July 2, 2020: UK-based lead-acid energy storage developer Mega Amps has added a new strand to its business model with the announcement on June 29 that it would offer energy as a service to its customers, essentially organizing battery instalments from start to finish.
The company will aim its service, which it is calling ESaaS, at large-scale commercial and industrial customers, independent power producers, utilities and mines, particularly in developing countries, where the service could replace fossil fuel consumption and cost as little as $0.08-$0.15/kWh.
Tailored solutions would offer battery deployments alongside renewables like solar and wind, with different localized plans (payment per year, per kWh) replacing upfront capital expenditure.
“We have been considering changes to the traditional model of selling batteries as a commodity for quite some time, but the timing has never been better post Covid-19, where customers will be much more focused on cashflow and much more stringent in evaluating the projects they invest in,” said chief technological officer Neill Human.
“No one has managed to monetize energy storage as a service in a massive way and we believe we have found the key to unlocking this, by changing the way we perceive energy storage and positioning the model correctly as opposed to the technology that supports it.
“We have realized that we own a suite of technology solutions and know-how that places us in a position of managing batteries through a technology-propelled, asset-smart approach and by leveraging industry partnerships.”
Features of the Mega Amps service will include revenue stacking by application to leverage energy arbitrage and peak demand reduction and shifting, combined with renewable self-consumption optimization, says Human.
While the service the company offers will begin with offering lead-acid batteries, it will eventually be adaptable.
“Our strategy specifically makes use of lead-acid as a starting technology as our own version offers by far the highest NPV given capital outlay, performance, opportunity cost and average available capacity over the contract term,” says Human.
“We have purposefully designed a phased replacement strategy to optimize the economics of our initial capital outlay so that we future proof our model and retain the flexibility to be technology agnostic in the future, when alternative solutions will have in high probability be much more affordable between five and seven years from today.
“We have evaluated all the technologies we may have access to and by far lead-acid, when you know how to treat it and when you have advanced features, offers the best IRR [internal rate of return]. If an alternate value offer is available from an alternative chemistry and it makes sense within our model, we will integrate it.”
In February, Mega Amps entered its EQLYTE technology into the BCI annual innovation awards.
EQLYTE is a battery ancillary inserted at the manufacturing stage to optimize electrochemical hydrodynamics within flooded acid cells so the electrolyte can more actively respond to charge and discharge.
“Mega Amps is continually innovating and will continue to do so,” said Frank Pretorius, managing director. “The innovation entry has certainly brought us to the attention of the battery world. It is not our intention to monopolize any sector, but rather to drive the rapid expansion and deployment of electrical energy storage in tandem with our partners so that we end up materially affecting the planet and how it uses and stores energy for the better.”