By Dmitry Zhdannikov

LONDON (Reuters) – Alex Beard is losing his thirst for oil.

Former Glencore (OTC) executive Alex Beard is raising funds to fund a network of strategically located battery sites in the UK to help the growing renewable energy sector.

Beard, a billionaire who left Glencore in 2019 said that his Adaptogen Capital investment firm would build storage capable of powering homes when the grid is not available.

Beard was the trading head at Glencore when he traded as high as 7% oil. He is now focusing on infrastructure support for renewables, which is another indication of how the wind is blowing for global energy.

I have the time to pursue a second career within energy markets. “It won’t oil and gas; it will be transition away carbon that will most relevant over the next 25 years,” he said to Reuters from his London offices on Regent Street.

Adaptogen Capital’s fundraising drive for funds comes as the United Kingdom’s oil and gas industry faces its most severe crisis in decades. Low gas supply globally has led to prices rising while wind and nuclear power struggled to keep up.

Beard is 54 years old. “The current crisis provides you with a glimpse of what we’ll be experiencing more and greater often,” he said. The key enabler in the energy transformation is batteries. They provide stability for when the grid goes down and give you the ability to use them as a backup.

Power grids become more important as economies shift away from fossil fuels. Governments and businesses are now looking to improve their resilience to prevent price volatility and supply disruptions that plagued power networks across the globe, from China to California.

Because the supply of renewable energy, such as wind and solar, can fluctuate depending on weather and when it rains or shines, the demand and peak times don’t always coincide with the availability of the resources. Battery storage is therefore a method to mitigate these fluctuations.

‘VOLATILITY BOX’

At the moment, the United Kingdom has 1.1 gigawatts (GW) of operational battery capacity to store power that can then be fed back into the grid when required. Another 15 GW capacity is currently under construction, or in the works. Most of this has been built by companies investing in renewable power assets.

Beard stated that Adaptogen’s 500 MW storage system will be powered by lithium-ion batteries. That would be enough to supply about 750,000 homes in the United Kingdom, according to a Reuters calculation based on National Grid (LON:) data.

According to the National Grid, if the country rapidly decarbonizes, then it would need 40 GW more storage capacity by 2050.

Beard said, “The entire world knows how to make renewables on a large scale. We now need enough storage to speed that transition towards net zero.”

Beard also stated that renewable power companies still have much to learn about and incorporate price volatility and trading into their business operations. These are the same risks that caused nine British energy suppliers to be unable to function as usual this month due to rising wholesale gas and power prices.

At the moment, renewable power companies rarely face spot price risks as they operate under government-guaranteed contracts, which has allowed them to stay competitive with fossil fuels, he said.

Beard spent most of his life trading, but the industry will need to learn how to better hedge volatility as renewable production increases and ends government support.

He said that batteries can be seen as an asset for wind and solar energy, and also as a volatile trading tool.

Battery response time to demand is milliseconds. It can also be performed by algorithmic programming to benefit from power market volatility.

Beard, who holds a stake of about 2% in Glencore worth $1.2 billion at current prices, has also co-sponsored Energy Transition Partners, a special purpose acquisition company (SPAC) listed in Amsterdam.

After going public, July saw the company raise 175million euros ($205 million). Now it is looking into targets within the electric vehicle and renewables sectors.

Beard believes that oil and gas will still play an important role in world energy supply, but renewables will expand faster than traditional fossil fuels. In the next few years hundreds of billions dollars will be invested in energy transition away carbon.

($1 = 1.1714 euros)