There's no denying that energy prices are going up. The good news is, advancements in technology are making renewable energy more affordable. Now, this is a great deal for real estate who prioritizes sustainability via renewable energy.
You see, eco-friendly buildings are now a top priority for many investors and tenants. Moreover, governments are offering incentives to those that use green energy. Amidst all these, what real estates must focus on is - transformation in renewable energy storage.
For instance, geothermal energy is becoming increasingly prevalent. Also, the development of thermal storage tank technology has improved its business case, which has drawn interest from the real estate industry due to its potential to save energy in large commercial buildings.
Furthermore, this article will explore the scope of renewable energy storage and its application potential within your commercial portfolio.
Have a look!
Energy storage in commercial buildings: Effective systems and solutions
In both the US and Europe, investment and expansion in sustainable energy solutions are picking up speed. In fact, by the end of this decade, the European Green Deal shall invest €1 trillion in sustainable investments, and already, the US Biden administration committed to invest $370 billion in green energy technology back in 2022.
But, why such hype for this renewable storage system? Commercial real estate can already invest in traditional energy resources, right? This issue revolves around renewable storage. It will be difficult for real estates to transition to clean energy without utilising fossil fuels if they cannot find affordable and dependable ways to keep power on-site.
Hence, as a part of commercial real estate technology, let’s explore, what latest advancements available for renewable energy storage -
Battery Electricity Storage Systems (BES)
The lithium-ion battery (LIB), which has been available for purchase since the early 1990s, is the main use case for BESS technology. They are now 20% less expensive than they were in 2023, though, thanks to a remarkable advancement in technology over the past ten years. An inexpensive substitute is provided by the development of less expensive lithium-iron-phosphate batteries, which can be utilised in everything from commercial buildings to electric vehicles (EVs).
BES systems are designed to address the problem of intermittent renewable energy supply in commercial properties. When the sun isn't shining on solar panels or the wind isn't blowing on turbines, they provide an answer to the question of what keeps the lights on.
When renewable resources are plentiful, batteries can be charged from the grid; when supplies are scarce, they can be discharged. The size of the building and its reliance on renewable energy sources will determine how many batteries are used in commercial buildings.
Nonetheless, the biggest utility-scale batteries have a storage capacity of 10 MWh, which is sufficient to power 2,000 households!
However, when implementing LIBs, building managers' top worry is fire. Fire departments are receiving more callouts for battery fires, even though research and development is still being done to reduce the risk of battery failure and explosions. Gladly, the reliable ways to reduce the chance of emergencies and guarantee safer use are thorough maintenance and appropriate end-of-life recycling.
Thermal energy storage (TES)
Up to 40% of the energy used in a building is attributed to heat, ventilation, and air conditioning (HVAC) systems. By 2027, an additional 10 million ground-source heat pump (GSHP) units are anticipated to be deployed throughout the EU, demonstrating the growing commercial viability of geothermal energy generation!
TES works by collecting surplus heat from various sources, such as geothermal extraction and solar panels, and storing it in well insulated tanks so that it may be used throughout a building to support its HVAC system. This is referred to as sensible heat storage, and its main benefit is that it separates the need for heating and cooling from the power source.
From traditional water tank heating to molten salt storage, which entails heating liquid salt to 565°C, there are many practical uses for heat storage. Even though each of these technologies has unique applications, the market is still in its infancy and faces obstacles related to pricing and adoption.
The European Union is currently investigating ways to expedite the deployment of TES throughout the union and regulate the industry to guarantee uniformity and elevated safety requirements. When taken as a whole, these technologies could help decarbonise Europe's heating and cooling system.
On-site energy storage business case
Imagine being able to acquire a limitless supply of electricity for your CRE firm without having to connect to the national grid. Your site would be able to heat and cool itself while producing the energy needed to keep the lights and gadgets on, saving you and your renters from having to pay a monthly gas and power payment. The argument for on-site power storage is based on this concept.
It might be impossible to provide on-site storage on a scale that could support a portfolio. On-site energy storage, however, might become a reality sooner rather than later due to the quick development of technology and lawmakers' aim to decarbonise the built environment.
By ensuring that at least 80% of the bloc's energy is produced from renewable sources, the European Green Deal seeks to make Europe the first net-zero continent by 2050. The Commission released guidelines for its member states on sustainable energy storage adoption in 2023, suggesting increased funding for renewable energy projects and assisting companies by removing regulatory obstacles to the use of energy storage.
Below are some other trends around the world of renewable energy storage system -
Adoption of hydrogen in real estate
Innovation is pushing for the expansion of solutions that can power buildings in the most economical conditions as renewable energy storage becomes more and more feasible. Hydrogen is currently expected to appear in this area.
