Investment across renewable energy and battery storage soared to a record $716 billion in 2023 and is forecast to accelerate further to $995 billion by the end of the decade. Much of this growth is driven by large utility-scale wind and solar PV installations that supply electricity directly to the grid. The electricity generated can be utilized by the grid with few challenges, displacing electricity that would have come from fossil fuel sources such as coal, but particularly gas-fired power plants, which are a key source of flexible generation. However, there are times when there is excess electricity production beyond what the grid can handle. In these cases, the wind or solar plant is curtailed meaning that its electricity does not come to the grid and is effectively wasted. Or there is not enough electricity from renewables at certain times, meaning that fossil fuels must be relied on.

The existing grid infrastructure can do much of the work of balancing different forms of electricity production and contract with energy storage providers to provide grid balancing services, particularly for larger assets. But this becomes much more challenging for smaller renewable energy assets such as commercial, industrial and residential  solar energy installations. This is where the hybridisation of energy assets comes into play.

INSIGHT PREPARED BY OUR KNOWLEDGE PARTNER: Frost & Sullivan