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Community Microgrids – the hard return on soft factors

A microgrid is a complex technical system. Good technical engineering is of great importance in developing a project as well as financial engineering. After all, financing methods and interpretation of the proposition (buying, renting or a PPA) determine the feasibility of funding. These are the main hard factors of executing developing a facility on land. Yet the success is also determined by soft factors. As WES we have experienced this many times, we have learned the hard way, that the soft elements are most crucial in such a process. That is why we like to share our insights into the hard return on handling the soft factors right.

Soft aspects of project development

No news but very important, to check showstoppers from stakeholders in advance. The environment and politics have a major influence on building utilities on plots of land. When an idea for a microgrid arises, coordination is crucial. This can be done by pitching ready-to-implement plans, but even better is co-creating a solution with all stakeholders which creates support by common interest.

When the environment is involved in the realization, this accelerates in the execution. The investment in communicating all participable information, enthusiasm and involvement is the best investment that can be made!

Soft aspects of the technical design

One of the challenges one meets in realising a microgrid is balancing energy supply and demand. Proper balancing eliminates the need for costly energy-storage components.

With most renewable energy sources it’s not possible to regulate the energy supply. What can be done is adjusting the electrical load. Most ‘measures’ are determined to steer the demand, a few examples are: planning showering time, washing, turning down the heat or air conditioning, closing doors and windows etcetera. In reality this never happens when imposed. Influencing habits, patterns and culture is very difficult. Whilst reforms cannot be imposed from the outside, they can be encouraged.

When people themselves come up with measures and are free to make their own choices it’s a whole other story. Especially when results are clear to users, you can rely on the advantages of social control. People will check one another and encourage each other in compliance.

 

Soft aspects of financing

A microgrid requires a long term investment and will be recouped in a number of years. The initial investment often is a threshold in budget but also in a psychological sense. Communities and the individual members do not dare to spare such large financial assets. It’s important to design economic solutions that fits the client. Paying for usage instead of possession, that is an important one. There are many investors who would love to invest in reliable energy utilities, where trustworthy users pay lease for electricity in return. This does not actually change the cost, but an important barrier, the high initial investment cost falls away. This eliminates the tense pressure of choice (what do I have to choose / do I have to choose now?), which is a very logical consequence but often crippling. In addition, the freedom to scale up the facilities is important for investors as well, as is the possibility to connect other new (renewable) energy-sources in the future.

 

The conclusion of naming and removing soft factors is important and works

At WES soft factors are a key in developing our projects. Financial and technical engineering are the backbone, but the soft factors make it a real solution. By paying a lot of attention to this, we are experiencing the acceptance of solutions. By involving all stakeholders and co-create our solution we have saved a lot of money in both the development phase and the phase of use.

 


Want to know more about how to deal with these soft factors? Request our checklist via info@windenergysoluitions.nl

BLOG 210912 – Feed In – Italy

Wind in Italy: A Window of Opportunity

A beautiful country well known for its automotive and design industry, a land with great industrial tradition, of course we are talking about Italy.

What is underexposed is Italy’s commitment to develop renewable energy projects. There have been many renewable initiatives over the last decades, whereof most of them relate to solar pv projects. Solar energy production covered for almost 10% of Italy’s total energy consumption in 2016, making Italy the country with the highest contribution from solar energy in the world. In 2016, 17.4% of all Italian electric energy consumption was covered by renewable energy. This makes Italy one of the highest scoring countries in Western Europa considering the use of renewable energy.

Wind Energy

Next to solar pv, another established form of renewable energy in Italy is wind energy. Due to a Feed In Tariff from the Italian government many projects have started in the period between 2002 and 2017. After the incentive period expired at the end of last year many of the installed wind energy projects still run successful but a number of Italian wind projects did not perform as expected. This has resulted in the painful discovery that some of the turbines did not perform well and often came to a standstill. The main reason for this to happen is that the mass of the turbine owners did not had enough knowledge about wind turbines. On the other hand, some of the projects that were installed years ago were not properly audited by that time, hence they wore out very quickly.

Obsolete projects

The current situation for most of the turbine owners is that their turbines are not performing well and therefore not generate electricity nor money. Knowing for a fact that the duration of the Feed In Tariffs is still applicable on their projects, the turbine owners have to decide what to do with their land and their turbines. However, in most cases the turbine owners cannot invest any more money in the stagnated wind projects…..

