Energy market volatility caused by macro-economic events such as Brexit and the “Trump effect” are having a substantial impact on the amount businesses are paying for their electricity. However, the increasing popularity of behind-the-meter renewable electricity has some businesses uttering a familiar phrase – it’s time to take back control… of our energy supply.
Events such as Brexit, Trump and the financial crisis are not typically associated with increased interest in renewables, but the uncertainty these events create in global energy markets is making the cost of “traditional” fossil-fuel commodities increasingly unstable. For instance, oil prices – a key signifier of the state of the global economy – rose to a four-year high in October 2018, but collapsed mid-month following reports of rising US stocks.
In November, Britain’s plans to use new nuclear to replace dirty coal-fired generation suffered a major setback when Toshiba’s UK nuclear arm, NuGen, pulled out of the Moorside nuclear plant in Cumbria. That has left a 3.4GW hole in our energy supply – equivalent to 7 per cent of UK capacity. If left unresolved, this uncertainty in future supply could mean a hike in energy bills across the UK.
This ongoing volatility is causing real headaches for medium and large energy users when trying to plan their ongoing costs. That’s why the most savvy energy managers and finance directors are on the hunt for new ways to shelter from volatility and protect their bottom line. One simple way for businesses to achieve this is to install renewable generation on-site – thus making them more self-sufficient and reducing reliance on market costs.
This behind-the-meter renewable generation also provides an invaluable opportunity for businesses to cut their carbon footprint. This is good for the planet, gives businesses an environmental social governance edge on competitors, and protects them from rising carbon prices.
Currently, many large UK companies pay a price for the carbon they emit through the EU’s Emissions Trading System (EU ETS). The more carbon-intensive a company is, the more it pays. But on-site renewable energy can protect a company from these rises.
What is more, for companies looking to commit to the RE100 movement – a collection of influential companies committed to 100 per cent renewable power – on-site renewables offer a quick and significant win.
Utilising multiple technologies
A key driver of the growth of behind-the-meter generation is the maturing energy storage market. This is because batteries make it easier for businesses to reap rewards from buying electricity at off-peak times and selling it back during premium peak hours. In fact, new research from Haven Power shows that a third of UK businesses have already installed on-site battery storage and more than half of British businesses consider energy usage as one of their top three priorities.
Technology-agnostic companies that offer on-site wind, solar and storage are empowering businesses and giving them more flexibility to reap the biggest rewards. Last year, a joint venture between Aura Power and Thrive Renewables began offering thousands of UK businesses the chance to use battery energy storage systems to cut electricity bills at no cost to themselves.
Installing on-site renewables –easier than you think
One of the biggest hurdles for businesses looking to adopt behind-the-meter renewables, increase their self-sufficiency and reduce exposure to energy price volatility is the initial cost and planning involved.
Fortunately, there are many ways to overcome these challenges. The majority of behind-the-meter technologies – including wind turbines, solar panels, and energy storage systems – can be installed at no cost to the user.
In some cases, businesses can even charge rent to the installer – creating an extra revenue stream. Installers support this business model by selling a small proportion of the electricity generated to the grid.
Whispers that energy regulation will change are another source of trepidation for businesses. This would mean those with on-site generation may have to pay for transmission and distribution network costs – something they currently avoid. However, even with this change, businesses that produce their own energy still stand to benefit from money off their energy bills.
Specialist, values-driven financiers can also provide expert guidance and project manage the whole process, making it much easier to install renewables than it may first appear.
It’s clear that there are huge benefits to be had from behind-the-meter renewable generation and storage, so it is time for businesses to protect their bottom line from price volatility and take back control of their energy supply.
The AP-peel of wind
Since 2014, the Greenvale AP potato processing facility near March in Cambridgeshire has been benefiting from renewable energy being generated by a Thrive Renewables wind turbine erected next to its buildings.
Greenvale is committed to sustainability and had worked with a national developer to gain the necessary planning permission and grid connection for the new wind turbine to supplement its solar PV system.
The clean, abundant wind energy produced by the turbine now provides up to 75 per cent of Greenvale’s energy demand.