[ project development ]
Business case A second risk concerns the uncertain business case for energy storage . The market needs the right price incentives . At the moment , it can still be the case that charging your car at night is cheaper than during the day , while charging when the sun is shining is the best time for the system . The government needs to play a guiding role here to support the best system solution . There are sufficient policy instruments for the production of sustainable energy , of which the SDE ++ is the best known . This provides a guaranteed business case at a time when market prices for renewable energy are too low . No such instrument exists for energy storage , which means that the business case has a greater risk if revenues are disappointing .
The complexity of the energy storage market is also a risk , especially for incoming cash flows , which are difficult to predict . In addition to buying at a low price and selling at a higher price , there are other revenue models . These include reducing grid connections , providing grid balancing or congestion management services , and providing back-up / emergency power services . It is important to stack these models cleverly in order to be able to draw up a balanced business case .
Development risks Finally , energy storage projects are subject to the ‘ normal ’ development risks . These include the risks of whether or not to obtain a permit , but also agreements with energy companies regarding the connection to local energy networks . With regard to the technological risk , investors naturally look at the core technology of the storage method . In the case of hydrogen , this concerns the electrolyser . The preference is usually for proven technology . This does not always benefit the transition because promising new technologies are then applied less quickly and less frequently .
Although not directly related to the technology in question , the risks associated with the construction and / or operation of the storage facility are also important . These are mainly risks related to construction planning and budget control . Ultimately , this risk revolves around the question of whether the frequency of maintenance – and the associated budget – is appropriate to the technological specifications of the storage system . If more maintenance is required due to quality issues , this will have a direct impact on cash flows . The same applies to cost overruns due to insufficient budgets . It is therefore important to have a clear picture of the entire lifecycle of the project and to apply a healthy risk margin in terms of time and money . And it is precisely this aspect that is not always clear with new , unproven technologies . Here too , combining generation and storage forms can offer a solution so that the risk of innovative forms can be covered by proven technologies .
About Sweco
Sweco is a leading European architecture and engineering consultancy . Together with our clients and the collective knowledge of our 18,000 architects , engineers and other specialists , we co-create solutions that address urbanisation , capture the power of digitalisation , and make our societies more sustainable . We offer our clients the combination of global expertise and local understanding of their business and context . Our ambition is to be our clients ’ most relevant partner and we aim to solve any challenge , no matter the scale or location . Our work with sustainable buildings , efficient infrastructure and access to electricity and clean water promotes sustainable development . In close collaboration with our clients , we conduct more than 100,000 projects every year , and sustainability is at the heart of every single one of them .
Hydrogen Tech World | Issue 7 | December 2022 23