Q&A: David Maguire, Founder Director, BNRG Renewable
Published 10th May 2021
By Sarah Casey, Portfolio Director, Climate Council
David Maguire is a solar industry veteran, longtime environmentalist, Founder and Executive Chairman at BNRG, Chairman of the Irish Solar Energy Association (ISEA) and a founding member of the Alliance for Affordable Solar Energy (AFASE). An experience that has embedded a deep knowledge of the European and United States renewable markets.
Sarah Casey, portfolio director at the Climate Council, approached David for his insightful perspective on how renewables developers are maximising their rapidly expanding opportunities across the EU, US and Australia.
- BNRG have built 33 projects in the US since entering the market in 2016, how do you see the market dynamics there changing under the Biden administration?
That is a question I hear a lot recently. Fundamentally many individual States in the US have done a great deal to promote the deployment of renewables, mainly by setting high Renewable Energy Portfolio Standards (REPS). However, the Federal Government can play a massive role. The US re-joining the Paris Agreement was a watershed moment and signifies the return to the US taking a leading role in Climate Change on the Global Stage again. I expect several measures to be introduced by the Biden Administration that will positively impact on the renewable sector in the US. This will include the extension of the ITC tax support for renewables and battery storage, an improvement to the administration of the ITC, support for indigenous US business in this space, improved access to grid via the FERC, encouragement of State legislatures to implement REPS etc. I hope to see the removal of trade barriers and tariffs on solar to the US.
- What advice would you give to other developers looking to enter the US market?
The US must be looked at as multiple markets (similar to Europe), each State has a different approach and set of rules. Consider the individual markets or States that you wish to participate in. Be aware that the US is multi-layered in terms of Local or County, State and Federal rules and regulations when it comes to permitting. Each County and State is different. Be aware that the rules that give access to the grid differ from State to State and there are highly regulated and less regulated jurisdictions. While the US is very pro-business the cost of business is high, transactional, and legal costs are significantly more that in Europe or elsewhere. The cost of construction is considerably more than in other markets and this must be factored into your calculations. Finally, find a good local partner who know how to navigate the market.
- BNRG has operations in the US, UK, Europe, Australia but are there any emerging territories you think are hot spots at the moment for solar?
Regulatory uncertainty is the single biggest risk to this business and where territories remove or minimise this risk and provide more certainty, this is a suitable market for solar. Certainty is more important than Subsidy. LATAM is an established market and growing, APAC and the Middle East will see massive growth in the coming decade and finally Africa has massive untapped potential for solar as a primary source of electrical generation. All of these markets are not without their challenges. However, for BNRG we are very much focussed on OECD territories and are feel that North America, Europe and Australia will keep us busy for the next five years. Within these markets there are always new emerging hot spots.
- Today's average commercial solar panel converts 17-19% of the energy to electricity, up from 12% just 10 years ago. Are there any exciting technological developments or new technologies you have seen recently that will further improve this?
This is an area that experiences year on year efficiency improvements and with mono PERC, 20% to 22% efficiency has become the norm. bifacial modules have dramatically improved yield and have become industry standard for utility projects in the last year. Larger wafers and thus, larger modules mean that the standard watt class has increased to reach levels between 540 to 600watt class this year. This means significantly more capacity per m2. We will see the efficiency continuing to improve with multi-junction modules, the use of perovkite in hybrid cells, better coatings, and more efficient inverters. The continuing cost reduction of the cost of solar per kWhr is the cornerstone of deploying the lowest LCOE. Coupled with these increased efficiencies and cost trajectory, battery storage will be a game changer, where solar will have the lowest LCOE of any firm power on earth.
- Biodiversity is set to be a topic of focus at COP26 in Glasgow later this year, how do BNRG work with local land owners and communities to ensure biodiversity is a key consideration in projects?
BNRG looks at each project individually and assesses its potential to enhance biodiversity. Solar, if developed correctly can enhance biodiversity locally. It’s an opportunity to really improve the local ecological value if consideration is given to the existing ecosystem and species. Simple measures can be taken to manage the solar plant in a manner to enhance wildlife and increase biodiversity. Where appropriate we have implemented Ecological Management Plans for our projects that sit alongside our Operational and Maintenance Plan. Each site presents different opportunities and working with local communities and conservation NGOs you can really develop an approach that is a win for nature, the community and the asset owner or investor.
- Attracting institutional investors into renewables will be vital to mobilise large amounts of capital in the sector. How do you think institutional investors and IPPs can become more comfortable with each other?
This is a very capital-intensive business and its imperative that to drive down the LCOE more longer-term patient capital needs to be deployed directly into these assets and IPPs more rapidly. This is not easy as many of the IPPs and platforms are relatively small and diverse in geography and nature. There are many VC and PE firms that can assess the risk profile of early stage or pre-construction assets. They typically build up a position and then sell on the operational assets once they each a critical quantum to a drop-down fund or institutional capital. If institutional investors build up more knowledge in the sector with a small team, they could deploy that capital at an earlier stage and secure significant pipeline that would ensure deal-flow at a quantum that becomes far more interesting. Ideally investing in the right platform and resourcing that platform will deliver. IPPs need to become a little more sophisticated in the manner in which they do their business, robust corporate governance and the implementation of the right process will minimise risk in their business and allow the opportunity for institutional investment.
- Given issues around the grid being unable to handle increased renewables, do you think investment into energy storage should be prioritised over investment into energy generation?
There is growing investment in this space and battery storage is on a similar cost trajectory as solar PV. The level of investment in storage continues to grow rapidly and scale of the manufacturing is also growing exponentially leading to cost reduction. This will be the game changer for solar. It is not a case of prioritising one over the other, there is massive continual investment in both and in other technologies like hydrogen. If we are going to have any chance of success in keeping global temperature rise at or below 1.5 degrees, we must priorities all these technologies and others like carbon capture.