Pete Bevils, the CEO and Founder of EV3POWER, explains how battery energy storage could help reduce the reliance on the grid and thus reduce a business’ impact when it comes to rising energy costs.
Batteries and energy storage will play a significant role in the future of the UK business economy. Energy research company Wood Mackenzie estimates the market will grow 27 times in GWh terms by 2030, adding 70 GWh of capacity a year to exceed 729 GWh by the end of the decade.
Commercial and environmental considerations are driving the growth in the market. Recently, the rise in the cost of energy has thrust alternative means of power further into the spotlight. It has many businesses looking at the feasibility of reducing their energy bills by adopting a sustainable energy strategy that includes battery storage.
The need for businesses to reduce energy costs is exacerbated by the growth in electric vehicle sales and the rapid advancement of the EV infrastructure across the UK.
Private and public sector investment in a range of e-mobility solutions continues apace. From electric car fleets, to EV buses, trucks and vans, commercial entities are experiencing increasingly higher electricity costs. Whilst this cost is off-set by savings made through EV grants and fuel prices, businesses are sensibly looking at ways to keep a tight rein on this rapidly growing line in their budget.
One way to do this is to use battery storage as a means of reducing energy bills, but this part of the answer, and only half of the question.
Getting the right fit
It’s stating the obvious, but batteries need to be fuelled by something, whether that’s the grid or renewables. Taking power from the grid to fuel battery storage could help save money. How much and where the cost saving opportunities are depends on the business and the sector in which it operates. For example, a logistics company with an EV fleet will have very different energy needs to a financial services company.
Ideally, investment should be made in renewable energy sources such as solar, wind and hydrogen, as well as battery storage, to reduce reliance on the grid or, in a perfect world, take a business off-grid completely.
As we gradually shift electricity production over to renewable sources such as wind and solar, it’s becoming obvious that there are major sections of our economy that will benefit from being off-grid.
The main energy generation technologies we can use to do this are wind and solar, which are not only mature and established but also cheaper than anything else we have today.
Which brings us to the second part of the question. For businesses that have a self-sufficient energy infrastructure, batteries should be considered an asset for generating revenue. So, the question develops from “how do I save money by investing in battery storage?” to “how do I make money by investing in battery storage?”
Almost all off-grid solutions have batteries at their heart. They are the powerhouses of the off-grid infrastructure and they can play a key role in shifting energy demand and generation patterns, allowing excess to be stored so it can be sold at times of greater need – and value.
What’s amazing about the success story of batteries so far is that it has been achieved pretty much in the absence of subsidies.
Unlike solar and wind, which were originally propped-up through feed-in tariffs and similar support mechanisms, almost all battery installations worldwide have earned their keep from day one.
Batteries have been able to do this because they can support numerous value-creating applications, from improving solar power self-consumption to facilitating energy arbitrage. And as time goes by, markets are creating even further opportunities for energy storage to deliver value.
The good news for business is that sustainable energy production and storage is getting more efficient all the time and costs are reducing. For example, battery costs have dropped to the point where they can be incorporated into renewable energy projects without significantly impacting the levelised cost of electricity (LCOE).
Commercial considerations aside, the environmental benefits of batteries are numerous. The critical question is: when fossil fuels have been phased out, what will happen for the hours or days when the sun doesn’t shine, and the wind doesn’t blow?
In Europe, this can happen for several weeks a year, over large regions. The likelihood of such weather patterns has prompted some observers to question whether there will ever be enough storage to tide the grid over. Batteries alone will not be able to solve the problem, that’s for certain – but it’s clear that as the battery storage market grows and renewables are adopted more widely, businesses that take a long view will reap the long-term benefits.
The key to success for any business thinking of either reducing costs and carbon usage or aiming to use battery storage as an asset for revenue generation, is to find the right commercial partner.
It is important to engage experts who understand the renewables and energy storage landscape and the market. Ideally, if businesses are looking to invest, or have invested, in EV cars or commercial vehicles, they choose a partner who understands EV instructure and how the network of energy production, storage and usage fits together. They will help you develop the right solution for your specific business and sector and help you identify where costs can be saved and where revenue opportunities lie.