Insight: New Ways to Monetize Energy Storage
Maha Bouzeid, Business Development DirectorGet in touch
Energy storage will be key as global telecom markets transition towards greener and more cost-effective operations. With the rollout of 5G, large numbers of small, energy-consuming cells will be added to the existing networks to ensure that connectivity is never lost. This increases the demand for high-capacity energy storage. And energy storage is evolving. Fast. From being a safety measure, storing backup energy, via peak shaving applications, to Virtual Power Plants (VPP) enabling new revenue streams. But how does all this work? Maha Bouzeid, Business Development Director at Polarium, explains what might sound like something from a science fiction novel – but isn’t.
The Missing Link Between Renewable Energy and Constant Reliability
The journey towards a fossil-free future is reshaping the role of energy storage in the global economy. Across the globe, policymakers, sustainable businesses, and consumers are recognizing the benefits of energy storage, which is also reflected in aggressive market forecasts. This is logical in many ways. The challenge with the two main sources of renewable energy — wind and solar — is that they are intermittent, making energy storage the missing link between renewable energy and constant reliability.
5G is Accelerating the Need of Smart Energy Storage Solutions
The telecom networks of the future needs to be smarter, greener, and more cost-effective. With the rollout of 5G, millions of new nodes will be added to the already expanding network. More small cell sites will be needed in city environments, as high frequency 5G carries more data at gigabit-plus speeds at the expense of coverage and signal penetration. Ranging from industries to cars and refrigerators, critical systems and applications will increasingly depend on always-on connectivity. Therefore, the connected world needs great energy storage solutions.
Rethinking Power Backup
Meanwhile, technical accomplishments and increased energy density enables battery capacity to be used in new ways. Energy storage, for telecom tower sites in particular, has traditionally been an underutilized asset used exclusively for backup during power outages. The energy storage solutions of today can also be used for peak shaving, which improves business cases considerably.
It’s time to take the next step in energy storage and power backup management, converting energy storage solutions to VPPs. These solutions decrease costs and environmental footprint, while enabling potential new possible streams. It might sound too good to be true, but it isn’t.
What is a VPP?
A VPP is a cloud-based distributed power plant that aggregates the capacities of distributed energy resources, including wind and solar power, for power generation.
In the same way that virtual meetings allow companies to gather people from different locations, remotely distributed solar panels and batteries can harness energy and act as virtual power plants. It is simply the orchestration of thousands of dispersed assets to manage the supply of electricity — power that can be redirected back to the grid and distributed to homes and businesses.
The Telecom Sector is a Perfect Case for a VPP
Telecom operators and tower companies already have distributed, nationwide energy assets that could be aggregated, making them perfect cases for VPPs. This would enable businesses to reduce their energy consumption as well as costs. And the timing is perfect, considering that network energy consumption is projected to increase by 150 to 170 percent by 2026, mainly driven by the rollout of 5G.
As of today, prior to the full rollout of 5G, energy cost amounts to 20 to 40 percent of telco’s operating expenditures (OPEX). These costs are also increasing, which is generating a clear need to find new solutions to keep energy costs down.
The Way of the Future
VPPs have the potential to change the energy landscape, by harnessing locally-produced solar and wind power and redistributing it to where it’s needed the most — all facilitated by a cloud-based software that has a full panoramic view. At the same time, those smaller distributed assets – whether it’s solar panels on a residential rooftop or energy storage assets on a tower site – can contribute with more reliability to the power supply, decreasing the need for fossil fuel in the energy mix.
From a user perspective, it enables anyone with energy storage capacity to store and sell energy, turning the energy storage asset into an automatic cost-optimizer and potential revenue stream. This might sound like science fiction, but it’s happening – right here, right now.
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