Digitalisation in the Solar Sector: An interview with Constantinos Peonides of Alectris

Constantinos Peonides is Head of Business Development at Alectris, a company that delivers asset care innovation for the global solar industry, utilising an integrated suite of operations, maintenance and asset management services, award-winning software and retrofit technologies. REM talked to Constantinos concerning topics such as what is happening with technology in the solar sector right now, the main potential benefits to be gained from digitalisation and what the main challenges are facing those engaged in this process.
Digitalisation in the Solar Sector: An interview with Constantinos Peonides of Alectris
Courtesy of Alectris

Can you give me a bit of background about yourself and about Alectris

Alectris was founded in 2012 and is a services company which delivers asset care innovation to the global solar industry. For the most part we provide operations & maintenance and asset management services in markets where we have a physical presence - right across the globe - but also in other markets through our partnerships.

Our main difference from other operations and maintenance providers is that we provide these services through a platform called ACTIS ERP which combines enterprise resource planning (ERP) and asset management software. We developed the platform upon discovering that many solar project owners and operators still lacked the software tools needed to successfully manage their operations. The technology has a number of advantages for solar project owners and operators over traditional asset management systems including centralised data management, task automation and the ability to scale as solar projects grow in size to meet changing project needs.

What’s happening with technology in the solar sector right now?

That varies depending on the market as some are more technologically advanced than others. The US is leading the race, followed by Europe, which is going through a transitional phase at the moment, and then most Asian markets - with the exception of China and Japan - are in the developmental stage.

The US is very advanced and mature in terms of how it is utilising solar technology, the involvement of utility companies in the market and overall grid connectivity. Asian markets represent a great opportunity for the development of more digital approaches, both in terms of upgrading the grid and implementing technology capable of controlling the power generated by renewables once they are connected.

What are the major potential benefits to be gained from digitising solar? In terms of energy efficiency, effect on reducing emissions and cost reduction?

Digitalisation can help us achieve greater energy efficiency, lower emissions and reduced costs in different scenarios. Let’s say I am an investor and I am interested in investing in renewable energy in general. The days where there was one investor in one location are now gone. Now we are going into a different phase where there are several investors in different locations, all investing in different technologies and sending their production to different entities.

Markets today have Feed-in Tariffs from different electricity authorities, Public Private Partnerships, community solar projects etc. The game is constantly changing; for example, in some markets we’re seeing Feed-in Tariffs being replaced by corporate PPAs. As an investor the question on my mind is, ‘how can I manage all of these factors and invest in different technologies?’.

Integrating digital approaches into solar and continuing digital innovation is the only way forward.

This doesn’t just mean connecting data from the field, though that it one very important aspect of digitalisation. The data management tasks solar project owners need to perform extends beyond just performance monitoring. Statutory compliance across operational, health and safety and financial activities must also be carried out. Centralising this data into one place is vital for effective data management. Only by combining performance monitoring, operational and financial data can solar project owners identify correlations across the entire business. This would not be possible without digitalising across multiple business functionalities and drawing data from each into one place.

During Covid-19 communication through digital platforms has become more important as portfolios consolidate and partnerships between geographically diverse organisations move ahead. Digitalisation is key not just for maintaining day-to-day plant operations but also for broader inter-organisational processes and activities.

And what would you say the main challenges are in this process?

That depends on the maturity of the market and the people who are engaged in these operations in our industry. Of course, regulatory and political will are sometimes a problem, but it really depends on who you are talking to. One asset manager may say that digital tools are a ‘nice-to-have’ whereas another could say that digital tools are absolutely essential to their everyday tasks.

As you move up the business hierarchy, the overview and priorities of decision-makers shift. Executives and investors at the top of the company might think that continued portfolio growth means that operations are running smoothly. But because they lack overview of their data systems, they are frequently unaware of issues and inefficiencies which are reducing their returns. It’s due to situations like these that many solar portfolios lack effective digital systems as executives don’t understand the benefits that they can realise by digitalising operations and processes.

The objectives of top management usually focus on growing and expanding into new markets, though this does depend on a number of factors such as geographic locality and the appetite of their investors. Generally, less focus is given to identifying areas where costs can be saved, processes streamlined, and teams managed more effectively. Inefficiencies can easily spring up in a number of business areas as a result.

