Energy-as-a-Service Powers a Decentralized Future

August 11, 2020

Contributed by Steve Pullins, Chief Technology Officer of Alphastruxure

Steve Pullins has over 40 years of energy industry experience in operations, maintenance, engineering, microgrids, and renewables project development. Mr. Pullins has advised international utility and government organizations on Smart Grid technologies and operations, microgrid development, integrating intelligence, new power generation, and waste to energy issues. He has designed more than 75 microgrids. Click here to learn more about AlphaStruxure.

Facing an uncertain energy future

The global energy transition is in full swing and picking up speed. For organizations of all sizes, the energy challenge is four-fold: cost, sustainability, reliability and resilience must all be solved for, both immediately and in the long-term.

In response, energy and sustainability strategy has moved into the c-suite. Almost all (99%) of CEOs from the world’s largest companies believe that sustainability issues are important to the future success of their businesses, according to a 2019 CEO study on sustainability.

In the face of climate change, government mandates, and consumer preferences, many organizations – public and private – have set lofty sustainability goals. But setting the goal is often the easy part, and major challenges can arise during implementation. We call this phenomenon the ‘ambition gap.’

Meanwhile, the backdrop of volatility in the market, uncertain regulatory environments, and the ongoing strain of COVID-19 on capital budgets make strategic planning for energy and sustainability even more challenging.

The good news is that technology and business model innovation is riding to the rescue – in the form of a decentralized approach to energy. The costs of decentralized energy technologies like solar and battery have fallen nearly 90% in the past decade, and these technologies can now be integrated and optimized in an advanced microgrid. Microgrids provide a proven alternative that delivers on all four vital metrics: cost-effective, sustainable, reliable and resilient energy.

Still, a few barriers remain to microgrid deployment for many organizations, including cost, complexity and risk.

Microgrids traditionally have been a capital-intensive undertaking, and an organization may also hesitate to take on the complexity of project implementation or the responsibility for the proper functioning of the microgrid system. Today, the pressures to prioritize CapEx toward core business activities rather than investing in energy infrastructure, are even greater. That’s where a new business model for microgrids – Energy-as-a-Service – can pick up the slack.

A Digital Backbone for a Decentralized Future

Building on its global reputation as a leader in energy efficiency and sustainability, Schneider Electric has surged to the front of the microgrid market. Schneider’s distributed energy hardware and software technology that make up the backbone of microgrids – including EcoStruxure™ Microgrid Advisor and EcoStruxure™ Microgrid Operation – have been consistently ranked by industry analysts as best-in-class. Alongside the technology, Schneider is head and shoulders above the market in microgrid deployment – with over 300 advanced microgrid projects in the U.S. alone. Click here to learn more and get in touch about your microgrid project.

Energy-as-a-Service for Microgrids: How it works

Energy-as-a-Service (EaaS) takes all the CapEx, complexity, and risk away from the client for microgrid deployment. The EaaS provider designs, builds, finances, owns, and operates the system on behalf of the client, providing a unified contract that guarantees the benefits of the project. Not only does the EaaS provider make the capital investment for the project – removing any and all CapEx burden from the client – but also guarantees and backstops the performance and benefits of the system, which can include uptime, renewable energy targets, resilient response to severe weather, and cost per kilowatt-hour.

Any EaaS provider worth its salt opens up a creative and collaborative discussion with the client around their needs – wrapping in energy supply, more renewables, high resilience, and better reliability and providing cost predictability. What’s more, if a customer needs to upgrade their electrical, mechanical, or even IT infrastructure, that all can be wrapped into the scope of the EaaS project. All this is done converting CapEx to OpEx, saving the client’s capital to invest in mission critical activities.

AlphaStruxure – Schneider Electric’s joint venture with The Carlyle Group

No doubt about it, delivering EaaS to a client requires a robust combination of energy and financial capabilities. That’s why Schneider Electric partnered with The Carlyle Group to launch AlphaStruxure – a joint venture uniting the best-in-class microgrid technology and deployment capabilities of Schneider with one of the largest and most successful private investment firms the world.

With over $220 billion in assets and a global focus on infrastructure, Carlyle has the capital availability to fund EaaS projects ranging from airports to electric bus depots, data centers, manufacturing, and college campuses.

Together, Schneider and Carlyle provide an EaaS offering without parallel, backed by two industry leaders delivering the financial strength, technology capabilities, and staying power required to move forward with EaaS with confidence.

The art of the possible

The technology and engineering capabilities of Schneider paired with the deal structuring expertise of Carlyle allow for AlphaStruxure to craft EaaS solutions tailor-fit to clients. Working closely with the customer, AlphaStruxure develops a range of options that meet key objectives and are financially viable, narrowing down the options to the ones that are most likely to deliver the expected value for the client. From there, AlphaStruxure presents side-by-side comparisons including financial models. This art of the possible approach brings the client along the journey of figuring out the best solution.

AlphaStruxure handles the challenging technical questions that support those options, always engaging the client as part of this process, so that the goals are always aligned with the options that come out of the process.

Staying focused on your core mission

EaaS allows organizations to do what they do best: focusing on their core mission, investing in expanding production, while letting the EaaS partner manage the complexity of energy and delivering guaranteed benefits.

EaaS turns energy from a risk, cost, and challenge into a strategic advantage. Rather than forgoing the benefits of a microgrid, additional efficiency, and infrastructure upgrades, EaaS allows these projects to move forward with no cost to the client – accelerating the client’s missions and helping them thrive.

Register for our upcoming webinar to learn how new financial business models can get your capital infrastructure projects back on track.

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