From macro-level coverage, provide chain and finance talks right down to co-location, fireplace security and microgrids, it was thrilling to see stakeholders from throughout Asia and past come collectively to deal with all of them.
It was fascinating to see that lots of the questions going through nascent or rising markets in Asia are the identical as these we noticed a number of years in the past within the earlier days of the maturing US and European markets.
Those self same questions embrace: how you can make banks snug with financing storage property, how you can alert policymakers to place comparable efforts into selling storage as they’ve performed with renewable vitality, and how you can safe the enough volumes of batteries and different gear wanted to ‘deploy, deploy, deploy!’
Different questions are extra particular to the area, and naturally, Asia is a really large area with extraordinarily diverse geographic – and maybe extra importantly – market and regulatory profiles, that means many country-specific questions nonetheless have to be tackled.
We look ahead to seeing everybody at subsequent 12 months’s version, and hope to see many extra new faces there, however for now, listed below are among the large takeaways from Power Storage Summit Asia 2023.
Fixing the vitality trilemma
Power storage has the distinctive functionality to assist remedy the vitality trilemma that faces Asia, balancing out reliability, sustainability and affordability of vitality provide, as panellist Nicolas Leong of Wärtsilä identified.
In a dialogue on the position of vitality storage techniques (ESS) in strengthening Asia’s electrical energy grids, Leong, north and southeast Asia director for Wärtsilä’s vitality enterprise, stated that the vitality transition is a “marathon, not a dash”. Nonetheless, confronted with worsening local weather crises and hovering or risky vitality prices, the tempo of working must speed up.
Prior to now, everybody talked about grids when it comes to how a lot vitality era capability is on them, whereas as we speak, with the rise of variable renewable vitality (VRE), the important thing query is “how versatile is your grid?”, Leong stated.
“Storage is right here to remain, it would proceed to enhance, and I actually suppose it would assist remedy the trilemma we face,” Leong stated.
Storage can carry sustainability to the grid by integrating variable or intermittent renewable era, and it could actually allow reliability too, significantly with know-how suppliers and system integrators providing longer and long run ensures for challenge homeowners.
It’s within the space of affordability the place challenges stay, significantly for among the much less rich nations in Asia, Leong stated, whereas noting that the trade is dedicated to fixing that facet of procurement and deployment.
Replicating fashions from different nations
One theme that got here up time and time once more, is that financing vitality storage tasks requires bankability not simply of know-how, however of enterprise fashions. Meaning having the ability to present a level of certainty over revenues. Many nations in Asia will not be fairly there but.
Throughout the Asia-Pacific area, after China and maybe South Korea, essentially the most mature marketplace for standalone battery vitality storage system (BESS) applied sciences is Australia.
That market has grown shortly as a result of large energy mills and retailers like AGL have supplied long-term contracts for capability or grid providers to builders in some instances. In different instances, the extent of service provider alternative by means of the Australian Nationwide Electrical energy Market (NEM) for frequency management ancillary providers (FCAS) and arbitrage are sufficient to entice buyers.
And, as we’ve seen in lots of different markets world wide, financing battery storage is extra complicated than photo voltaic PV and wind, for which fastened income fashions have been round for years. Financiers from Customary Chartered Financial institution and debt financing platform Pentagreen Capital each stated that money move certainties are fascinating, however nonetheless being found out.
In the meantime merely porting over enterprise fashions from different nations, nevertheless profitable they might have been, received’t be straightforward if going from Australia, to Southeast Asia, for instance.
The excellent news is that some nations like India and Japan are at numerous levels of rolling out supportive frameworks to include vitality storage into the ability sector. It’s a trickier query within the ASEAN markets, the place laws are largely but to alter, apart from the Philippines, though renewable vitality and internet zero targets throughout the area will drive an inevitable want for storage.
ASEAN regulators have embraced renewable vitality however not but vitality storage
We heard on the opening day’s first panel that nations within the ASEAN area have come a great distance of their adoption of renewable vitality, however are but to increase that embrace to vitality storage.
Beni Suryadi of the ASEAN Centre for Power intergovernmental affiliation stated a “lack of involvement” by regulators in discussions about vitality storage is the most important problem going through the know-how within the area’s 10 nations.
Suryadi supplied the instance of Vietnam, the place photo voltaic PV has been deployed at a speedy tempo. But it’s tough to search out any severe dialogue of vitality storage within the nation, he stated.
