24 By 7 Procurement. Corporate renewable energy purchasing is headed to the next phase and it is going to impact ecosystems across the market. Corporates have reached their 100% renewable energy goal and now going to the time matching of procurement and usage. Google Cloud is announcing that they are partnering with AES to buy renewable energy matched to their usage. This is a little fish in a big ocean way to do it but here are two things that will happen next. Data centers will go first, not only those that are exclusive to big corporates, but data centers that are providing services to companies will have to match renewable energy to their consumption in order to retain their customer base. Second, renewable energy generators will have to learn to shape their curve. Imagine having to reengineer the 8760 forecast based on the consumption curve of the off taker. Careful though, missing your production could mean having to go to the market to make up the energy and leave you naked on the hedge.
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May The 4th. May the force of all the regulatory, policy and market tailwinds be with you. EPA is back to protecting the environment from greenhouse gases.
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Capital Deep Dive. There are some important things to note in this deep dive by BNEF about the global capital to project pipeline. The energy transition, centered around the goals pledged to by economies around the world, is going to take north of $50 trillion (with a t) and even then will allow for the allocation of $2-3trillion per year. Their estimates have it at $2.1trillion this year alone. There are three items that I want to highlight and get you to think about. A few years ago, the CEO of an oil major said even if he wanted to invest $10billion into renewables, he wouldn’t find that scale in the market. That has changed and create the inverse problem. Large investors like majors and pension funds are going direct to the pipelines and not looking to trade those assets once they’re in the portfolio. The lack of trading is noted by BNEF and makes the value of platforms higher than ever before (and I note that the value of the platforms used to be less than zero just 5 years ago). Lastly, let’s realize the scale of the capital appetite and what it will take to credibly deploy it for long life assets. That means that not only do the investment platforms need to do the work well, the companies that are hired to build, procure, integrate and maintain those projects are vital to the ecosystem.
And Now You Know. The entire previous paragraph is why companies like FTC Solar are going public, Enphase, Shoals and Array are valued at 100x earnings with Nextracker and Loanpal filing their IPO docs.
ICYMI. I spoke about our role in helping develop the energy storage pipelines across the energy sector in this coverage.
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Does Storage Work? For your project. I had the pleasure of talking to Andy Colthorpe of Energy-Storage.news about the most common question I’ve been getting since joining FlexGen. Asset owners and developers alike are looking for answers on how storage creates revenue upside and capital deployment opportunities on their existing assets, pipeline and future developments. Regardless of the interconnect, storage has a role and a timeframe for the right return on investment. By doing a project feasibility assessment, you identify the target revenue situation and the corresponding capex maximum based on your return requirement with the ability to actually get the project done if the project gets the green light. Thank you to Andy for the article and Solar Builder and Solar Power World for their coverage as well.
The Congressional Address. Good coverage in a variety of publications about climate and how it made the primetime in Biden’s address to Congress. Politico’s Greenwald takes a contrarian view to the climate policy is jobs policy in today’s rundown.
Permits Cost Time Cost Money. It’s been 3 years since I first mentioned the idea of instant permits on this newsletter. While the concept has not changed much, permits take too long and cost too much for the service they provide to homeowners, the reality of instant permits has reached much higher probability and in some jurisdictions, reality. There are a few people, one in particular, that have been relentless advocates for SolarAPP. In due time they will get recognized in a major way on this platform, but everyone involved in residential solar should be paying close attention to how they can help this effort.
Power Up, EPCs. And come ready to learn! The Business PowerSeries from EagleView - moderated by yours truly - has an upcoming webinar on scalability. Remember what happened when Icarus flew too close to the sun? This session will show you how to avoid any sinking missteps and instead scale your business using sustainable strategies. I’ll be joined by JP Gerken, CEO of Zenernet and solar selling extraordinaire. He’ll talk about what it takes to turn a business into one of the largest residential solar companies in the country. Sign up now to save your spot for May 12th!
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