Right now we are seeing the market for solar storage has not really taken of yet. What is your explanation for that restraint within the market?
Well, it does not really surprise me would be the simple answer. If the government wants to incentivize people to take up electrical storage it needs to be a simple process. And from what I understand there are a number of procedural difficulties, that is number one. And number two let us not forget that solar storage is really an embryonic industry. So people are still getting used to the idea. Therefore it would be good for the government to carry on with the incentive program because to promote the adoption of storage.
While Germany is focusing on incentives for residential customers what would be the key drivers for the commercial segment? How do these segments differ?
Leclanché is positioned in both the residential and the industrial and commercial segments and I think in a decentralized grid system, which is I think the way that Germany is going, the use of energy storage will play a key role to optimize energy production and usage. Even though we do not exactly know what will happen to energy prices in the future, it is likely that socket prices will continue to increase, at least in Europe, where old fossil fuel generation is being replaced by green energy, including offshore wind which remains relatively costly, and in certain countries, by nuclear capacity. Also at the same time further continued investments are required in the network, all of which points to increased energy cost.
So if I were a residential customer in this country I would seriously consider storage to enhance the consumption of my personal generation. As an industrial customer I would probably ask myself what is going to happen if I do not use storage? In other words what is the avoided cost of deploying energy storage? Maybe I avoid building stand-by generation, or I enhance my security of supply or maybe I want to be more independent in terms of energy usage. So, you see, the economic questions for residential and commercial customers are quite different but in any event, as long as you have pressure on the grid and as long as you have rising energy prices, to be able to displace energy in time – which is what energy storage does – that is an immense benefit.
Regarding security standards the market is still behind, what needs to be changed here?
Today everybody does what he thinks is right. You can pick up ten different data-sheets and the chances are that they are all different and not consistent with one another. it is the manufacturers’ and probably also trade associations’ responsibility to come up with some sort of standardization. It is clear that customers – residential and industrial alike – would benefit from more clarity and some level of harmonized standardization would be beneficial, so we can all speak the same language!
Do you see clear advantages for the “established” battery manufacturers in the industry?
What I think is more important rather than the longevity of one particular market participant versus another are questions like: How reliable is the technology? Is your product differentiated? What are the superior qualities and benefits of your energy storage product? If you do not offer value at an affordable cost you do not deserve to survive. And here I am pretty confident that we are on the right path. We have an excellent product in terms of reliability, safety and cost and we also have market proximity with our own mass manufacturing facility in Germany. And last but not least: We are confident that we can manage the inevitable technology and price race.
Conducted by Daniel Pohl
Joseph Mangion (CEO) is an experienced senior executive with over 20 years of international, industrial, and operational experience at both the CFO/CEO level. Today, Joseph serves as Chief Executive Officer at Leclanché SA.
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