2019 was a landmark moment for renewable energy. It was the first time in a long time that green energy outpaced coal consumption in the world’s largest economy. Where the latter contributed 20% to US power generation, renewables triumphed with a 23% share. It’s these moments that truly reaffirm my belief and dedication to renewable asset management.
Renewable energy is often called resilient power. I couldn’t agree more with this statement. Renewables have come a long way, in a relatively short period of time.
As someone who has spent his professional career peering at this sector from various lenses, I am in awe of where we are today. As an asset management industry and as preachers of the #GoGreen agenda.
Renewable Asset Management Future Outlook
What does the future look like for renewable energy? Promising, certainly. I might be biased (you think?), but I see exponential growth for clean power and renewable asset management. Catastrophic events around the world, the COVID pandemic for one, are true manifestations of the harm humanity has inflicted on our planet’s natural resources.
Inger Andersen, UN’s environment chief, believes we have put too much pressure on Mother Nature’s resources. To her, climate change and the global health emergency around us is ‘nature sending us a message.’ In the same breath, farsighted experts have begun speculating that post COVID-19, greener, more equal economies will emerge.
Needless to say, this goal can only be achieved if we keep pace with trends in renewable energy asset management. Let’s take a look at some research in green energy trends, shall we?
Top 5 Renewable Energy Asset Management Trends
1. Socially Conscious Millennials
Green energy has often been attributed a band wagon effect. I’m tempted to say it has worked favorably for its demand. As more millennials become environmentally conscious, companies are making a greater effort to appease them.
An excellent example is the campaign to eliminate single-use plastic bags. Took me a few failed trips to the grocery store before I remembered to bring my own reusable bags… But a cause we should definitely get behind.
Now, brands want to resonate with their target market’s ideologies. They want to align their priorities to match the customers’ needs. Hence, such initiatives are aimed at subliminally building momentum for this ‘green’ mindset.
As clean energy paves its path to becomes a primary source of power, the demand for renewable asset management services will spike.
2. Offshore Wind Projects
Scaling offshore wind energy projects is one of the most remarkable trends in the renewable energy market today. Advances in wind turbine technology have given way to substantial cost reductions at wind farms. These factors, coupled with growing investor confidence, contribute to the global investment target of $350 billion in floating wind assets by 2030.
Consequently, large commercial offshore wind projects are already underway in major markets. Case in point: the 84 Turbine Vineyard Wind Project, the first of its kind, is set to add 800-megawatts to the current 25.8GW offshore wind capacity in the US.
Like I always tell my team, with complexity in portfolios comes the need for intelligent renewable asset management. No doubt, offshore wind projects are a decisive step towards a green-dominant energy mix. However, they do come with their own challenges.
Optimized supply chains, improved efficiencies and offshore workers’ skill sets are just some considerations that go into setting up these capital-intensive projects. If wind farm asset managers have the right tools, these challenges can be dealt with better.
Hence, I foresee a definite rise in the demand for cloud-based renewable energy asset management software. Integrated platforms that will let wind energy developers manage their complex portfolios from anywhere, anytime.
3. Storage, Storage, Storage
It wasn’t enough to say it once, nor twice. I had to said again. In fact, I can not reiterate this trend enough. Whenever someone asks me, ‘so what do you think is the next big step for renewable energy?’, I can’t help mentioning the need for perfecting storage. It really is our gateway to a clean energy powered future.
Did you know? A 40MWh storage system in New York has been predicted to save $2.03 million in fossil fuels, and reduce grid congestion by 400 hours. It is these massive, quantifiable benefits that are driving an upward of 40% of growth in renewable energy storage options.
Moreover, the cost of lithium ion batteries saw a sharp dip of 35% in early 2019. This is exactly the motivator our industry needed to keep working towards more efficient power storage.
What’s more? All these developments come on the heels of a rapidly changing climate. Wildfires, hurricanes and rampant floodings have resulted in an average of 142 mins of power outages for an average American.
The solution? Storage, Storage, Storage.
Batteries are treated as a set of independent assets within renewable asset management platforms. Ones that have their own performance and output indicators. Hence, as we future-proof our supply of clean energy, gauging how well storage solutions are working will be a smart next step.
4. Transformational Digital Solutions
As an industry that had a delayed exposure to technology, we talk a lot about prioritizing digitalization. Being a renewable energy asset management company, PowerHub lays great emphasis on going digital.
My colleagues and I have written extensively on how efficient asset management can increase productivity. It reduces time tied up in mundane and repetitive activities. Beginning the digital journey involves digitizing monitoring processes. We then move towards digitalizing access to important data pertaining to renewable energy asset management.
Trust me, the process really reaps tangible benefits. In fact, we see its affects at every step of energy generation and utilization. From tracking demand, supply and usage to the electrification of transport – intelligent software solutions will be the answer.
While we’re at it, I want to mention the importance of having the right data. And then the importance of smartly managing and using this data. The latter is a powerful tool that can streamline renewable asset management by identifying trends and problem areas.
Since intelligent data is a biproduct of digital solutions, ensuring efficient use can help scale green energy projects rapidly.
5. Tax Credit Independence
A friendly tax push has historically been a much-needed incentive for renewable energy. The Investment Tax Credit (ITC) and Production Tax Credit (PTC) for solar and wind, respectively, are two policies that have driven remarkable growth in these sectors.
Similarly, the Green Act of 2019 aimed to extend some of the favorable tax credits and incentives for renewable energy. However, I often question how long these incentives and policies will last? How much stability will they bring?
It’s hard to say. Which is why, the industry is now advocating independence from this historical reliance.
I believe government incentives don’t define us. Our industry is now competitive enough to be considered mainstream. We know that developers previously based their location decisions on state subsidies. Well, they now do so keeping an overarching theme of optimization and profitability in mind.
I love where we’re headed. And don’t get me wrong. incentives are great. And if there are a few that help us get some extra hundred GWs into the ground, even better. Renewables will soar – it’s only a matter of time.
Are You Keeping Up with These Trends?
It’s safe to say that renewables are in it for the long haul – unlike non-green fuel. Word has it that state regulators are now thinking twice before placing large-scale investment bids in fossil fuels. Why so? I’d say the reasons are obvious – coal is retiring, and gas is aging.
Declining costs, and the maturation of renewable asset management have poised this sector for growth. Soon enough, the pull from the environmentally conscious will be overwhelming. Thus, leading to immense innovation and collaboration within various factions of green power.
As an asset manager or a renewable energy asset management company, it’s worthwhile to keep pace with these changes. Let’s account for them in every business decision we make.