As part of our support for #EarthDay, we spoke to the founders of our cleantech portfolio companies to get their perspectives on what it means to innovate in this space, and their thoughts about the future.
SyndicateRoom: In a few sentences, tell us what Powervault does.
Joe Warren: Powervault makes smart home energy storage devices (based on batteries) that allow customers to store the excess electricity generated by their rooftop solar PV in the day, as well as low cost renewable energy from the grid, to use at home when the sun is not shining or the wind is not blowing.
SR: Tell us more about why developing cleantech is important and what other businesses can learn from what you’re doing?
JW: As a country we have committed to reach net zero emissions by 2050. To do this we are going to need to decarbonise not only electricity, but also to shift most of our transport and heating energy usage from fossil fuels such as petrol and natural gas over to electricity. This transition will double or triple the amount of electricity that we consume. We are going to need to make sure that this electricity is zero carbon. We are also going to need to manage the pressure that this places on the electricity networks – both from renewable energy generating at the wrong time and from the increased power usage by electric vehicles. Smart home energy storage is one of a number of clean technologies, particularly in the smart grid sector, which can help to address these challenges.
Powervault offers its customers a way to take a key step on the journey to net zero. Many businesses are also taking these steps and we think that our products can help not only domestic customers but also small businesses on their journey to net zero.
SR: What trends or developments in the cleantech space are you most excited about and why?
JW: More and more homeowners are thinking about how they can reduce their carbon footprint and beginning to act. There are lots of exciting new technologies to help people do this, and smart home energy storage is one of these. With such new technologies and the roll out of second generation smart meters that enable electricity suppliers to adjust the price of electricity every half hour in line with its carbon intensity, people can take much more control of their energy usage.
One challenge is that we are now starting to see the local “distribution” networks stretched to capacity and it is harder for homeowners to connect all the solar PV that they would like to the network. Another is that during the COVID pandemic we have seen national challenges managing supply and demand of energy with record payments made to turn off wind farms because there is too much electricity generated and nowhere for it to go. Of course, this has resulted partly from low demand but it potentially provides a glimpse of the future when there will be more renewable generation connected. Many smart grid technologies, including energy storage, have a key role to play in addressing these issues.
SR: What do you think we’ll see in the next 5-10 years within these sectors?
JW: I think we are going to see continued growth in renewable energy connection, and the connection of electric vehicles and electric heat in peoples’ homes, resulting in increased pressure on the networks. This will lead to increased volatility in the prices. I hope that we will see smartmeters and flexible electricity tariffs come into their own – providing an incentive for consumers to use smart technology to help use cheap low carbon electricity from renewables.
SR: What do you consider the main impediments to widespread advances in clean technologies globally, and what steps can businesses and ordinary people take to mitigate them?
JW: The main impediments to widespread advances in clean technologies are Government policy and some of the established policies from incumbents. For example in the UK, one of the campaigns we have been running recently is for Government to reduce VAT on small scale energy storage. At the moment VAT for our products is 20% which is crazy when you consider that the VAT on coal and gas, and electricity generated from fossil fuels is 5%! This sends completely the wrong message to consumers.
As a country the UK has a fantastic opportunity to develop clean technologies. What we need is a UK market which is supportive and highly conducive to nurture these technologies, promoting economic growth, UK jobs and export opportunities. Energy storage has to date received no support from Government policy. The electricity market is very complicated. Change takes a long time and there are many established policies which can act to slow down the uptake of renewable energy technologies. For example, it can still be challenging to get permission to connect clean energy technologies to the network. We have made great progress deploying smart meters, however the market mechanisms to fully enable the power of these meters are not widely adopted.
SR: What differences do you feel your business specifically will make to the larger landscape of environmental responsibility, renewable energy or sustainability?
JW: Our vision is for 100,000s of Powervault systems to be deployed, storing renewable energy which would otherwise go to waste and enabling people to use clean energy to power their homes and cars 24/7, not just when the sun is shining. Because of their inbuilt intelligence, these Powervaults will play a key role in supporting the flexibility of the grid acting as a “virtual powerplant”, storing surplus renewable energy on windy and sunny days so it can be used in the evening to reduce the daily evening peak demand and thus the number of carbon intensive power stations that have to be fired up.
SR: What advice would you give to young entrepreneurs looking to start businesses in the cleantech space?
I think we will see an exciting transformation in the electricity sector over the next twenty years and it will be a fascinating industry to be a part of. It is hard to start a business that is trying to change the status quo. I would encourage young entrepreneurs to have the courage of their convictions and not be dissuaded by the challenges that they will face. There will be lots of new market opportunities – listen to what problems need to be overcome, and then persevere and develop solutions that people want. And inertia means it will nearly always take longer than you think it should, so perseverance is crucial!
SR: How important is investment to the success of cleantech businesses, and what single argument would you make to encourage investors to consider investment in this area?
JW: Investment is critical to the success of cleantech businesses and Powervault would not exist without it. Indeed the transformation to net zero will only succeed if it can attract investors. As time goes by focus seems to be shifting more and more to divestment in fossil fuels and investment in cleantech.
The journey to net zero is the greatest challenge for the world in the 21st century. That surely makes cleantech the greatest investment opportunity.
Joe Warren is Managing Director of Powervault - a manufacturer of home energy storage products which help consumers to store and use renewable energy to reduce their emissions. With fourteen years working in the smart grid sector, Joe previously worked for Open Energi, helping to bring their smart grid dynamic demand product from concept to commercial reality and helping to create a smart grid new market. Joe managed Open Energi’s relationship with the UK's National Grid over a period of seven years and agreed the first ever Dynamic Demand contract for demand side Firm Frequency Response, securing contracts with National Grid and Sainsbury’s. Joe joined Powervault in 2014 as Managing Director. Joe previously worked as Director of Hosting Operations at Pipex Plc looking after datacentre and power infrastructure. Joe holds a BA in Experimental Psychology from Oxford University and an MBA from INSEAD.
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