EXCLUSIVE The king of oil bets on batteries for a green world

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  • Beard’s fund will invest in UK battery storage
  • Batteries can reduce shock and help power trading
  • Britain is facing an energy crisis
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LONDON, Sep 30 (Businesshala) – Alex Beard’s thirst for oil is waning.

Former executive of Glencore (GLEN.L), once one of the world’s most powerful oil traders, is now raising funds to build a portfolio of strategic battery sites in the United Kingdom to support the renewable energy industry.

In his first interview since leaving the commodities giant in 2019, billionaire Beard said his Adaptogen Capital Investment Fund plans to build storage with a capacity of at least 500 megawatts (MW) to power homes when grid supply is low Is.

In their heyday at Glencore, Beard’s team was trading 7% of the world’s oil. The fact that it is turning to infrastructure to support renewable energy is another sign that the wind is blowing for the global energy industry.

“I have time for a second career in the energy markets. It will not be oil and gas, but it will be the transition away from carbon that will be most relevant for the next 25 years,” he told Businesshala in his offices off Regent Street. in London.

adaptogen Capital’s fund-raising campaign comes at a time when the United Kingdom’s energy industry is facing its worst Difficulty for decades. A perfect storm of low gas supplies globally has driven up prices, while wind and nuclear power have been unable to cope with the slowdown.

“The current crisis gives you a taste of what we will experience more and more often,” said Beard, who is 54. “The battery gives you stability when the grid becomes unstable and is an important enabling asset in the energy transition.”

As economies move away from fossil fuels, power grids are becoming increasingly important and governments and companies are noticing the supply shortfalls affecting networks from China to California over the past year. And how to make them more resilient to avoid price volatility.

The supply of renewable energy like wind and solar can fluctuate wildly depending on the season and peaks and troughs don’t have to match demand, hence battery storage as a way to help cushion shock over the long term. is seen.

‘volatility box’

Currently, the United Kingdom has 1.1 gigawatts (GW) of operational battery capacity to store electricity that can be fed back into the grid when needed. An additional 15 GW of capacity is under construction or is being planned, much of it being invested by companies in renewable energy assets.

Beard said the Adaptogen’s 500 megawatts of storage will use lithium-ion battery technology. This would be enough to supply about 750,000 homes in the United Kingdom, according to Businesshala calculations based on National Grid data.

National Grid has estimated that in a scenario where the country decarbonises rapidly, it could need more than 40 GW of storage capacity by 2050.

“The world has learned to build renewable energy on a large scale, and now we need to build enough storage to make that transition to net zero,” Beard said.

He also said that renewable energy companies have a long way to go in fully understanding and integrating business and price volatility into their operations – the kind of risk That has dropped nine energy suppliers in the UK this month as wholesale electricity and gas prices climb.

At the moment, renewable energy companies rarely face spot price risk because they operate under government-guaranteed contracts, which have allowed them to remain competitive with fossil fuels, he said.

But as renewable production increases and government price support ends, the green energy industry will face a steep learning curve in understanding how to best prevent price volatility, said Beard, who Spent most of his career as a businessman.

“Batteries can also be seen as a volatility trading box for the green energy industry and an important asset to add to wind and solar generation,” he said.

The battery’s response to supply and demand takes milliseconds and can be executed by algorithmic software to take advantage of the volatility of the electricity market, unlike the analog instructions to increase output in a traditional fossil-fuel power plant.

Beard, which has a roughly 2% stake in Glencore for $1.2 billion at current prices, has also co-sponsored Energy Transition Partners (ENTPA.AS), a special purpose acquisition company (SPAC) listed in Amsterdam.

The Blanc Czech company raised 175 million euros ($205 million) when it went public in July and is looking at targets in the renewable, electric vehicle and storage asset sectors.

Beard says oil and gas will continue to play a significant role in the global energy supply, but renewables will grow rapidly and hundreds of billions of dollars will be spent on the energy transition away from carbon in the coming years.

($1 = 1.1714 euros)

Reporting by Dmitry Zhdannikov; Editing by David Clark

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