Assessing Viability UK's Unproven Renewable Co-location Business Models

23 Feb, 2024

Assessing Viability UK's Unproven Renewable Co-location Business Models

There's a notable obstacle hindering the progression of interconnections for renewables, prompting a search for alternatives, particularly faster grid storage solutions. Thomas Horgan, GE Vernova's systems engineering manager, emphasized the urgency for enhanced grid storage during the Energy Storage Summit 2024 in London, highlighting co-location's potential for energy storage and solar projects.

During the panel discussion titled "Where are the Commercial Opportunities for Co-Location?", speakers, including Horgan, emphasized co-location as a potential remedy for grid bottlenecks and capacity shortages, acknowledging storage's role in stabilizing grid networks amidst increasing renewables penetration.

However, despite the recognized benefits, Rupert Newland, CEO of Arenko Group, noted the absence of a proven commercial model for co-located projects due to inherent disparities between solar/wind and battery energy storage systems (BESS). These differences encompass technologies, supply chains, financing models, and technical parameters.

Arenko's initiation of a co-located solar-plus-storage project in the UK signifies progress, yet Newland stressed the need for a comprehensive understanding of co-location's commercial viability. The declining prices of BESS and solar modules are anticipated to enhance the feasibility of co-located projects, potentially surpassing standalone assets in value, contingent upon various factors aligning effectively.

Newland highlighted the superior output quality of co-located sites, emphasizing the ability to tailor output according to market conditions. Ultimately, the value proposition of co-location hinges on market signals and regulatory frameworks, underscoring the necessity for thorough project assessments and strategic alignment.