Nonetheless, the place “ache factors” on the grid may be discovered, the necessity for vitality storage shall be most important, Georg Garabandic, DNV’s vitality storage lead for the APAC area stated in a later panel session. Contracting for providers from storage techniques to unravel these ache factors could be a robust method to stimulate funding, Garabandic stated.
Provide chain challenges require sharing of dangers to mitigate
The vitality storage trade has turn into a “sufferer of its personal success”, in addition to of the success of the electrical automobile (EV) trade, making provide chain administration ever tougher.
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Talking on a panel about provide chain challenges, Mahdi Behrengrad, head of vitality storage at Japanese renewables developer Pacifico Power, stated that for reaching the “internet zero dream,” investing in battery storage requires a brand new type of threat urge for food.
Meaning all stakeholders should “do their homework” to mitigate dangers so far as potential, for instance, builders ought to have a number of distributors they will flip to, Behrangrad stated. On the identical time, buyers and lenders shouldn’t be BESS as a “typical funding”.
Fellow panellist Le Xu, industrial supervisor at Aquila Clear Power Asia-Pacific (ACES APAC), famous that batteries signify round 40% to 50% of the gear price of a grid-scale battery vitality storage system (BESS) asset. Meaning the squeeze on provide is felt much more acutely than it might be when speaking about photo voltaic modules for a PV plant, Xu stated.
Co-location allows mixing of finance
Banks sometimes need to tackle lower than 30% service provider threat when lending to a clear vitality challenge, in accordance with Kiran Jethwa, managing companion at asset administration group Fumase.
Talking on a panel about co-location of vitality storage with era property, Jethwa stated Fumase usually mitigates service provider threat by allocating a specific amount of capability to energy buy agreements (PPAs), providing lenders a blended finance possibility.
What was fascinating to listen to was that whereas batteries can provide excessive returns from service provider alternatives, but in addition carry a threat in that there is no such thing as a long-term certainty over revenues, photo voltaic PV and wind provide steady, long-term, however usually decrease returns.
Lenders like long-term certainty in money flows, MUFG’s deputy head of challenge finance Shilei Huang stated. In Asia, it is vitally typical to see fastened tariff long-term PPAs for standalone photo voltaic PV tasks. Including a battery system brings in a number of income streams, a few of which might be contracted for and others service provider.
Even when revenues from long-term contracts become decrease than these earned from service provider market participation, having as a lot contracted income within the combine as potential helps make sure the viability of tasks on a long-term foundation, MUFG’s Huang stated.
Different themes, subjects and speaking factors
There have been loads of different topics of debate on the occasion, a few of which had been as follows:
Industrial decarbonisation
Trade may turn into a major supply of buyer demand for vitality storage in Asia. Two key examples cited had been the expansion of round the clock (RTC) 24/7 renewable vitality offers signed by industrial entities in India, and the potential for vitality storage-integrated microgrids at off-grid or distant mining websites in Indonesia.
ASEAN grid
The prospects for an interconnected electrical grid serving the ASEAN area had been talked about a number of instances, with vitality storage more likely to play a key position in enabling renewable vitality generated in locations with plentiful land and photo voltaic sources capable of feed energy to extra closely urbanised and land constrained locations comparable to Singapore, the host nation for Power Storage Summit Asia 2023. An ASEAN grid may unlock about 70GW of cross-border connections.
The place will the most important markets be in Asia?
A ballot of the viewers taken by organisers discovered that Australia was anticipated by attendees to be the nation with essentially the most fascinating vitality storage market within the close to future. Additionally outstanding had been India, the Philippines, Japan, Indonesia, China and Malaysia.
‘Want and can for larger storage deployment and funding’
“The summit demonstrated there’s the necessity and can for larger vitality storage deployment and funding all through the Asia-Pacific area,” summit producer Moses Makin at Photo voltaic Media stated after the occasion.
“The networking room felt alive, stuffed with conferences – builders, know-how suppliers and financiers had been there creating significant enterprise relationships. That is no small feat for one of many world’s most vital areas to the vitality transition,” Makin stated.
Subsequent 12 months’s Power Storage Summit Asia is scheduled to happen in Singapore as soon as once more, in July 2024. Go to the occasion web site for extra particulars.