This is your SolarWakeup for December 3rd, 2021

No Denying The Transition. Whether is the EIA, BNEF or your local headline, the energy transition is showing its way to the top. Solar, wind and new sources like green hydrogen are getting build anywhere developers can get land, approvals and revenue streams. It’s not just the ESG/climate movement creating the demand, its capitalism and the access to revenue that is enabled by energy storage joining the party. I’ll give you an example, if a power plant (any type of fuel source) connects to the grid, it exports everything it produces when it produces. Solar and wind plants produce anytime the natural resource is available (i.e. its sunny) versus some peaker plants that run 20 hours per year, made only profitable by capacity contracts. This power plant already has a grid interconnection agreement, approvals and land which means adding storage is easy. Storage now allows the timing gap to occur between generation and export that is a proprietary energy arbitrage between fuel cost and energy value. When you control your marginal cost of production, controlling your value of export is the key to success.

So Many Use Cases. The exciting part of our work today is that a new market opportunity comes to fruition every day. In recent RFPs by utilities, generation without fuel cost matched with dispatch capability has been cheapest and the most reliable long term cost to consumers, i.e. no fuel cost volatility. Regulators in the Northeast are hearing arguments about reliability for the grid as well, especially in winter events. While we do little to value reliability, resilience and societal benefits in our grid investments, consumers are taking some of those matters in their own hands as well by buying solar and storage for their homes and businesses. What is the value of reliability? per kWh please…

Managing The Pace Of Change. In yesterday’s SolarWakeup, we saw a chart of EV market share and it’s incredible to see it as almost nonexistent still. If you’ve been to a charging station recently with your EV, you’ve recently waited in line for a charging port. Now for a repeat of something you’ve read here before, there’s a reason that Tesla’s energy storage business is called stationary power because the vehicles are the mobile version of it and this is where grid operators see value and incredible challenge. How do they forecast when vehicle owners would be willing to ‘charge’ the grid versus charge their car, i.e. how reliable is the EV owner as a power source. Now 10x the market share of EVs…

Looking At 24 x 7. With Amazon doing another 1GW of corporate procurement, let’s recall the next two steps that happen for corporates. First, all energy consumption will be offset with procurement and REC purchases. Second, all energy consumption will be offset by renewable energy procured within the same time segment, i.e. 2am consumption offset by 2am renewable generation. Lastly, the time match will be supplemented by geographical match. That’s how 24 x 7 will work for every major corporate. 

Opinion

Best, Yann