Annual report 2020
The world is continuing to be electrified, in part because of the increasing use of electricity rather than fossil fuels in infrastructure and transportation and in part because more and more people are gaining access to power grids. In parallel, calls for greater use of renewable energy are increasing in order to reduce the climate impact.
Around two billion people worldwide currently have no access to reliable electricity supply; i.e. electricity supply around the clock and without recurrent power cuts. Today, nearly a billion people live in off-grid areas. Reliable electricity supply is a prerequisite for economic and social development, which is why the UN made sustainable energy for everyone one of its 17 Sustainable Development Goals. Free-standing power networks, known as micro-grids, are expected to account for a significant proportion of the expansion that is required.
Accordingly, there is growing demand for sustainable electricity production at a competitive cost 24 hours a day. The use of renewable sources of energy is increasing at a faster rate than fossil energy. The International Energy Agency (IEA) estimates that the use of renewable energy continued to increase in 2020 despite a reduction in global energy requirements for the first time in many years, due to the pandemic.
Although there are many reasons for the upswing in renewable energy, the fact that it has become increasingly cost-effective is not insignificant. In 2019, renewable energy accounted for 11.4 percent of total energy production and, in 2020, solar energy was cheaper to produce than coal power in many parts of the world. Increasing numbers of countries are adopting targets for net zero emissions by 2050, which is also driving the green transition.
There is a clear distinction between intermittent (non-continuous, fluctuating) energy sources and sources of baseload power (continuous). Solar and wind power are currently intermittent sources since they only produce energy when the sun shines or the wind blows. Nuclear power and fossil energy sources are used as baseload power since they can produce energy 24 hours a day regardless of weather and wind. By combining solar and wind power with storage to make them available all the hours of a day, these sources can also be used as baseload power.
At present, the fastest and most cost-effective way of giving more people access to stable grids is usually by constructing systems for what is known as distributed and dispatchable electricity generation to supply micro and mini-grids. These systems generally include solar and wind power, currently supplemented by diesel generators as baseload power.
Energy storage is expected to play a key role in the transition from fossil to renewable sources of energy. Energy storage units can be used to balance the grid when the element of renewable energy increases both in traditional grids and in micro and mini-grids, in part in order to distribute the timing of production over the day, to suit weather conditions, varying electricity prices and high carbon taxes.
Initially Azelio has chosen to focus on the following geographical markets:
Middle East and North Africa. High solar radiation, moderate levels of access to electricity and high alternative costs for electricity production.
United States and Australia. A high percentage of solar radiation and high electricity prices.
South America. High solar radiation and a need for electricity to supply micro-grids, mini-grids and off-grid systems.
Sub-Saharan Africa. High solar radiation, low access to electricity and high alternative costs for electricity production.
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