Oil prices crashed due to lack of demand and over supply brought by the global pandemic.
Will we see a resurgence, or will other forms of energy take over post-Covid?
What are some new innovations coming up despite these troubled times?
What is their impact on the future?
If we’re going to prevent more than a 2C rise in global temperature, we’re going to need innovation at scale. We hear a lot about deep tech/ R&D led investments in this space – for example, better energy storage solutions, carbon capture technologies, EV development and so on. Cleantech has traditionally delivered poor returns to VC investors because of these long development cycles, however, recently, considering the global movement towards climate action, there has been increase in investments in this space.
While hardware and deeptech innovation is necessary, we hear much less about business model innovation. At ENGIE Factory, we believe there’s a clear space for innovation in commercial and business models that deliver immediate value to customers and therefore, revenue and growth potential. Uncovering opportunities in this area can be difficult for first time entrepreneurs and those new to the energy sector, which is why we created the Venture Build program which does not require our founders to have any prior experience in energy. We then work closely with our founders, leveraging our knowledge of the sector, over a 12-week period to ideate, iterate, prototype and test ideas until we find an investment grade venture opportunity. Our portfolio companies, such as BillionBricks, Tablepointer, EVDots and SolarAI demonstrate that there is plenty of opportunity to solve real and immediate customer challenges, build exciting growth start-ups and contribute to the zero-carbon transition without significant R&D investment and long development timelines.
There is greater awareness for the need of alternate/green forms of energy. Irrespective of your views on it, the climate action movement last year led by Greta Thunburg, US Representative Alexandria Ocasio-Cortez’s green new deal show how young people, millennials (biggest component of the workforce) and gen-zers are aware and care about both global warming and the need for change. Big corporates are responding to this movement – RE100 companies for example, which include global blue chips like IKEA, Johnson & Johnson, Google, Accenture, AVIVA etc, have committed to sourcing their energy from 100% renewable sources by 2050.
There is news of cities with cleaner air, wildlife returning to urbanized areas.
How will energy consumption change post-Covid and what will be its impact?
I think it’s too soon to tell. Covid-19 is anticipated to have a massive effect on economic activity – Singapore is looking at its worst recession since independence. Contractions in the industrial sector, air travel, commuting and the use of offices will have an impact on energy consumption. As individuals become more cost conscious, this could also change consumption patterns at home as well.
Amidst the significant uncertainty, health and economic shocks of the pandemic, there is also a tremendous opportunity for us to imagine a different way of living and working. For example, the shift towards localization, the need for frequent regional travel and rethinking the function of a CBD. This could have a positive effect on energy reduction and start a conscious move towards green solutions and sustainability. I sincerely hope this opportunity is not lost.
How are corporate VCs, e.g. Engie Factory, helping to shape the road to a sustainable future?
The strength of corporate VCs lies in combining deep industry knowledge, resources, networks and access to customers with the agility, speed and focus of start-ups. Coming from the start-up world, I’ve found ENGIE Factory’s focus on the zero carbon themes of energy efficiency, green mobility, smart cities and renewable energy and sustainable and profitable growth very refreshing.
ENGIE Factory is an ecosystem builder, aiming to be Asia-Pacific’s hub for zero carbon transition. As mentioned above, the Venture Build program was created to solve a problem in the ecosystem – the barrier to entry for entrepreneurs who want to make a positive impact in decarbonization but have no background in sector. What is critical for us is to find the right founders to work with who understand the value proposition of working with a large corporate and share our values. At ENGIE Factory, we look to balance growth with strategic benefit for the wider ENGIE group and, most importantly, the benefit for the planet and society.
Contributor: Marie Cheong
VP Venture Build, ENGIE Factory
Author: Dharun Janarthanan
Project Associate, ExpertConnect Asia