This article looks at the five biggest utilities investment in energy technology startups accelerate innovation within the energy industry.
The emergence of startups has brought with it new technologies and business cases such artificial intelligence, machine learning and various advanced capabilities which are disrupting the energy sector.
The new technologies have not only allowed the discovery of new revenue streams but have also optimised the efficiency of existing grid and utility operations.
For instance, integrating AI and machine learning with online customer applications and utility websites has allowed consumer self service capabilities.
Such operations are helping to improve customer services as they reduce the time a utility would take to respond to a consumer query in a traditional manual process.
Consumers can now access their energy usage data without the involevemnt of utility staff, or even access a utility's outage map to know when they are likely to be affected, in the event load shedding or grid maintenance operations have been scheduled.
This has resulted in what is being named a 'smart utility' or utility of the future.
Startups are turning utility's energy transition goals a reality.
Their presence are simplifying the integration of distributed energy resources such as electric vehicles and clean energy soruces with the main grid.
By so doing, utilities are able to address growing energy demand during peak periods whilst drift away from convential energy generation.
For instance, in developed countries such as the US and in Europe, where carbon emissions reduction goals have been set and are heavily followed, technologies such as blockchain and advanced distributed energy resources management systems are helping expand utilities renewables portfolios.
Whilst a number of studies released over the past decade have pointed to utilities failure in the event they do not adopt new business cases and technologies, a number of energy providers in have since initiated collaboration with startups.
If not working together with startups to pilot new solutions within grid networks, utilities are investing in these small companies, taking over large shares or even own them.
The majority of utility involvements with startups has been in Europe and North America.
Here are examples of some of the big names involving themselves to expand the startups' industry:
1. German-headquartered multinational utility firm RWE has through its subsidiaries:
a. Innogy acquired grid-scale solar and storage technology startup Belectric as part of efforts to divert from coal power and customer defection to rooftop solar.
b. RWE New Ventures, a $144 million venture capital fund developed to invest in Silicon Valley Startups, acqured US clean tech firm KnGrid which promotes the shift from fossil fuels to renewable energy beginning with EVs.
c. Innogy New Ventures , in partnership with venture capital firm BootsrapsLabs, has invested in startups developing AI and machine learning-enabled energy technologies. The $5 million invested by Innogy allowed the utility access to to the venture capital firm’s AI technology expertise and global community of 40,000 Applied AI experts, entrepreneurs, and developers.
The two will focus on building the world’s largest AI community for the energy industry and provide startups with funding.
2. Italian multinational utility Enel was recognised by the European Commission's Startup Europe Partnership with the Corporate Startup Procurement award.
The award is given to 12 most active energy companies in the open innovation field.
Enel had evaluated 4,000 start-ups, invested with around 180 of the companies and globally scaled up its partnership with 50 of these startups.
b. Enel has in 2018 launched an innovation hub and lab in the Italian province of Catania to hosts startups researching and developing technologies including IoT, big data, automation, artificial intelligence and augmented reality.
Enel also acquired startups including Yousave, an Italian company active in the energy efficiency field.
3. Global Energy Startup Accelerator Free Electrons registered its first North American utility American Electric Power.
Nicholas K Akins, CEO at AEP, said: "Joining the Free Electrons accelerator programme gives us access to the world's most innovative technology entrepreneurs in the energy space.”
AEP joins eight utility members of Free Electrons including Ausnet Services (Australia), DEWA (Dubai), EDP (Portugal), ESB (Ireland), Innogy (Germany), Origin Energy (Australia), SP Group (Singapore) and Tokyo Electric Power (Japan).
By mid-2018, the Free Electrons initiative had registered 12 energy technology startups
4. Japanese utility Tokyo Electric Power joined the Energy Web Foundation to accelerate the deployment of blockchain technologt in the energy industry.
Established by US environmental agency Rocky Mountain Institute and blockchain startup Grid Singularity, EWF has members including Centrica plc, Elia, Engie, Royal Dutch Shell plc, Sempra Energy, SP Group, Statoil ASA, Stedin and TWL (Technical Works Ludwigshafen AG).
Hirokazu Yamaguchi, executive general manager of global innovation and investments at TEPCO, said:"We believe that blockchain technology has the potential to play a significant and critical role in the transition to a more secure, resilient, cost-effective, and low-carbon distributed energy paradigm, and that joining EWF will help us to offer new and improved services to TEPCO customers."
5. Energy Impact Partners, a consortium of utilities and venture capital firms investing in new companies shaping the energy landscape of the future, has invested billions of dollars in startups.
Recent investments include February 2019’s $15 million in series B funding in Remix, a company which developed a cloud-based platform to help cities manage their transportation systems.
Some of utility involvements with startups worth mentioning include:
The development of the Makerspace initiative by Canadian utility Nova Scotia Power, in partnership with Innovacorp. The initiative will ensure Cape Breton start-ups, entrepreneurs and students have a new place to grow their ideas, collaborate and bring innovative products to life.
Ameren announced its Accelerator programme in which the US utility is seeking for startups to partner with to make its energy grid smarter, more reliable, resilient and secure.
Startups seeking mentorship and funding can register at amerenaccelerator.com until the 24th of May.
Since its inception in 2017, more than 500 companies have applied for the programme.
American Electric Power also unveiled its illuminationLAB to identify innovative technology solutions that will improve business performance and enhance customer experiences.
illuminationLAB will also focus on enhancing the utility's grid optimisation; efficiency, operations and maintenance; and electric mobility/electrification.
Start-ups, entrepreneurs, and businesses interested in learning more can visit aepilluminationlab.com.