How Risks Due to Clean Energy Intermittency Can Be
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Posted On: 11/08/2024 4:41:22 PM
How Risks Due to Clean Energy Intermittency Can Be Mitigated
Intermittency is one of the key challenges governments will have to overcome as they build modern energy systems that are fully reliant on renewable energy. While fossil fuel-fired power plants generate energy at any time of the day or night, clean energy is dependent on the time and weather conditions. This is clean energy intermittency. A solar energy plant has zero output at night and its capacity may be limited during the day due to cloudy or overcast conditions.
Renewables can produce energy in abundance but their intermittency can inject a lot of volatility into green energy prices, especially if they aren’t paired with energy storage facilities. Intermittency will be a significant hurdle for nations to deal with as decarbonization becomes increasingly urgent and net-zero emission targets approach. EU Power Origination head Jean-Louis Malone outlines several ways players in the burgeoning green energy space can mitigate intermittency risks.
Developing a flexible and diversified portfolio of energy is one way to mitigate green energy intermittency and the price volatility it can cause. Rather than relying on a single green energy source, combining both wind and solar can help utilities plan their production better as solar typically has more predictable patterns while the wind is more immune to price cannibalization.
Investing in solutions such as stationary storage that provide flexibility can also help alleviate intermittency by storing excess power generated during optimal conditions and releasing it into the grid when output from solar and wind plants falls. Unfortunately, costs, technological and geographical constraints reduce the scalability of energy storage solutions like hydro pump storage and batteries.
Flexible risk management strategies will help industry players mitigate the market risk induced by intermittency. Conventional hedging instruments like ‘fixed for floating baseload swaps hedging’ won’t be as helpful in the renewables market, Jean-Louis Malone says. Industry players may have to invest in expert financial advisors to come up with a proper solution for mitigating risk in the renewable energy market. This includes teaming up with banks that have dedicated commodities offerings to increase the expertise and range of tools they can access.
The banks would outline hedging solutions such as energy storage for solar (which has the highest intermittency-induced volatility) that generate revenue from the green energy market’s intraday volatility. Such storage centers would store excess energy when prices are low and then sell it back to the grid when energy prices are high, allowing investors to benefit from intraday volatility in the solar energy market.
As the challenges of clean energy intermittency are addressed, electric vehicles from companies like Mullen Automotive Inc. (NASDAQ: MULN) that seek to reduce the eco-impact of vehicular transport will deliver greater benefits once the energy used to charge them is renewable and available round the clock.
NOTE TO INVESTORS: The latest news and updates relating to Mullen Automotive Inc. (NASDAQ: MULN) are available in the company’s newsroom at https://ibn.fm/MULN
Please see full terms of use and disclaimers on the GreenEnergyStocks website applicable to all content provided by GES, wherever published or re-published: https://www.greennrgstocks.com/Disclaimer
Intermittency is one of the key challenges governments will have to overcome as they build modern energy systems that are fully reliant on renewable energy. While fossil fuel-fired power plants generate energy at any time of the day or night, clean energy is dependent on the time and weather conditions. This is clean energy intermittency. A solar energy plant has zero output at night and its capacity may be limited during the day due to cloudy or overcast conditions.
Renewables can produce energy in abundance but their intermittency can inject a lot of volatility into green energy prices, especially if they aren’t paired with energy storage facilities. Intermittency will be a significant hurdle for nations to deal with as decarbonization becomes increasingly urgent and net-zero emission targets approach. EU Power Origination head Jean-Louis Malone outlines several ways players in the burgeoning green energy space can mitigate intermittency risks.
Developing a flexible and diversified portfolio of energy is one way to mitigate green energy intermittency and the price volatility it can cause. Rather than relying on a single green energy source, combining both wind and solar can help utilities plan their production better as solar typically has more predictable patterns while the wind is more immune to price cannibalization.
Investing in solutions such as stationary storage that provide flexibility can also help alleviate intermittency by storing excess power generated during optimal conditions and releasing it into the grid when output from solar and wind plants falls. Unfortunately, costs, technological and geographical constraints reduce the scalability of energy storage solutions like hydro pump storage and batteries.
Flexible risk management strategies will help industry players mitigate the market risk induced by intermittency. Conventional hedging instruments like ‘fixed for floating baseload swaps hedging’ won’t be as helpful in the renewables market, Jean-Louis Malone says. Industry players may have to invest in expert financial advisors to come up with a proper solution for mitigating risk in the renewable energy market. This includes teaming up with banks that have dedicated commodities offerings to increase the expertise and range of tools they can access.
The banks would outline hedging solutions such as energy storage for solar (which has the highest intermittency-induced volatility) that generate revenue from the green energy market’s intraday volatility. Such storage centers would store excess energy when prices are low and then sell it back to the grid when energy prices are high, allowing investors to benefit from intraday volatility in the solar energy market.
As the challenges of clean energy intermittency are addressed, electric vehicles from companies like Mullen Automotive Inc. (NASDAQ: MULN) that seek to reduce the eco-impact of vehicular transport will deliver greater benefits once the energy used to charge them is renewable and available round the clock.
NOTE TO INVESTORS: The latest news and updates relating to Mullen Automotive Inc. (NASDAQ: MULN) are available in the company’s newsroom at https://ibn.fm/MULN
Please see full terms of use and disclaimers on the GreenEnergyStocks website applicable to all content provided by GES, wherever published or re-published: https://www.greennrgstocks.com/Disclaimer
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