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Elisa Distributed Energy Storage overcomes limitations of cost-effective solar energy production

Blog by Jukka-Pekka Salmenkaita
June 2024 

In recent years, solar energy has emerged as one of the most cost-effective methods for producing electricity. The potential of solar energy can be greatly enhanced by integrating it with a distributed energy storage system that stores the energy for later use, allowing solar energy to provide power even when the sun isn’t shining.

These decentralised storage systems are networks of batteries that store energy close to where it will be used, enhancing efficiency and reliability. Elisa Distributed Energy Storage (DES) utilises the backup batteries in telecom network base stations to store energy and release it as needed. Network operator Ålcom from the Åland Islands is the first operator to deploy Elisa DES for solar energy.

Cost-effective solar energy

On the road to net zero, solar energy offers significant cost advantages. The primary expense lies in the initial setup of the solar panels and storage systems, but operational costs are minimal since sunlight is free. Technological advancements and economies of scale have dramatically reduced the cost of solar panels and the related infrastructure, making solar energy increasingly attractive. In fact, the cost of electricity from solar has fallen by 87% in the last decade, and it is now the fastest-growing energy source in the EU.

For example, in Spain, the falling cost of solar photovoltaic systems makes solar competitive with conventional energy sources. Solar panels now provide over 10% of Spain’s electricity generation.

Known for its abundance of sun all year round, Spain has leveraged its solar potential effectively. The country has large-scale solar farms and an ever-increasing number of business and residential solar installations. In 2023, Spain increased its solar photovoltaic generation capacity by 28%, adding 5.6 GW during the year to reach a total of 25.5 GW in service, according to Spain’s power grid operator Red Eléctrica de España. This is the highest rate of solar PV installation since records began.

The integration of distributed energy storage solutions helps manage the variable nature of solar energy, storing excess power generated during peak sunlight hours for use during evenings and cloudy periods. This has reduced dependence on fossil fuels and lowered electricity costs for consumers.

Solving challenges in solar energy production

The primary challenge for solar energy is its intermittent nature – it’s only available during the daytime and depends heavily on weather conditions. This can lead to supply shortages at night and when it’s cloudy. However, distributed energy storage systems address this challenge by storing excess energy produced when it’s sunny for later use.

By integrating distributed energy storage solutions like Elisa DES into their power strategy, organisations and people in countries that see less of the sun can still reap the benefits of solar generation.

In Finland, despite its’ northern latitude and the limited sunlight during the winter, the country has been able to effectively integrate solar energy into the power mix, albeit still at a small but growing scale, by focusing on innovative technologies that increase efficiency, such as in energy storage.

Innovations in battery technology and energy management systems enable efficient storage and use of solar power, ensuring a steady supply of energy even when solar production is low, and demonstrating that solar energy is viable even in less sunny regions. In Finland, where solar currently provides only 1% of the country’s power, there is enormous potential for expansion.

Elisa DES prevents price cannibalisation

Cannibalisation is an economic side effect of the increased penetration of renewable energy sources like solar, in which existing power plants become less profitable, and renewables end up cannibalising their own profits.

As solar energy becomes more prevalent, it lowers the market price of electricity during peak production times (typically around midday), which can reduce revenues for traditional energy producers – and especially for the renewable producers themselves whose production is concentrated on these hours of ample supply. If supply can be distributed to wider time periods, the price cannibalisation effect can lessen significantly. This economic effect underscores the need for effective energy storage solutions.

Elisa DES can balance energy supply and demand – mitigating the cannibalisation issue – by storing the power generated at peak production and releasing it later when it is more profitable.

Elisa DES enables better usage of solar assets

With the new solar power upgrade, telcos that use solar power as part of their energy consumption will benefit from adding Elisa DES in four ways:

  • Increased resilience and security: By storing and distributing energy close to the point of use, Elisa DES enhances the stability of the power grid and reduce the risk of outages. DES also facilitates the integration of renewable energy sources, smoothing out variability and ensuring a constant supply of energy.
  • Effective utilisation of solar investments: With its added solar capabilities, Elisa DES allows telecom operators to get the most from their solar power assets, reducing their dependence on the grid and traditional energy sources. As the energy is consumed close to where it’s generated, losses during transmission are minimal.
  • Smart optimisation: The AI/ML-optimised Elisa DES automatically chooses the optimal moments for charging and discharging batteries, reducing costs for operators while maintaining maximum effectiveness.
  • Scalable for all applications: Elisa DES also scales seamlessly with operators’ needs and with demand, making it equally suitable for all applications in the network, large or small.

Solar energy complemented by distributed energy storage systems presents a cost-effective and sustainable solution for electricity production. As the technology continues to advance, solar energy in conjunction with DES is poised to play a critical role in in the global transition to renewable energy.

Jukka-Pekka Salmenkaita, VP AI and Special Projects and head of Distributed Energy Storage at Elisa.  

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