Expert Blog – January 18, 2022
Investment Manager Nienke Rijpstra is for Energiefonds Overijssel continuously looking for new opportunities and solutions in the field of solar energy. In this blog she describes the challenges and innovations she encounters.
Growing share of sun and wind
At the end of 2021, the share of electricity from renewable sources was 33.4 percent. The year before that was 26 percent, so that's hopeful. However, we are still have a long way to go: the Climate Agreement aims for at least 70 percent renewable electricity by 2030. The province of Overijssel aims to generate 3.3 TWh by 2030: more than 9 percent of the national target of 35 TWh per year for renewable electricity, coming from sun and wind on land. Energiefonds Overijssel contributes to this by investing in various solar projects.
Limited grid capacity
It is wonderful, of course, that energy from sun and wind really does get off the ground. Only, our electricity grid is not designed for large amounts of locally generated power. Currently, about 3,000 companies and sustainable energy projects in the Netherlands are on the waiting list for a connection to the grid. Although it was agreed in the coalition agreement that 700 million euros will be available before 2023 for the adjustment of the networks, it will take years before this is realised. This particularly affects the northeast of the Netherlands, where there is a lot of room for large-scale energy generation, but where there is no extensive distribution network.
By installing a battery at a solar or wind project, a smaller connection may suffice. At the moment, however, batteries are still quite expensive and only profitable if they are used in the imbalance market - in addition to their own use. A possible revenue model with which you can make a battery profitable is to sell stored electricity to TenneT via an auction per bid and thus help the national grid operator to keep supply and demand in balance. For example, energy cooperative Endona is with solar park Heeten – financed by Energiefonds Overijssel – involved in the flexible supply of energy to TenneT.
Even companies that combine solar panels on the roof with a battery can sometimes do without a connection: the generated electricity is fully self-consumption. In Gelderland and Overijssel, it is now being examined whether entire industrial estates can be made self-sufficient by means of smart decentralized energy systems – Smart Energy Hubs – where sustainable energy is generated, stored and used locally.
Storing in hydrogen
Another option to avoid the connection traffic jam is to store solar energy in hydrogen and sell it to the industry or the mobility market. This is especially interesting for large trucks, which are no longer allowed to drive on fossil fuels from 2050, but travel too great distances to be able to do that electrically. Hydrogen is not yet used on a large scale. Not only because of the high costs, but also because about 25 percent of the energy is currently lost when converting electricity to hydrogen.
Follow innovations closely
We keep a close eye on developments in the field of storage. For example, we are involved in research into a hydrogen project in Overijssel, we are looking with advisors at possible revenue models for batteries, we visit storage projects and we are talking with battery producers. We look at these types of innovative projects with an open mind and are ready to invest in them at an early stage; as soon as there is a prospect of a profitable business case and a broader applicability.
From asbestos to generation
A good example of an innovative solution that we are already financing is the project Duurzame Zekerheid by Univé. This insurer had 20,000 agricultural customers with an asbestos roof on their stables, which they no longer wanted to insure. Univé came up with a very good solution, in which it proposed to its agricultural customers: 'We replace your roof for free and install solar panels on it. Over the next 15 years we will use it to recoup our investment. Then you can take over the solar panels for your own use for a symbolic amount.' Good for Univé, great for farmers – who often have no money to replace an asbestos roof – and great for private insured parties, who are allowed to purchase locally generated electricity from those roofs.
Another beautiful, but non-standard solar project that we finance is AmperaPark. This company places carports with solar panels at hotels and companies and connects charging stations to them. Another smart solution: they already use the ground as a parking space and they can let their guests and employees drive on green energy. In addition, the cars are covered.
What makes this project unique, is that it does not use subsidies to generate solar energy. For Energiefonds Overijssel this is a good example of an innovative solution that does not supply the grid. That is why we are happy to stimulate this project with financing to realize the first solar carports in Overijssel. And if AmperaPark continues to grow, StartGreen is ready to finance projects throughout the Netherlands.
Dare to invest
So you can say that even the added value of StartGreen is under development. As a green partner, we look beyond the financing of standard solar and wind projects. We are committed to local ownership through the facilitation of citizen participation. In addition, we dare to invest in innovative solutions that make the energy transition possible.