting firm can help you navigate these opportunities and their advantages. The first steps is to assess the technical and commercial potential of integrating renewable energy sources into your company. This will help identify solutions to lower your carbon footprint.
To do this:
- Identify your ESG, financial and other related corporate objectives.
- Hire a consulting firm to translate those objectives into opportunities for improvement in your system operating efficiencies, carbon footprint and energy sourcing through a detailed energy audit of your planned or existing operations. Understanding the renewable energy potential of your operations is a key outcome of this step.
- Have multiple scenario and sensitivity analyses completed using computational methods to determine the most attractive go-forward options.
- Implement the selected approach and report the GHG emissions reductions.
For further information and a full set of references please get in touch.