However, in more mature markets this is often less of a problem due to the fewer domestic growth opportunities. We have seen more solar project owners looking to maximise their efficiency through new digital tools.

One example of this would be community solar where digitalisation has enabled data to be collected from smart meters - which the market didn’t have 5-10 years ago. That data is based on what you have produced and what you are selling to the community. Then you have to associate that with hundreds or thousands of PPAs that you have in the community. This process can now be digitalised and automated.

Another thing which is emerging now in the US is the tax equity process where players invest in renewables and get the money back from the tax they have to pay. These more complex financial transactions can be done manually but companies are beginning to digitalise this process.

How can technology help solar to better integrate into the grid?

In a number of different ways but it can depend on the stability of the grid in the market and the penetration of solar and other forms of renewable energy in the mix. We have seen problems arising in each of these different scenarios. In some cases, the problem lies in the fact that independent power producers (IPP) cannot always integrate the electricity they generate with the grid when energy supply outstrips demand. Digitalisation can help mitigate this issue through forecasting and the development of energy storage options.

In addition, if IPPs are also selling to corporates then digitalisation can be used to calculate when households or organisations need more power, along with how routines can be changed to ensure that organisations can continue to be supplied with electricity. Digitalisation is not just about operations and management or asset managers, but also about grid management. Using digital technologies to manage data and work out when and how much power you can send to the grid is therefore very important.

In Asia, particularly Vietnam, we see a lot of solar curtailment which is a big issue for investors, especially when it exceeds the estimated figures companies have prepared for in their business plan. In Vietnam for example more than 50 percent of the power they produce has been curtailed at times. When this occurs forecasting electricity demand is vital to helping solar project owners optimise revenue and perform maintenance whilst assets are curtailed. Solar projects can also use digital technologies to accurately measure how much you are curtailing and how much you are actually producing, which can be very hard to do manually.

Another example would be Greece where they are trying to implement virtual net metering. This will identify where there is greater electricity demand and allow energy producers to sell electricity specifically to where the demand is - even if it is on the other side of the country. There are a vast amount of opportunities for technology to help balance the grid and solve curtailment issues.

In what ways is the experience with digitalising solar different to wind?

Alectris mainly focus on the solar market but from my understanding, it’s harder to forecast wind than solar as it’s less linear. From what I hear, digitalisation in the wind sector is way ahead of the solar sector. When you go to a wind farm, data is usually collected from SCADA. In the solar industry, the role of asset managers is becoming increasingly important, managing operations and maintenance, service providers and so forth. Further digital innovation is needed to reach the level of sophistication required to effectively manage all of this data.

As far as I am aware, the useful operational life of solar assets used to be around 25 years. Is it now possible to extend that with technology and by how much?

Yes, the recognised useful operational life of solar has been recently extended to 35 years. This is happening because equipment and other solar module components are much more reliable than they used to be. It is a similar situation in the automobile market with contemporary cars now more reliable than they were 10-15 years ago. There has been a lot of improvement in the reliability of solar component parts and as such, the lifetime of an operational system has naturally extended.

With increasing technology, what will the solar sector look like in, say, ten years time?

I think that in ten years more sophisticated digital technologies will have been implemented. Ten years ago service providers were the most important part of the operations and maintenance equation, particularly around solar. Now we see this role shifting towards the asset managers as portfolios and projects grow in scale. In Asia, Australia and the US the market is now seeing the development of solar plants with over 300MW of capacity and we expect this trend to continue as developers take advantage of the falling costs of solar along with economies of scale. We will also see an increase in the size of solar modules and equipment, with manufacturers currently producing panels of 480 kilowatts compared to 120 kilowatts ten years ago. It is possible that the role of the OEM service provider will become less important as asset managers play a larger role in line with this trend.

I think that we are also likely to see further portfolio consolidation and digitalisation will definitely increase in importance as this shift continues. With this in mind O&M and asset management teams may correspondingly reduce in size as many tasks become automated, providing an opportunity for large organisations to cut costs.

Due to the extension of solar asset lifetimes, the industry will have a greater focus on repowering and revamping solar assets. For investors interested in acquiring large plants with extended permits for licensing, the data and asset management of solar plants will become more important. To ensure maximum returns, solar project owners will need to digitalise, consolidate and centralise operations whilst also paying close attention to the evolving market environment to prepare for fluctuations in demand.

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