A Melbourne-based clean energy company shares some wisdom gleaned from 10 years of trying to stay ahead in a relentless sector.
A 10-year anniversary is a big deal in the up-and-down world of renewable energy. Clean Technology Partners founding director Lachlan Bateman admits one of the biggest lessons he’s learned over the past decade is to think ahead.
“We started life as a consultancy with an electrical engineering focus and for a good chunk of time we were almost solely focused on solar,” Bateman tells EcoGeneration. “But we look at the renewables market now as three categories: utility PV projects and behind-the-meter C&I solar; hybrid projects, including off-grid or renewables with a dispatchable element, and; detailed design.”
Bateman’s tip for owners of installation companies is to never sit still. “You can’t be static; you have to be asking, what’s going to happen 12 months from now and what do I have to do to stay relevant,” he says.
Competition in parts of the solar industry can be “relentless”, he says. “Ultimately it’s a good thing, as far as getting emissions down, but it’s a tough market to operate in.”
Running a business, Bateman has to look for opportunities in a market that never stops moving. It means going beyond what’s happening today, he says, to anticipate where the company can offer premium solutions that solve more complex problems. It’s been obvious in the C&I solar space, for example, where he says there has been a “commoditisation” of installation companies’ services as they battle for work.
“When we first started there was a real angst [in winning work],” he says, referring to the years before solar was anywhere near as affordable as it is today. “We were able to offer quite a lot of value to national companies that were doing larger installs.” Everything changed when Australian Standard 4777.2 rolled out in 2015 and the market “settled down a bit”.
Plan to diversify
As C&I solar grew more competitive, Bateman says CTP decided to concentrate on other parts of the market. “We’re not providing a lot of engineering services for anything under 500kW now, and that threshold is getting higher all the time,” he says.
All of this is not to say Bateman is down on C&I solar. “It’s probably a stronger market [than utility] in some ways,” he says. “You don’t have the impacts of negative pricing and marginal loss factor issues you have on front-of-meter projects, but it is a very commoditised space now.”
A subsidiary company, Clean Technology Controls, was established to more finely target the C&I area with switchboards, testing and optional engineering.
Having worked in renewables for about 15 years, Bateman understood how long it can take to deliver a product or new service. “If your target price is linked to the current market price, you’re always going to be playing catch-up,” he says. “That’s what informed the spin-off of our business Clean Technology Controls. We knew if we kept doing what we were doing that we would have to step away from that market.”
Bateman says CTP has clocked up more than 1,500 projects, contributed to more than 2.5GW of clean energy generation and delivered 150MWh of storage.
Instead of looking for simple ways to grow, a company can always take the route of pitching for harder nuts to crack and charge an appropriate premium. An example in CTP’s book is its e-Cube product, where it spied an opportunity to supply a turnkey grid-connection solution for utility-scale solar clients.
For solar projects up to 5MW the e-Cube solution offers a counterbalance to ever more complex grid-connection study requirements by the Australian Energy Market Operator.
Utility-scale early bird
Bateman says a great experience during the long solar ramp-up over the past few years was working with SunSHIFT, a company that deployed rugged portable PV systems to mining sites around the country. For CTP, it was a case of putting ambition to the test. “We were confident,” he says. “We backed ourselves.”
It wasn’t the first time. CTP was involved with the first utility-scale solar farm that connected to the NEM: the 3.5MW Mildura Solar Farm, which predated the 20MW Royalla Solar Farm in the ACT by a few months, he says. “That was our entry into utility scale and also our entry into power system modelling, which is now about 40% of our business.”
CTP works on power systems connection studies for utility-scale wind and solar projects up to 100MW-plus and behind-the-meter projects as large as 10MW, he says. Among its portfolio of hybrid system projects is a large tourist destination off the coast of NSW where diesel is being replaced by a solar-and-storage system that will provide up to two-thirds of the island’s energy needs.
“I could reel off dozens and dozens of really high-profile projects we’ve been a key part of, but because we’re working a couple of levels down solving those engineering problems it’s not easy to get the relevant approvals so we can talk about them,” he says.
CTP’s technical advisory work at the moment includes a 35MW project in Queensland, acting as commissioning managers on a 140MW solar plant in Victoria and working on solar assets in Queensland.
The next 10 years
It’s been a busy 10 years and the decade ahead will be just as fast-paced. Is it a satisfying industry to work in? “I’m passionate about the industry; I see it as one of the most effective ways to have an impact on climate change – which is my starting point. But it’s quite tough to be commercially successful. That’s why the 10-year anniversary is such a milestone for us, to be honest.”
With the development pipeline for energy storage recently outstripping the pipeline for solar (acknowledging that many of these projects will never be built), Bateman says the storage sector feels like the solar sector did about 10 years ago. “The demonstration projects have happened and we’re pretty close to seeing the first stand-alone energy storage projects that stand up in their own right,” he says.
For Bateman things feel a bit like they did when the first 30kW string inverter came out. “That was the point when rooftop C&I solar started to become commercial. I think we’re starting to see similar products start to come out in the C&I energy storage space.”
An interesting observation, which is an obvious niggling frustration for an engineer, is that connection regulations are less stringent for stand-alone storage assets as they are for those co-located with generation. “It strikes me from an engineering perspective that it would be more efficient to tie a battery to an existing asset, but there are quite a lot of impediments to that, it seems.”
The Melbourne-based company is currently working on large front-of-meter storage projects in two states. “It feels like 2021 is the energy storage equivalent of what 2013 was for solar.”