At WES we want to help the Italian turbine owners because in many situations there is still a good business case to (re)start the wind turbines and producing money again. We are willing to invest in obsolete projects to regenerate what has come to be a disappointment.

Retrofit

WES offers to enter into a partnership with the current turbine owners providing a Retrofit turbine and a stable future income for the current landowners. WES will buy-out the current owners, take over the wind turbine project and become operator of the project. Besides the buy-out of the project WES will pay a land lease fee to the landowners on who’s land the turbines are located.

To regenerate the ever so beautiful Italian wind turbines we want to get in touch with the current turbine owners. Do you own or know any obsolete wind turbines in Italy that should once again generate renewable energy? For every wind turbine project you inform us of that is suitable for replacement WES is rewarding a finder’s fee ‘reward’ of 5.000 Euro.

Future prognosis

Probably a new Feed In Tariff will brought into force by the Italian government in the near future. The government wants to stimulate wind energy projects to accelerate the share of renewable energy penetration in Italy. Together we will achieve to reach the targets that are set for bringing back the carbon emissions and provide more people with renewable energy.

Author: Maarten Deutekom, Project Developer at Wind Energy Solutions

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Why and How Microgrids prevent ‘the big hidden losses’

In the last few years we faced extreme weather conditions and a growing number of storms and hurricanes. This change has a big impact on ‘daily life’ and more specifically, the energy supply. The number of grid failures is growing and a big group of experts is developing solutions. One solution is using microgrids for the energy supply. They have many advantages but a very important advantage is often underexposed : Microgrids prevent big hidden losses.

Reaching the consumers energy demand with the use of a micro-grid, which utilizes a fitting combination of renewables (e.g. wind and solar energy), contributes immensely to a healthier climate, because the emission of harmful substances is drastically reduced. This however, is only the first major advantage. Through the use of microgrids, the overall stability of energy delivery can be increased, and in part because of this, the financial benefits of microgrids are substantial, much more so than expected.

During the development of a micro grid, the CAPEX and the OPEX are always taken into account. The question that is (understandably) asked, is as follows: “What are the final costs per kW/h in the new situation, and what advantages does this give compared to the current situation?” In many of these cost-benefit calculations however, many hidden costs are unaccounted for.

For an example, one only needs to look at the consequences of hurricanes. In the past, lots of energy networks completely shut down as a result of these natural disasters. Each energy network was responsible for delivering energy to many users. When even a single one of those energy networks goes down, everything that is connected to it is suddenly cut off, leaving many businesses and a large portion of the population without electricity. All the food in fridges will quickly spoil, the cost of all that food suddenly gone to waste, and that is just an example for consumers.

Businesses that rely on heavy equipment, or computers and databases? losing power is a disaster for the daily operation. This will lead to many inconveniences, waste of resources and huge losses in profit. This is most certainly annoying and expensive, but even more importantly, it is dangerous. Factories and other essential installations, such as water treatment plants, rely on electricity for a major part of their duties and processes. When the power is suddenly cut off, these essential installations suddenly stop working, which can quickly make an already dire situation even worse. That is not to even mention the rate at which things can be rebuilt, which will almost certainly decrease in the absence of electricity.

A Factory will face a big loss if there is no power. The loss of production volume, employees that can’t work but have to be paid, customers that unexpectedly do not get their goods, etc.

All of these problems can be abated or even outright avoided with micro grids. They are set up in such a way that they can immediately solve the power outage, and the renewable components can be replaced or used again almost immediately after the storm passes.

We are always moving forward, and the solutions to the problems mentioned above have already been realised. Switching from a large energy network to a microgrid is a big step, but the benefits are undeniable. The food of thousands of consumers spoiling is wasteful, especially when it can be so easily avoided. A resort unable to host guests because of a slow rebuilding process and energy supply is expensive, especially since there is such a simple solution. A hospital whose equipment cannot function without electricity is dangerous, especially because there is such a safer and straightforward solution.

Do you want to know what your hidden losses will be in case of a grid failure? We have a model that gives insights regarding the hidden costs. These insights will help you to understand the risk and cost of hidden losses and the value of a microgrid for your situation!

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WES attending Wind fair Hamburg