Investors, Entrepreneurs Upbeat On Energy Storage, China And The Internet Of Things

For the last 15 years, the Cleantech Forum has been organized by the Cleantech Group. Most recently it took place in San Francisco on January 25-27, 2016. Energy storage, China and the Internet of Things (IoT) were key topics at the forum, with investors and entrepreneurs confident on their respective futures.

Energy storage, in particular, was keenly discussed, with Vic Shao, CEO at Green Charge Networks, predicting “2016 will be the year of deployment for storage.” Anticipation around storage deployment has been gathering for a few years now. In 2014, Navigant Research predicted that worldwide revenue from energy storage would increase from $675 million in 2014 to $15.6 billion in 2024. Last year, Deutsche Bank reported that technological advancement could make energy storage a solution that could be deployed on a large scale within the next five years.

Andrew Beebe, Managing Director at Obvious Ventures, sees similarities between energy storage today and solar energy a decade ago. “Energy storage is just like solar panels were 10 years ago. We are at an early stage of that process, but what we are about to see in storage is what solar did a few years ago,” says Beebe.

While Silicon Valley has been the driving force behind major breakthroughs in storage technology, the development of energy storage has also been moving forward north of the border.

Canada’s largest province has been building up its energy storage system.

For the past few years, Canada’s largest province (similar to a state), Ontario, has been building up its energy storage system. Strong interest from Ontario’s utility sector and a supportive ecosystem for cleantech, developed by both the national and provincial governments, have enabled Ontario to establish a lead in energy storage.

Tom Rand, Managing Partner at ArcTern Ventures, agreed that while energy storage technology is developing well, more work still remains in understanding the characteristics of this new asset. “We’ve established a lead in technology, and are now working to develop operational capacity and awareness in our utility sector,” says Rand.

Toronto-based NRStor, an energy storage project developer, and Hydrostor are two examples of energy storage development in Ontario. Last year, NRStor partnered with Tesla to bring the Powerwall Home Battery to Canada. Likewise, Hydrostor, one of the beneficiaries of the privately backed ArcTern’s investment, is partnering with Toronto Hydro, a municipal electricity distribution company, to develop underwater batteries.

Entrepreneurs keen on Chinese cleantech market, with “partnerships” being critical for business

Lately, China has witnessed major policy developments related to climate change and clean energy. The U.S.-China Climate Agreement, Chinese President Xi Jinping’s announcement of a cap-and-trade system and a leaner and greener five-year plan have created a new model of economic development, which could not only curb energy usage, but also provide opportunities for cleantech entrepreneurs.

Alex Shoer, CEO at Seeder, is one such entrepreneur who is looking to address energy efficiency in buildings. His company provides a marketplace that connects commercial building managers with green technologies for retrofits, as well as the capital to pay for it.

“There’s a huge amount of development, but while there are mandates in terms of efficiency targets and sustainability in buildings, there’s a knowledge and access gap between available solutions, qualified providers and financing options,” says Shoer.

But while Shoer has successfully started operating in China, he points out that entrepreneurs looking to enter the Chinese market need to pay special consideration to building partnerships and relationships.

“In China and in many other developing countries, trust is the most important thing. It takes time and persistence to develop these ‘trust’ relationships, but one way to speed up the process is to work with, or work through, an existing trusted party or marketplace already on the ground,” he says.

The unique nature of doing business in China requires a collective approach to building relationships and trust.

Leo Zhang, Senior Analyst at Cleantech Group, echoes Shoer’s sentiment. He emphasizes that finding the right partner also can help entrepreneurs navigate and enter the market, especially when companies have no presence in China.

“China is heavily relationship-driven, so having local partners will open lots of doors, rather than going into it blindly by yourself. A partner can provide their infrastructure to scale-up the technology, or can be the pilot program to test your product,” says Zhang.

The unique nature of doing business in China requires a collective approach to building relationships and trust. Albin Jourda, founder of French Cleantech, says that French companies are working together to establish these partnerships in China.

“Building partnerships is one of the main challenges French companies may face in China. For this reason, the UMO (Union de Maîtrise d’œuvre), which is a group of six French companies, worked together and signed agreements for a period of 5 years with the city of Chengdu,” says Jourda

Internet of Things (IoT) improves resource efficiency and creates positive impacts

The potential for IoT solutions to be deployed in the energy landscape has created opportunities to drive efficiencies, increase productivity and promote economic growth. Joe Costello, CEO at Enlighted, whose company was named in the 2015 Global Cleantech 100 and also won the North American Company of the Year award, believes that IoT is not only good for the environment and reducing costs, but also for creating new innovative tools for doing business.

“Our clients who use the sensor technology save 50 to 75% of their energy costs,” says Costello, who was named the top American CEO in 1997 by Chief Executive Magazine. Enlighted’s client list includes Google, LinkedIn and HP.

Even for large companies, IoT is gaining importance and being incorporated into their daily business activities.

Costello, does, however, point out that the capital-intensive aspect of implementing sensor technology has hindered growth. To accommodate this, Enlighted created an innovative financing model for its customers. “This type of technology does require a large amount of capital. Small companies would require around $10 million, and large companies $100 million to implement our system. This was our biggest constraint to growth; so we put all the money down for our customers, and they pay us back from the energy savings that the system provides,” he explains.

Through their innovative financing model, called GEO, Enlighted customers receive full energy benefits and have a sensor network that enables them to optimize commercial space with zero upfront cost.

Even for large companies, IoT is gaining importance and being incorporated into their daily business activities. IBM, a company well-known to reshape itself, has made IoT “a major priority” for its business as the company continues to focus on its key growth initiatives.

“IoT is a major priority for IBM, and is one of the new businesses that we have created as the company continues to innovate. IoT holds out the promise of more granular monitoring and optimization of process performance in just about any context — therefore, it will become integral to resource efficiency as one aspect of performance,” says Peter Williams, Chief Technology Officer, Big Green Innovations, at IBM.

Aside from IBM’s business activities, the company is utilizing the benefits of IoT to improve daily operations within its buildings, manufacturing and, in particular, its data centers. “IBM is a heavy user of IoT in our buildings, manufacturing and in particular in our data centers, to optimize HVAC loads and building performance,” Williams adds.

The benefits of IoT also stretch beyond advanced economies and, perhaps, create a greater impact. In Africa, the IoT is enabling customers to leapfrog over the conventional electricity grid and go straight to “mobile power” — in a similar way that they have already leapfrogged over conventional telecommunications grids to mobile communications.

At the forefront, Jesse Moore, CEO at M-KOPA Solar, is using IoT for solar system metering and performance management, and his company has connected solar power to more than 300,000 homes in East Africa.

“What’s exciting and perhaps unexpected is the fact that IoT is enabling low-income, off-grid customers to leapfrog straight to solar power,” says Moore.

Moore continues to highlight how the multidimensional nature of IoT is also providing ways to improve customer service.

“Data coming back from our solar systems tells us when a customer’s rooftop panel is in the shade, so we can advise them to move it to a better location. To be able to remotely support customers in remote and rural parts of East Africa is a magical thing!” he says, regarding the additional benefits of IoT.