Seizing the silver lining of ongoing oil price volatility

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Oil markets are entering an “unprecedented period of uncertainty,” Faith Birol, the executive director of the International Energy Agency (IEA), warned earlier this month as Brent crude tumbled by more than 4%.

This ongoing volatility is a troublesome grey cloud for UK companies planning ongoing costs. Many are therefore seeking the silver lining by looking for new ways to shelter from energy price uncertainty and protect their bottom line.

This provides an opportunity for clean technology developers to install solar or wind generation and energy storage systems onsite. These installations enable companies to avoid energy market volatility, better manage costs and reduce their carbon footprint.

Coupling onsite renewable energy generation with an energy storage system enables developers to maximise the value for businesses. The benefits of batteries are two-fold:

  1. Electricity can be bought from the grid at cheap off-peak times, stored in the battery and released when the sun isn’t shining or the wind isn’t blowing.
  2. The self-generated clean electricity from the onsite renewable generation technology can be stored and then sold at a premium during premium peak hours, or consumed onsite avoiding high import costs.

Developers can partner with expert investors to get flexible funding and remove financial risk for host businesses. For instance, earlier this year, sustainable energy investor, Thrive Renewables, launched a joint venture with Aura Power to offer thousands of UK businesses the chance to use energy storage systems to at no cost to themselves.

Matthew Clayton, managing director at Thrive Renewables

Matthew Clayton, managing director at Thrive Renewables, said: “Smaller-scale private wire renewable energy systems and battery storage technology solutions offer such significant benefits to host businesses that they can be operated successfully without subsidies. Price volatility is not good for energy consumers or producers. Onsite renewables can offer more certainty and enable businesses to significantly reduce their impact on the environment.”

At Triodos Bank, we recently supported a hydro-electric scheme developed by long-standing customer Barn Energy, which utilises batteries and a private wire to a neighbouring flour mill.

Specialist, values-driven financiers can also provide expert guidance and project manage the whole process, allowing hosts to focus their human and capital resources on core business whilst providing a strong business-case for companies looking to protect their bottom line and reduce their carbon footprint.

Macro-economic events that continue to drive uncertainty in the energy market are certainly forming a grey cloud for those looking to manage their energy costs. But there is a silver lining: it’s the perfect time for renewable energy developers and specialist investors to join forces to provide increasing value to private wire customers.

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