Explaining the importance of distributed energy now

AMPYR Distributed Energy (ADE) CEO, John Behan, delves into the crucial role that distributed energy and private finance will play in shaping the energy landscape of the future as energy resilience takes centre stage in government policies.

The dynamic energy sector is undergoing rapid transformation, where the imperative to decarbonise is driven by a blend of commercial interests and regulatory requirements. The urgency is not just about costs but also revolves around managing supply risks and creating sustained certainty in a rapidly evolving market. The increasing push towards sustainability from various stakeholders has shifted the discourse from merely adopting best practices to a ‘do or get left behind’ scenario.

Energy Secretary Ed Milliband asserts that safeguarding the nation’s long-term interests necessitates the delivery of cleaner, more affordable, domestically sourced energy. This shift would enhance energy independence, foster job creation, and combat the pressing issue of climate change. As we veer away from traditional large-scale centralized energy generation towards a more diversified decentralized model, distributed energy emerges as a pivotal player in this evolving landscape.

So, what exactly is distributed energy, and how does it tackle concerns relating to resilience, supply security, compliance, and decarbonisation? Why is it deemed a game-changer in a swiftly evolving energy framework now charged with an unprecedented sense of urgency towards decarbonisation?

Distributed energy entails generating power onsite or in proximity to the point of consumption. This includes installations like rooftop or ground-mounted solar panels, wind turbines, and battery storage solutions. Such resources promise to significantly shape the future energy landscape by bolstering system reliability, cutting overall energy expenses, and reducing transmission losses. Moreover, deploying energy generation close to the point of use curtails the necessity for extensive grid upgrades while facilitating the rapid integration of renewable energy sources.

Businesses are now swiftly transitioning towards decarbonisation and striving towards achieving net-zero targets, elevating this pursuit to a top-level corporate agenda. Amidst erratic energy prices, escalating rents, supply chain disruptions, and soaring inflation rates, enterprises are seeking sustainable, financed solutions to streamline their financial structures.

Recent policy amendments have removed planning constraints for flat roofs and lifted the 1MW cap for industrial rooftop solar, easing planning obstacles for solar canopies on parking lots. With the government keen on expediting the uptake of greener energy options and electrifying the grid, emphasising a threefold increase in solar adoption by 2030 has propelled the viability of onsite generation to the forefront for businesses seeking decarbonisation. The newfound feasibility of achieving this without upfront expenses could be a transformational breakthrough.

Distributed energy embodies numerous business-critical benefits. It not only aids in slashing energy expenses, at times by up to 50%, and reducing carbon footprints but also fortifies business resilience by lessening dependence on centralised energy sources. Through Power Purchase Agreements (PPAs), renewable energy technologies can be effortlessly installed by providers and supplied to customers at a cost-effective fixed rate. What’s more, these advantages can be reaped almost instantly.

Businesses poised to capitalise on rooftop space are best positioned to leverage rooftop solar, the swiftly expanding and most accessible form of onsite energy generation. Sectors with substantial energy consumption, such as industrial hubs and warehousing facilities, hold immense opportunities for onsite energy generation.

A diverse range of businesses, spanning from sports stadiums and conference venues to distribution centres and factories, are eager to harness the benefits of onsite generation. Primary concerns invariably revolve around costs and risks. When funded via the PPA framework, upfront costs are eliminated, rendering the adoption of renewable energy technologies more attainable for many.

The warehousing sector, currently experiencing exponential growth, has identifiably seized upon the solar energy potential. The UK Warehousing Association’s research underscores the vast roof space within UK warehouse facilities, capable of accommodating up to 15GW of new solar installations, thereby doubling the nation’s solar PV capacity.

Rooftop solar installations in the UK’s top 20% largest warehouses offer 75 million square metres of roof space, obviating the necessity for developing new land equivalent to the size of 500,000 homes. Envisioned to slash energy costs by 40-80%, rooftop solar PV setups have the potential to collectively save the industry £3 billion annually.

Furthermore, energy-intensive sectors like data centres are pivoting towards renewable energy to align their operations with sustainable practices amidst mounting pressure to embrace environmental stewardship.

Overcoming risks associated with the transition to distributed energy may appear daunting for many businesses, given the myriad challenges related to grid connections, capacity, returns, pricing structures, and liabilities.

Nonetheless, the deployment models for distributed energy have been thoroughly trialled and proven globally. AMPYR Distributed Energy (ADE) boasts an initial funding reserve of £100 million for projects across the UK and Europe. This means that businesses can access both the expertise and capital needed to implement a tailored system without incurring upfront costs.

Ensuring that renewable energy installations are not a liability entails partnering with entities that go beyond mere acquisition and installation of assets, focusing on driving optimal performance and value year after year.

Effectively harnessed onsite generation can lead to cost savings, bolstered energy security, enhanced business competitiveness, and assured compliance, culminating in a collective quest for a sustainable and prosperous future for all.

For further insights into the accessibility of distributed energy systems in the UK, visit www.ampyrde.com

This article was originally featured in the October 2024 edition of Energy Manager magazine. Subscribe here.