Damian Baker, founder + chairman, RenEnergy UK says diversified energy portfolios are the future.
As RenEnergy approaches its 20th year in the renewable energy sector, its founder and Chairman, Damian Baker, looks back on a period defined by energy volatility and explores the tools businesses have available to manage their exposure to geopolitical shocks.
Industry finds itself in the second major energy shock in four years. Just as businesses began to feel comfortable with stabilising energy prices, geopolitical events have once again reminded us how fragile global energy markets are. If there is one thing the last two decades in the renewable sector has taught us, is that volatility is to be expected, and being prepared does not require luck, but strategy,
A balanced energy strategy
The future of energy resilience must be based on a balanced and pragmatic approach. Despite rapid progress in renewables, the reality is that oil and gas will continue to play an important role in the UK's energy mix for the medium to long term. In our current climate and technological landscape, there are still gaps that fossil fuels help fill. However, the question for businesses is not whether fossil fuels disappear tomorrow, the question is; “How much exposure do you want to have to global energy markets?”
Distributed renewable energy can make a profound difference to a business that is exposed to market volatility. Sectors from retail to transport have found the solution through solar energy, or more specifically, through the deployment of solar PV and battery storage. We are seeing businesses replace over 50% of their energy consumption with on-site generation. This is not just about sustainability; it is about energy resilience and financial predictability, allowing businesses to plan with greater confidence for the future.
In an increasingly uncertain world, control over energy supply becomes a strategic advantage. One of the biggest changes over the last decade is the economics of solar power. The levelised cost of energy from rooftop solar systems today typically falls between:
- 3–5p per kWh for rooftop solar
- 5–8p per kWh for solar carports
Those numbers are calculated over the lifetime of the system, which typically exceeds 25 years. When those numbers are compared with grid electricity prices, which continue to be volatile and exposed due to the global gas markets, the long-term value of solar pv becomes clear.
Opportunities only increase when battery storage is added to the equation. They allow businesses to excess solar generation, optimise energy use across the day and prepare for future electrification such as EV fleets excess solar generation.
The future is diversified energy portfolios
Predicting the future of energy prices is impossible. History tells us that prices tend to fall during periods of geopolitical stability and rise sharply during global conflict or supply disruption, but one trend is clear, the transition toward electrification and decarbonisation is accelerating fast, which means renewable energy will play an increasingly central role in the energy system. For businesses, the strategic response should not be all-or-nothing, instead, the future lies in energy diversification. Most businesses will always rely on some grid electricity, but the more energy that can be produced and managed on site, the greater the resilience.
Recent geopolitical events in the Middle East and the Ukraine have once again highlighted the fragility of global energy systems. For businesses, governments, and individuals alike, this moment should prompt an important question: How diversified is your energy supply? Producing energy on-site will not eliminate the need for the grid, but the more energy you control locally the less exposed you are to global volatility. In today's world, that resilience is becoming one of the most valuable assets a business can have.