John Egbuta, Altenex Energy’s Onsite Solar & Energy Storage Advisor, discusses the European renewables landscape against the backdrop of an energy crisis, geopolitical unrest, and growing corporate demand.
Call it the perfect storm. There was the colder than average winter across Europe in 2021, insufficient supply to meet heightened energy demand, and businesses and factories reopening after a two-year hiatus due to Covid. This resulted in a spike in electricity demand and, simultaneously, increased demand for gas, leading to the highest prices for gas and electricity that Europe has ever seen.
The confluence of these factors has led to a major uptick in corporates seeking to meet their energy demand with clean energy technologies. Earlier this month, the European Parliament voted to raise the share of renewables in the EU’s final energy consumption to 45 percent by 2030, under the revision of the Renewable Energy Directive (RED) – a target also backed by the European Commission under its “RepowerEU” package.
The move is aimed at accelerating Europe’s shift from Russian fossil fuels following the invasion of Ukraine.
Europe’s energy landscape is ripe for renewable energy growth, particularly onsite solutions like solar paired with battery storage, according to John Egbuta, an Onsite Solar & Energy Storage Advisor at global energy advisory firm Altenex Energy, based in Utrecht, the Netherlands.
Egbuta says client interest in onsite solar has ramped significantly over the last several months due to the war in Ukraine.
“As a result of the pressures we are facing in Europe due to the conflict in Ukraine, we now have an appetite from various clients and entities to continue to increase their access to renewables,” Egbuta said. “They want to diversify their decarbonization pathways beyond the “vanilla” type of strategy involving Environmental Attribute Certificates by investing in onsite renewables either via direct leasing or ownership or, in many cases, the onsite PPA option. We are increasing our efforts and capabilities to meet the growing demand for onsite solar and battery energy storage because it’s the new path that most companies are now going to pursue in order to express a visible commitment to powering their sites with renewable energy.”
As Europe seeks to wean itself from Russian oil, many companies are seeking onsite options to supplement the renewable energy mix across Europe to help meet their behind the meter needs as opportunities evolve and grow.
“When you track the journey towards renewable procurement, onsite solar is usually relegated to a very small percentage of what can be achieved because of land constraints and other technical feasibility barriers,” Egbuta said. “But we are in a place right now where we can’t answer the difficult energy procurement questions easily without telling clients to just reduce their demand. If you’re going to reduce your demand just through energy optimization, the only viable pathway to do that would be the deployment of onsite solar and battery energy storage because it means you can meet demand much more quickly, reduce grid dependency, and avoid costs.”
As the energy crisis rages on, European countries, including Germany, France, and the Netherlands, have updated their climate targets, while the EU has set itself a binding target of achieving climate neutrality by 2050.
“Using Germany as an indicator, there has to be an accelerated growth to deploy renewables; the risk of failing to take this opportunity now will have significant repercussions,” Egbuta said. “As western Europe militarizes, part of the militarization effort is energy security, which is shedding any dependency on Russian natural gas and filling that gap with resilient renewable energy solutions–offshore, onshore, onsite and near-site.”
Egbuta will be helping clients successfully grow their European portfolios with onsite solutions like solar and battery storage as a way to stabilize the grid, manage congestion, and respond more quickly to energy demand.
“A few of our clients, especially in the data center and manufacturing environments, are quite enthusiastic about onsite solutions,” he said. “It’s the one piece that I believe we can pursue for clients that have significant load and are looking to execute an effective behind the meter energy management strategy. If they have significant load across Europe, we should be targeting at least five percent for onsite solar and even storage where possible.”
For clients that operate in jurisdictions where there is a mature or developing capacity market, frequency response programs, spot market volatility, and negative pricing, Egbuta notes that promising prospects exist for accessing new revenue mechanisms if they install solar and storage hybrid projects.
The global energy storage market is projected to grow from nearly $11 billion in 2022 to $31.20 billion by 2029, requiring investments of more than $262 billion in energy storage over the next 10 years. According to a recent analysis from BNEF, energy storage installations worldwide could reach a cumulative 358 GW by 2030.
“A major part of why I’m excited is because we are at the onset of the energy storage revolution, and we will see the rise of new products, particularly the hybrid PPA in key markets like the UK, Germany, Spain, and the Netherlands,” Egbuta said. “There are quite a few players trying to push the battery storage solution. That, hybridized with onsite solar or with any other onsite-type deployable system–that solution is coming closer to the facility. You now have modular systems that you can deploy, and they can meet demand much more quickly. That’s why I was enthusiastic about the role when it was presented to me. We are at the beginning of this, and I thought, ‘I could be part of a major change.’”
These systems can be part of a demand response program, a frequency response program, and can help manage the particularly problematic characteristics of grid function on the supply side.
“If you use the UK as an indicator, you’ll see all the target dates have compressed timelines to achieve rapid decarbonization, so I am enthusiastic and hopeful,” Egbuta said. “A Europe that doesn’t evolve quickly enough to respond to what is happening right now will suffer. Everybody needs to reduce costs. It will take time, but there will be an increased buildup. I am enthusiastic about what it means from a decarbonization perspective.”
If you would like to learn more about John Egbuta, or have a question about his work with Altenex Energy, connect with him on LinkedIn!