How a Plummeting LCOE Drives Digitalization?
02 December 2020
Solar Quality 2020, organized by Solar Power Europe, in collaboration with Solar Trade Association, gave experts a platform to discuss the evolving market trends in one of the most cost-competitive industries. Solar Energy. The panelists included industry experts who shared their insights on building sustainable business models and here are our key takeaways from the event.
Industry Ushering towards a Subsidy-Free Era
According to IEA, the cost of solar has been reduced from 38 cents USD/kWh in 2010 to less than 6.8 cents USD/kWh today. For years, governments have encouraged the development of renewable through subsidies, tax breaks, or mandates. As more and more plants reach grid parity, governments’ support has been slowly reducing these provisions and the industry is slowly moving into a subsidy-free era.
Given these circumstances, the experts present at the event, voiced their opinions on the increasing urgency to adopt new business models and strategies to ‘squeeze LCOE to the bones’ helping to further increase the adoption of solar and renewables worldwide.
A Wind of Change for Renewables
As guaranteed revenues based on feed-in tariffs being no longer the norm, the asset owners now opt for different strategies such as diversifying revenue streams (PPA, merchant vendors, or ancillary services), diversifying portfolios – storage, off-grid, micro-grid, wind – or reaching for economies of scale through concentration or external growth strategies.
As a result, portfolios are getting more diversified and complex to manage than ever before. This is a very challenging situation for renewable asset owners and operators.
Change in the Role of Asset Owners
It was widely agreed that the operational stage of the plant’s life cycle takes the lion’s share of value creation for renewable assets. But as costs are being slashed, plants’ maintainability is being compromised affecting the plant’s true revenue potential. This complexity in turn makes the asset managers’ job more challenging. So, what do the experts suggest?
The need for proactive communication between all the stakeholders was one of the recommendations supported by many experts. Asset managers are now expected to bring in their opinions at the early stages of the plant’s lifecycle: plant layout, choice of components, management of warranties to optimize return on investment, etc.
An increased involvement could greatly help in increasing maintainability levels for the development of plants in the future. But one may wonder about the existing portfolios! How could one manage the increased complexities? Many experts voiced about the adoption of digital technologies, in a bid to cope with the changes.
Digitalization – the inevitable
Panel discussion experts at Solar Quality 2020 agreed on the fact that digitalization was a strategic lever to pull to help further reduce LCOE whilst preserving the financial health of renewable service providers. What does this entail?
Emphasis was laid on the digitalization of O&M activities as one of the solutions for reducing costs of running day-to-day activities. Claiming the renewable energy industry to be under ‘intelligent transformation’, Ivan Ivanov from Huawei, recommended the implementation of digital tools such as IoT, AI, and cloud-computing tools among other digital technologies to optimize performance and efficiency, and eventually reduce costs.
It was highlighted how the identification of prominent data and its analysis can help in predictive maintenance leading to efficient risk mitigation. Digital twins, with the help of learned production, can predict plants’ performance more accurately than yield calculations done at the plant designing stage. Ali Rahmati from Fronius pointed out that good quality reliable data helps in emitting technical errors, minimize downtimes, and increase plant performance.
You don’t know what to do with your data?
A proper data monitoring & analytical system can help you boost your plants’ performance. And with QOS Energy’s all-in-one renewable data analytics platform Qantum®, you can collect and clean data from any renewable plant, data acquisition system (SCADA, data loggers, databases), and third-party services. Designed for asset owners, O&M service providers, and asset managers, Qantum® is compatible with a large variety of integrations and plug-ins allowing you to gather third-party data in a single data hub and build your global performance strategy using accurate and insightful data analytics.
Check out more news here!
