Now that the energy auction in Spain for 2021 concluded a few weeks ago, the winners of the new capacity to be installed face the challenge of securing the expected return on the investment they are committing to. What looks good in paper will need to be executed swiftly and efficiently with little room for errors. The winning energy firms can execute the projects with the required finesse, but only if they recognize the obstacles and manage their energy portfolios leveraging modern tools.
What emerges is that despite the Spanish Renewable Energy (RE) industry growing at a two-digit pace per annum and creating an attractive business sector for the economy, management of large renewable energy portfolios is still challenging. This fact replicates across the globe.
From the experience along the RE investments in the recent times, complying with the expected investment cost and achieving targeted production are yet a challenge. And the issue tends to rely on management rather than on technology. Capturing economies of scale across portfolios, learning from the performance of our installed capacity when selecting technologies and vendors, optimizing maintenance based on machine learning, leveraging algorithms to fill production gaps, streamlining tedious management and reporting processes are recognized by the industry as untapped opportunities for securing ROI targets. It is evident that modern digital solutions for managing projects have not fully been exploited. At QBI Solutions, we are sharing our expertise because technology-enabled solutions using advanced analytics are definitely the best way to manage energy portfolios.
With the entrance of new players amidst existence of well-known obstacles, we hold that effective management of large renewable energy portfolios is more important now than ever before. Relying on experts like QBI Solutions will be critical for success.
Before we proceed with the discussion on how to manage energy portfolios, what happened at the energy auction in 2021?
Wins for Solar PV, New RE Companies at the Energy Auction
The highlight of Spain’s renewable energy auction solar PV taking the largest percentage of capacity allocated by the government. When the Ministry for the Ecological Transition and the Demographic Challenge (Miteco) released the results towards the end of January, solar PV developers had won total GW on offer.
Also notable at this auction were new entrants into the Spanish market and reduction of number of established players. The overall winner of this year’s auction was Capital Energy with 620MW awarded. X-Elio, Elawan and Iberdrola followed with 315W, 280W and 243MW respectively. Also in the list were Naturgy, Solaria, Garnacha and EDPR among others, as the following table shows.
These companies better brace themselves for the task ahead.
Challenges of Managing Large Energy Portfolios
Whether for new entrants or established players, managing large energy portfolios is not a walk in the park. Some obstacles are attached to technologies, while some emanate from regulatory and policy issues.
All over the world, capital costs cause the most headaches to project managers and proprietors in large projects. Setting up solar and wind technology is expensive, yet this triggers a sense of risk in potential financing institutions. Developers can have a difficult time trying to prove the worthiness of their ventures.
Siting and transmission challenges are also a threat to expansion of solar and wind projects. The decentralized model of most RE sources may offer grid resilience, but siting and transmission are usually treacherous endeavors. Established firms may have already accrued valuable lessons, but for the new entrants, country-specific challenges in this category may hinder and delay project progress.
To site a solar or wind farm, developers need to acquire the necessary permits and contracts. Community relations and negotiations are equally applicable. The ensuing costs and delays can kill major projects.
Power transmission from solar and wind farms poses another hurdle. Conventional transmission systems were built for established sources such as fossil fuels and nuclear power. Since solar and wind farms may not necessarily be sited near these transmissions, the need for new transmission infrastructure can be a big setback for large RE portfolios.
Even in the absence of the above initial obstacles, the unpredictable nature of renewables is a serious problem for investors. To cater for daily consumer energy needs, electricity has to flow continuously. For ages, the balancing act has been about matching power plant output with consumer needs. It is based on a near-accurate balance.
In the case of alternative energy, the operator has no control, so deciding when to switch off or on is difficult. The intermittency of wind and solar is a big hindrance to expansion and management of large renewable energy portfolios.
QBI for Effective Management of Large Energy Portfolios
As experts in RE management for peak performance, QBI solutions supports clients in energy projects to manage energy portfolios. Leveraging on artificial intelligence and big data, we are able to predict solar and wind power performance.
Our solutions are the best answer to the inadequate evaluation of renewable energy project performance. It is possible a large RE project is not operating at its optimum as the initial energy analysis projected. Worse is that you may never discover this shortcoming.
It is not surprising that many operators concentrate on bigger conventional issues like site trips or losses. They never perform a detailed analysis. We do.
QBI Solutions provides leading-edge technology-enabled solutions based on advanced analytics, breaking the silos and making available all the information stored in the different systems of the company, transforming it into a data-driven company. Whether your renewable energy firm needs a basic expense control spreadsheet or the more complicated SCADA/DAS acquisition system, we are on hand to standardize and integrate your different data sources, the result being real control and deep insight into your energy portfolio.
Back to the winners of this year’s energy auction, leveraging seamless digital processes and advanced analytics is the surest bet to beating the competition. Apart from helping garner EBITDA percentage points, the QBI platform is an affordable solution that pays back in record time.
For more on our digital solutions for RE, please contact us.