2020 and COVID-19 have dramatically altered timeframes for adoption of various green technologies. In the case of renewable energy, 2020 has meant continued investor confidence and renewed interest in forward-thinking innovations. In a recent survey conducted by the American Council on Renewable Energy (ACORE), “renewable energy investors remain as confident in renewable energy growth over the next three years, as they were in 2018-2019” and are “similarly confident in expectations of rapid energy storage growth” (Ahmad & Hunter, 2020). Developers and financiers also share high confidence in the renewable energy sector. For example, over half of the financial institutions who participated in the ACORE survey indicated that they planned “to increase their investment in renewables by more than 10% in 2020 compared to 2019” (Ahmad & Hunter, 2020). Investors also ranked energy storage as the most attractive renewable energy investment between 2020 and 2023, according to the ACORE survey. High investor, developer, and financier confidence all point to renewable energy as a strong investment category.
Additionally, costs for renewable energy technologies have significantly declined well ahead of predictions. According to a new report published in June 2020 by the International Renewable Energy Agency (IRENA), “renewable power generation technologies have become the least-cost option for new capacity in almost all parts of the world” (International Renewable Energy Agency (IRENA), 2020). Fossil fuels are no longer the lowest cost option for new power generation. Lower costs for renewable energy will more than likely also lead to increased investment, adoption, and deployment rates.
Advancements in and deployments of grid-enabling technologies such as energy storage also make renewables an attractive investment. Grid-enabling technologies are technologies that improve the flow of power to and from the grid while also enhancing reliability, flexibility, and production. As a grid-enabling technology, energy storage not only shifts energy to peak hours, it also promotes the adoption of more solar. With distributed energy storage, for example, customers “can avoid peak demand charges and enable a more resilient grid, preventing demand spikes that can cause brownouts or grid failure” (Project Drawdown, 2020).
In recent weeks and months, several companies have announced solar plus storage projects of varying sizes. As reported in Greentech Media, Google and NV Energy, the Nevada utility, announced that 350 MW of solar plus up to 280 MW of energy storage would be procured to serve a Google data center facility proposed in Henderson, Nevada. Capital Dynamics and Tenaska formally announced a partnership to develop and operate nearly 2 gigawatts of solar plus up to 7.8 gigawatt-hours of energy storage to serve key California markets, also reported in Greentech Media. Just last week, Duke Energy Florida announced that it would build three different battery energy storage projects totaling nearly 30 MW. Two projects would be dedicated battery storage facilities, and the third would be a microgrid plus energy storage project. Investments in grid-enabling technology companies have also been strong. In July 2020, Station A, a company that’s automating clean energy development for commercial buildings, announced that they “raised $3 million in venture capital to expand its [SAAS] platform.” Just last week, SparkMeter, a grid management services, equipment, and software solutions provider, announced it raised $12 million in Series A financing. Also last week, Raptor Maps, a solar software startup that’s optimizing operations for solar farms, announced the close of its $5 million Series A round. The above solar plus storage projects and investments represent only a tiny fraction of the potential impact from grid-enabling technologies.
Although we have seen promising signs of investor confidence, we still need more investment in grid-enabling technologies. According to Gregory Wetstone, president and CEO of ACORE, “if we’re to...stay within shouting distance of the greenhouse gas emission reductions [that] scientists tell us are needed to avoid the worst impacts of climate change, annual investment must significantly scale up — including investment in grid technologies that enable the integration of renewable energy, such as energy storage.” Distributed energy storage has the potential to accelerate the renewable energy adoption rate by also enabling solutions such as microgrids, net zero buildings, rooftop solar, and the decentralized smart grid (Project Drawdown, 2020). As we move through COVID-19 and beyond 2020, investing in distributed and smart energy storage solutions will help us build the grid of the future. Distributed energy storage may be the breakthrough that transitions the grid to a mix of centralized and decentralized assets. Project Drawdown notes that “a $500 billion investment in distributed energy [storage] systems would save U.S. businesses and households $4 trillion in peak-demand utility billing over the next thirty years” (Project Drawdown, 2020). An investment of this magnitude would also increase reliance on renewables and produce huge climate benefits. And those results alone would create a pretty good ROI for investors and global citizens alike.
Ahmad, M., & Hunter, L. (2020). Expectations for Renewable Energy Finance in 2020-2023: Survey of Leading Financial Institutions and Developers $1T 2030 Campaign Progress Report. Washington D.C.: American Council on Renewable Energy (ACORE). Retrieved August 31, 2020, from https://acore.org/wp-content/uploads/2020/07/Expectations-for-Renewable-Energy-Finance-in-2020-2023.pdf
International Renewable Energy Agency (IRENA). (2020). Renewable Power Generation Costs in 2019. Abu Dhabi: International Renewable Energy Agency (IRENA). Retrieved from https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2020/Jun/IRENA_Power_Generation_Costs_2019.pdf
Project Drawdown. (2020). Drawdown: The Most Comprehensive Plan Ever Proposed to Reverse Global Warming. (P. Hawken, Ed.) New York, New York, United States of America: Penguin Books.
Jennifer G. Gallegos is the Director of Research & Strategy at Yotta Energy, a renewable energy company based in Austin, Texas, that’s reimagining the way the world stores and uses solar energy. As a licensed professional engineer in Texas, she has over 10 years’ experience in project management, commercial building design, sales, and marketing.