Although it has been proposed for decades as a solution to the world's energy production problems, it might finally have its moment now that the cost of producing green, low-carbon hydrogen is expected to be cut in half by 2030.
Trial cases in the real estate industry have focused on solar-powered hydrogen production, however they are few. A pilot project to construct hydrogen-absorbing alloy tanks that convert and store extra energy from solar panels was funded in 2023 by one of the biggest real estate companies in Japan.
Energy management with AI
With the advancement of cloud-based and Internet of Things sensor technology, building management systems (BMS) have significantly improved. The development of AI elevates this to a new level; its sophisticated algorithms are skilled at evaluating both past patterns and current data to optimize and fine-tune a building's energy usage.
Ranging from AI-based predictive maintenance to safeguard vital systems against unplanned downtime to demand response systems that modify lighting and temperature in response to room occupancy levels.
AI technology is further empowered to assist in comprehending building performance in a way that has never been possible before when combined with digital twin systems. As more companies become aware of its potential, energy management in CRE is expected to be disrupted.
Linked Cities & Smart Grids
Although "smart cities" may seem like something out of science fiction, they are actually much more common than you may think. In terms of IoT-led connectivity and smart city infrastructure, several US cities—including Austin, Seattle, and New York City—are setting the standard.
Smart grids have the potential to connect streets, neighbourhoods, and perhaps entire cities as proptech solutions advance and become more widely used. These have the ability to track and regulate all energy consumption and make the necessary adjustments to effectively satisfy end-user demands.
Demand from Tenants for Green-Certified Structures
Tenants are becoming increasingly energy-conscious in their lease decisions as a result of price fluctuations in the current unstable energy market. This is particularly true in the commercial sector, where low-carbon "green leases" have proliferated as renters look for sustainable office space to reduce their category 2 and 3 emissions.
In this future situation, benchmarking standards such as LEED and BREAAM will continue to be the gold standard. According to research, the open market rents for properties with these certificates can increase by up to 37%. Funding for projects with even small emission reductions is also more likely to go to real estate investment trusts (REITs). Smart money follows green certification as tenant demand for green-certified buildings increases.
Benefits from Availing Advanced Renewable Storage System
Reduction in Energy Expenses to Raise Property Value
Because they are less expensive to run, energy-efficient buildings are more worthy to stakeholders.
Solar-plus-storage can be used in a variety of ways to reduce energy use -
Chance to Fulfil Your ESG Goals
Today's market demands an environmental, social, and governance (ESG) strategy that benefits all parties involved in order to provide long-term value. This encompasses communities, workers, tenants, and investors.
Efforts to reduce carbon emissions might not always result in increased financial returns. However, as occupiers become more wary of homes with poor environmental performance, it will be crucial in maintaining asset value.
These assets will increase in value as more sustainable properties attract investors and occupiers. Solar for real estate is a simple ESG win because it lowers a building's carbon footprint and, when combined with battery storage, maximises energy utilisation for further ESG benefits.
Stay Up to Date With Property Guidelines
As global demand for clean energy increases, green techniques are being favoured more and more in building rules.
In fact, New York was the first state to formally forbid the use of natural gas for cooking and heating in certain new projects in an effort to lower carbon emissions.
In terms of electrification, properties with solar and storage are already ahead of the curve. They will be valuable for many years to come and will be in a good position to comply with future regulations.
Closing Thoughts…
Energy storage is now more feasible on a utility scale. All thanks to the quick development of geothermal technologies and battery technology. Indeed, implementing renewable energy is already beginning to benefit CRE organisations, not just in terms of their environmental objectives but also in terms of operational efficiency improvements that result in much lower energy expenses.
Furthermore, Proptech plays a critical role in facilitating the successful commercialization of this innovative technology. Moreover, demand response plans and renewable energy systems will give your estate more energy flexibility.
By installing all such renewable advancements, what you get is lower dependency on the grid. Hence, you can promote sustainability over the long run.
So, what are you waiting for? Install any of the above advanced renewable energy storage systems at your convenience, today!
FAQs
What is battery storage in renewable energy?
Battery storage, or battery energy storage systems (BESS), are devices that enable energy from renewables. This includes solar and wind, to be stored and then released when the power is needed most.
What is the best renewable energy source for homes?
Solar energy can generate all or the majority of a home's electricity needs, depending on the number of solar panels used, and can heat water as well. With ample sunlight, PV systems can harness energy in hot and cold climates.
What is the cheapest renewable energy source for real estate?
Solar and wind energy have continued to occupy the top spots in terms of the cheapest renewable energy sources. Both energy sources cost significantly less than fossil fuel alternatives and continue to become more affordable every year.
