Solar Power Power: Renewable Infrastructure Dinner
Pardon the Interruption
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I like solar power. More energy from the sun hits the earth in a few hours than is generated on earth by humankind in a year, so there is quite a compelling case for using it to generate power where we can.
I was, therefore, delighted to join the Mallowstreet University dinner at the Conduit Club in Soho to hear about a rather innovative approach to Solar power.
We were guests of True Green Capital who have been running a distributed solar power fund for several years. Another solar fund I hear you all groan, but wait! This one is different. Very different in fact.
The key to True Green’s differentiation lies in the word “distributed”. There are no 6,000 acre solar farms in the desert connected to national power grid networks, so no transmission waste or unsightly pylons. All True
Green’s installations are on-site, or as close as is possible to their intended users. This is where things start getting interesting because power is getting generated where it is consumed.
Founding Partner took us through True Green’s philosophy and began by noting that over 60% of power generated is wasted. Up to half of this waste comes in the very act of transmission, with other factors such as the inefficiency of lightbulbs (think incandescent bulbs here) contributing to overall losses of over 90%.
We next looked at cost comparators between distributed solar and the current available generation sources. It was no surprise to see the absence of transmission waste giving True Green a competitive advantage over such stalwarts as nuclear. Agreed the advent of SMRs will erode this advantage, but distributed SMR power generation looks to be a long way off. It is also the distributed nature of True Green’s business that enables it to have a favourable risk return profile.
When you add on the fact that installations take only weeks or months to become operational compared to years, or even decades for large power stations the opportunity becomes a lot clearer. Add onto this the self-evident ESG benefits of distributed solar power generation and it isn’t hard to see why the EU market has grown 9-fold in about six years. The US market is a bit behind this, but this is partially due to the abundance of land available in the US and a different regulatory & tax environment.
Panos ended his presentation with a deep-dive into how True Green does business. They are very discerning and have a lot of traction with sellers of existing facilities, as well as greenfield sites.
Questions came constantly throughout the presentation and it was obvious that the attendees at the dinner were very engaged with the concept of distributed power and the opportunity it presents for pension funds.