Annual report 2019
Large parts of the world do not have access to a reliable electricity supply – that is, an electricity supply every hour of the day without frequent interruptions. Access to a reliable electricity supply is important for economic and social development, and energy shortages have a negative impact on households, businesses and the public sector. There is a significant demand for electricity-producing systems that can meet the need for a reliable electricity supply.
Alongside the absence of reliable electricity supplies, demand for electricity in developed countries is growing – for infrastructure and transport, for example. There are also new requirements aimed at increasing the use of renewable energy so as to reduce carbon emissions and drive the global transition from fossil fuels to renewables. To sum up, there is a demand for sustainable electricity production at a competitive cost 24 hours a day.
The share of renewable energy is increasing, not least as it becomes more cost-effective compared to fossil fuels. In 2017 renewables accounted for 9.3 percent of total energy production. By 2025 it is expected that renewable types of energy will overtake coal as the largest source of electricity production, and by 2050 these are expected to account for almost half of global electricity production.
There is a clear distinction between intermittent (non-continuous, fluctuating) energy sources and sources of baseload power (continuous). Solar and wind power are intermittent sources since they only produce energy when the sun shines or the wind blows. In contrast, nuclear power and fossil energy sources are baseload power sources since they can produce energy 24 hours a day regardless of wind and weather conditions.
This distinction is relevant because energy consumption is relatively continuous over time and follows a clear pattern each day, with high consumption in the evenings when production from photovoltaics is low. In order for solar and wind power to be able to satisfy the need for a continuous energy supply and be an adequate alternative to nuclear power and fossil energy sources, solutions are therefore required that allow energy to be stored to cover requirements at all hours of the day and night.
At present, the fastest and most cost-effective way of giving more people access to stable grids is generally by constructing systems for what is known as distributed and dispatchable electricity production to supply micro and mini grids. These systems generally include solar and wind power, currently supplemented by diesel for baseload generation.
Overall, this means that energy storage is expected to play a key role in the next stage of the transition from fossil fuels to renewable energy sources. Today there is particular demand in markets with micro grids that are dependent on expensive energy sources such as diesel, but which also have access to cheap and underutilised energy sources such as solar and wind power. However, there is also demand for energy storage in grid-connected markets with good access to renewable energy sources, for poorly performing grids and in markets with widely fluctuating electricity tariffs or high carbon taxes.
Initially Azelio has chosen to focus on the following geographical markets:
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