Elena Bou is innovation director at KIC InnoEnergy, the European company dedicated to promoting innovation, entrepreneurship and education in the sustainable energy field by bringing together academics, businesses and research institutes. She writes:
Like so many industries, change in the energy market is rapid and hard to predict. So much so that in just five years the sector has morphed into a completely unrecognisable entity.
In the same way that Uber and Airbnb have turned their industries upside down – redefining what consumers expect from taxis or accommodation – new players are challenging the status quo in the energy market. Take Tesla – having shaken up the automotive industry it is now forging new ground within energy.
There is no escaping this change. Technology is revolutionising markets of all kinds all over the world – and the energy industry is no different. As consumers engage more with those they do business with, they come to expect more. They want better service and even for firms to serve a purpose beyond profits. To deliver on the bottom line, energy companies must first adapt to deliver new kinds of value.
Of course it’s all very well knowing that you need to innovate, but it’s easier said than done. Think of it this way: have you ever seen an elephant dance? It’s hard to move a body that big in an agile fashion, making swift turns and pivoting into a new direction. The same applies for large corporations. Legacy systems and established processes that have proved effective over years – even decades – of operation make it difficult to be fleet of foot, reacting quickly to changes in the landscape.
This makes the transition a little scary for traditional energy companies. But they have to make the leap. Today’s business models will die in tomorrow’s world. Survival will come from collaboration – from start-ups and high growth companies working with sector veterans to seek answers to questions around energy consumption, storage and behaviour that will only become more complex and challenging.
Partnering for prosperity
It can sometimes feel like entrepreneurs and the energy industry inhabit very different worlds. Entrepreneurs are posing the right questions and seeking answers to solve society’s challenges. The energy industry recognises the imperative to innovate, but at the same time is under pressure to increase profits and avoid risk.
Yet whilst they might be at opposite ends of the scale, entrepreneurs and energy companies are entirely complementary. After all, business creation is all about ‘super teams’ that combine the right competencies, skills and contacts to turn a really good idea into a commercial reality.
Entrepreneurs bring the creativity and are agile, flexible and talented, but they need help with technology development, funding and to find their first customer. Because as we all know, proof of concept happens in the market – not in the lab.
For their part, energy companies own the customer base, expertise and resources to introduce innovations into the market place. It’s the perfect match. What’s more, this collaboration between companies large and small is the key to creating a sustainable energy future and finding solutions to the complex energy challenges we face – such as the intermittence of renewables, limitations of storage solutions, securing the supply of energy, and decreasing GHG emissions. No one individual or company can tackle the complex challenges Europe faces alone. We cannot be dogmatic in our approach, we need to take a much more holistic view and consider everything together – people, cost and environmental challenges. Success underpinned by the development of sustainable energy solutions will come from everyone working together.
Finding these partnerships isn’t always easy: entrepreneurs don’t know where to connect with the right industry partners and energy companies don’t know how to identify the start-ups that have the answer to their problems and with the most potential for commercial returns. That’s where KIC InnoEnergy comes in. As the hub for Europe’s brightest start-ups, we’re helping small and large companies join forces as they seek to tackle the same common goal: a better tomorrow.
Fostering these partnerships is a key part of our mission, and is exactly why we created The Business Booster: the event where innovative entrepreneurs meet industry institutions. For two days in October we brought big-name energy corporations, start-ups and venture capitalists together to explore future collaboration and create a sustainable future. Our 104 exhibitors and 215 delegates represented both start-ups and key industry players including ABB, Alliander, EDF, RWE, Stedin and Total – from 18 countries.
During the numerous panel events we hosted, attendees were in agreement: innovation is difficult and collaboration between big business and inventive entrepreneurs is key to a successful energy transition. And the success of this transition is critical – our way of living is based on energy. Our society’s wellbeing depends on energy. We want it to be affordable and green.
The challenge is far too big for any of us to tackle alone. Even the biggest elephants are dwarfed by its sheer scale. Only by working together can the industry adapt and learn how to dance across whatever the landscape looks like five years from now.