The king of oil bets on batteries for a green world
30/09/2021 06:00
* Beard's fund to invest in UK battery storage
* Batteries can cushion shocks and help power trading
* UK facing energy crisis
By Dmitry Zhdannikov
LONDON, Sept 30 (Reuters) - Alex Beard is losing his thirst
for oil.
Once one of the world's most powerful oil traders, the
former Glencore GLEN.L executive is now raising money to build
a portfolio of strategic battery sites across the United Kingdom
to support the renewable energy industry.
In his first interview since leaving the commodities giant
in 2019, billionaire Beard said his Adaptogen Capital investment
fund planned to build storage with a capacity of at least 500
megawatts (MW) to power homes when grid supplies fall short.
In his heyday at Glencore, Beard's team was trading as much
as 7% of the world's oil. The fact he is turning to
infrastructure to support renewables is another sign of the way
the wind is blowing for the global energy industry.
"I have time for a second career in energy markets. It won't
be oil and gas but it will be the transition away from carbon
that will be most relevant for the next 25 years," he told
Reuters at his offices off Regent Street in London.
Adaptogen https://www.adaptogencapital.com Capital's fund
raising drive comes at a time when the United Kingdom's energy
industry is facing one of its worst crises
https://reut.rs/2Wn1Q5g for decades. A perfect storm of low gas
supplies globally has sent prices surging while wind and nuclear
power have been unable to take up the slack. urn:newsml:reuters.com:*:nL8N2QM0LY
"The current crisis gives you a taste of what we will be
experiencing more and more often," said Beard, who is 54.
"Batteries provide you with stability when the grid becomes
unstable and are key enabling assets in the energy transition."
As economies move away from fossil fuels, power grids are
becoming increasingly important and governments and companies
are looking at how to make them more resilient to avoid the
supply outages and price volatility that have plagued networks
from China to California in the past year.
Supplies of renewable energy like wind and solar can
fluctuate wildly depending on the weather and the peaks and
troughs don't necessarily correspond with demand so battery
storage has long been seen as a way to help cushion shocks.
'VOLATILITY BOX'
At the moment, the United Kingdom has 1.1 gigawatts (GW) of
operational battery capacity to store power that can then be fed
back into the grid when required. An additional 15 GW of
capacity is under construction or being planned, much of it by
companies also investing in renewable power assets.
Beard said Adaptogen's 500 MW of storage will use
lithium-ion battery technology. That would be enough to supply
about 750,000 homes in the United Kingdom, according to a
Reuters calculation based on National Grid data.
The National Grid has estimated that under a scenario where
the country decarbonises rapidly, it could need more than 40 GW
of storage capacity by 2050.
"The world has learnt how to build renewables at a large
scale and now we need to build enough storage to accelerate that
transition to net zero," said Beard.
He also said renewable power companies have a long way to go
to fully understand and integrate trading and price volatility
into their operations - the kind of risks https://reut.rs/3kPTPiE
that have felled nine energy suppliers in Britain this month as
wholesale power and gas prices soar. urn:newsml:reuters.com:*:nL1N2QH1XA urn:newsml:reuters.com:*:nL1N2QV1KM
At the moment, renewable power companies rarely face spot
price risks as they operate under government-guaranteed
contracts, which has allowed them to stay competitive with
fossil fuels, he said.
But as renewable output grows and government price support
expires, the green energy industry would face a steep learning
curve to understand how to hedge price volatility better, said
Beard, who spent much of his career as a trader.
"Batteries can also be viewed as a volatility trading box
for the green energy industry and a crucial asset to add to wind
and solar generation," he said.
The battery response to supply and demand takes milliseconds
and can be executed by algorithmic software to take advantage of
power market volatility, as opposed to analogue instructions to
ramp up output at a traditional fossil-fuel power plant.
Beard, who holds a stake of about 2% in Glencore worth $1.2
billion at current prices, has also co-sponsored Energy
Transition Partners ENTPA.AS , a special purpose acquisition
company (SPAC) listed in Amsterdam.
The blank cheque company raised 175 million euros ($205
million) when it went public in July and is looking at targets
in the renewables, electric vehicles and storage asset sectors.
urn:newsml:reuters.com:*:nL4N2OR1ZH
Beard says oil and gas will continue to play a vital part in
global energy supply but renewables will grow faster and
hundreds of billions of dollars will be spent on the energy
transition away from carbon in the coming years.
($1 = 1.1714 euros)
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
UK energy firms seek state support to weather gas crisis
urn:newsml:reuters.com:*:nL8N2QM0LY
EXPLAINER-Bleak house: Why Europe faces steep winter energy
bills urn:newsml:reuters.com:*:nL1N2QH1XA
Three more British energy suppliers cease to trade - Ofgem
urn:newsml:reuters.com:*:nL1N2QV1KM
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(Reporting by Dmitry Zhdannikov; Editing by David Clarke)
((Dmitri.Zhdannikov@thomsonreuters.com;))