Article - Greenbyte

Is digitalizing a diverse portfolio the booster of renewable dominance?

There is no doubt that renewables are the largest opportunity in business history. However, growth comes with pain, and a young industry like renewables isn’t what one would call stable. Industry investors have been employing diversification in energy type, OEMs and different markets as a safety net against turbulence, but is it enough? And, is it efficient? The key to leverage the benefits of a diverse portfolio seems to be digitalization.

At first glance, the renewable investment landscape seems like it’s all flowers and rainbows - with a pot of gold at the end of it. Solar and wind power are currently the cheapest ways to generate electricity and are bound to get even cheaper, with $7,4 trillion projected investments within the next two decades [1]. The solar panel market is both diverse and affordable; Indeed, the cost of solar PVs has dropped 300x in 40 years [2]. Wind power is currently the cheapest form of electricity, at 2 cents per kWh [3]. Last and definitely not least, the breaking trend of the next decade, batteries are projected to disrupt the entire industry by creating new business models and completely changing the face of the grid [4].

That very driving force that's made investment in renewables appealing—the falling upfront cost—is also inducing a great amount of turbulence. National and regional policies are affecting renewable energy investments, pushing major players to explore different energy types and emerging markets [5, 6, 7]. Manufacturers are constantly popping up, increasingly being acquired, merged or forced out of business, presenting new market challenges [8]. So what, if any, levers do you have to shield your assets and find your footing in the quicksand that is the renewable energy industry?

Diversification is a known tactic among investors generally to minimize risk. A diverse renewable energy portfolio—across energy types, geographies and manufacturers—is an obvious strategy that can effectively absorb the shocks of the energy market. But doing so presents a host of other challenges that stem from managing diverse, distributed generation. Overview of investment performance is rigid and time-consuming; engaging the right stakeholders slows down executive decisions; growth, the ultimate goal of diversification, becomes a beast of a task because of scattered data. Nevertheless, all these loose threads can be trimmed down by employing a simple strategy—one that the renewable industry has long been beckoning for [9, 10]; digitalization and data monitoring turn those issues into an opportunity, and trace sharply the outlines of diverse investments [11].

Enforcing software for diverse portfolio data management allows owners and investors to centralize and harmonize data from a broad spectrum of manufacturers, energy types and geographies. In turn, investors experience 3 critical benefits, which add a layer of protection against market volatility, complementary to portfolio diversification.

1. Knowledge is power—own it

As an investor, regardless of how you choose to operate your renewable energy assets, having an overview of and direct access to your data, gives you full independence. Data management software gives you a holistic view of different OEMs and energy types and direct access to your portfolio at anytime. This way, you can eliminate multiple layers of scheduled third-party reporting. Collaboration and information flow among the stakeholders is instant, painless and takes place in a single platform, as opposed to streaks of email conversations spanning weeks, and spreadsheets. Moreover, you have instant track record proof of any investment at any portfolio level.

Specifically for a diverse portfolio, centralizing data from different energy types and OEMs can make a world of difference in terms of efficiency and ultimately decision making. The big picture is now more important than ever, and owning it - precompiled and in the cloud - is all a savvy investor would require to make informed and actionable decisions.

2. From A to B - and everything in between

Every investment has an element of risk and, as for renewables, volatility is a routine. However, diverse portfolio data security can be safeguarded from turbulence in the OEM department, when provided with a second layer of an independent connection.

At Greenbyte, we have seen an extreme example of this happen on a first hand basis; we found ourselves fighting beyond office hours to save the data of multitudes of SunEdison SEEDS boxes across the US, when the manufacturer went out of business. What seemed like a very affordable investment for our users, ended up putting them in a pickle: The manufacturer’s servers would stop running, resulting in complete loss of data. With no documentation available, the team in Sweden managed to reverse engineer and reestablish the connection from the PVs, saving all historical data and providing a stable connection for real-time monitoring. In the end, what could have been a losing investment for our users, needed an extra digital hand to turn into an outstanding deal.

Overall, it’s yet another perk of owning independent data. Establishing a third party cloud connection, backed up with network expertise, allows investors to brush off this type of urgent news that leave a good part of the industry sweating.

3. Carving the future

The most valuable insight data can give you is an x-ray of the past, present and future of your investments. A significant aspect of outlining the return of your investment can be easily carved from cumulative performance data. Most importantly, when you are ready to embark on future renewable ventures, analyzing past data and performance is the most powerful tool in your toolbox for making an informed decision about the future. Being able to compare the performance of different OEMs, in different locations, profits from combination of energy types and analyzing your investment multidimensionally, provides valuable insight into the not so obvious sides of an investment, that ultimately make for the competitive edge. Finally, If you find yourself selling assets, a holistic report of performance data is a reliable, accessible and automated proof of track record.

Moving resourcefully with your share in the largest opportunity in business history is truly badge of accomplishment. Investors who smartly choose a diverse portfolio can augment the pros and eliminate all the cons of that successful strategy, by owning their data in the cloud. Our advice? Give digitalization a go! Take the first look at Greenbyte Energy Cloud

References

[1] Corné, J. (2019). Hydrocarbons are fuel, wind & solar is technology - Greenbyte. Retrieved from www.greenbyte.com/resources/blog/article/hydrocarbons-are-fuel-wind-solar-is-technology/

[2] Nussey, B. (2019). Help wanted: the clean energy industry could really use the skills of tech executives - Freeing Energy. Retrieved from www.freeingenergy.com/help-wanted-the-clean-energy-industry-could-really-use-the-skills-of-tech-executives/

[3] Chao, J. (2018). Report Confirms Wind Technology Advancements Continue to Drive Down Wind Energy Prices. Retrieved from newscenter.lbl.gov/2018/08/23/report-confirms-wind-technology-advancements-continue-to-drive-down-wind-energy-prices/

[4] Frankel, D., & Wagner, A. (2018). Battery storage: The next disruptive technology in the power sector. Retrieved from www.mckinsey.com/business-functions/sustainability/our-insights/battery-storage-the-next-disruptive-technology-in-the-power-sector

[5] Stone, M., & Deign, J. (2016). Bankability shifts focus in emerging markets. Retrieved from www.solarplaza.com/channels/finance/11443/bankability-shifts-focus-emerging-markets/

[6] Deign, J. (2015). What’s behind technology diversification in solar PV. Retrieved from www.solarplaza.com/channels/finance/11393/whats-behind-technology-diversification-solar-pv/

[7] Foehringer Merchant, E. (2019). Solar Is Gaining in Wind Markets as the PTC Steps Down. Retrieved from www.greentechmedia.com/articles/read/solar-gaining-in-wind-markets-as-ptc-steps-down

[8] Beetz, B. (2018). Energy storage inverter shipments to reach 3 GW in 2018, 7 GW in 2022. Retrieved from www.pv-magazine.com/2018/12/19/energy-storage-inverter-shipments-to-reach-3-gw-in-2018-7-gw-in-2022/

[9] Digital solutions about to revolutionise how wind energy works - WindEurope 2018 Conference. (2018). Retrieved from windeurope.org/summit2018/media-and-press/news/digital-solutions-about-to-revolutionise-how-wind-energy-works/

[10] Digitalisation and Solar - SolarPower Europe. (2018). Retrieved from www.solarpowereurope.org/priorities/digitalisation-and-solar/

[11] Schoklitsch, H. (2018). Digitalization Is Revolutionizing the Renewable Energy Sector. Retrieved from www.renewableenergyworld.com/articles/2018/02/digitalization-is-revolutionizing-the-renewable-energy-sector.html

First publication: solarpowerworldonline.com