Renewable Energy Manifesto 2019–2020

Phillip Bruner

If you work in renewable energy like I do, then you could at times feel like you’re just rearranging chairs on the deck of the Titanic. In other industries the prospect of impending global catastrophe is probably not mentioned in the employee handbook. But in our industry, the problems we’re working to solve in the form of climate change and environmental destruction aren’t merely commercial, they’re existential. That’s pretty unique.

Facing down existential threats in your profession is surely character building. Over the last ten years or so working alongside colleagues near and far, I’ve found we all tend to share a ‘culture of concern’ where the welfare of people and planet is at least as important as profit for the majority of us. This is special and it’s good for morale. It also differs from the culture of competition that has been the hallmark of our predecessors’ endeavours. In the past, culture has proven to be a powerful driver of social change. It’s something we must get right if we’re going to rally the best and brightest minds to help build a future that is prosperous and sustainable for all.

For me 2019 marks a decade in this incredibly exciting and at times incredibly frustrating industry. Throughout that time, I’ve had the pleasure of sharing ideas with talented, passionate colleagues from every point in the value chain — many of whom are cautiously optimistic about a fossil-free future. Paris Accords and economic forecasts aside, it will ultimately be cultural change that will (or won’t) drive the fundamental shifts we must make as a species in order to transition to an era of sustainable progress. Here are a few thoughts about what we as renewable energy practitioners can do to help facilitate and accelerate that change:

(1) Co-operate then decentralize: whether you’re building off-grid solar, installing EV charging stations or designing the next blockchain-enabled renewable energy trading platform, we’re all in the same game. We all need a distributed, intelligent system that delivers low carbon energy optimally and meets our business’ goals. That reality — the reality of intermittency in renewables — means that far from competing with each other, we need to co-operate. In fact, we need to do more than co-operate, we need to think cooperatively. Think of co-operation as a principle of product design: if your tariff-selection algo for the flexibility market is one of many that allows a customer to switch automatically, then it’s in your interests to open source your code on Github and get the community involved early on, i.e. before you release anything. Don’t assume you’re first or best. Open source can help you identify where your idea fits or doesn’t fit with those that have already been trialled by others. You can worry about competition after you’ve got a UX that allows your grandmother to use the app intuitively. She shouldn’t need to understand anything about peak demand or your revolutionary grid-edge SaaS to log-in and start saving.

The same goes for energy trading platforms. If you haven’t done a deep-dive into the competitor landscape and/or don’t have a clear use case for the mass market, then arguably your blockchain solution is just going to add unnecessary complexity to OUR next generation energy system. So, before you dub yourself the next LO3 or decide to skip your venture round (because ICO investors are way easier than VCs) make sure your solution is UX-driven, customer-validated and solving a real problem. If, on delving further into your analysis, you discover that some other start-up is further along than you are, why not team up rather than venturing out on your own? Start-ups love to partner and there is almost always equity on the table.

(2) Customers > users: if your business is web software (as ours is), then you’re under pressure to demonstrate rapid traction so that you can bolster those SaaS metrics and start modelling 10–20x returns. ‘Fail fast’ is the mantra. Securing product-market fit is the goal. Agile is the method and so on. While you ultimately want people to pay for your product right away, you’re usually obliged to offer a free trial first. This is a win-win. Those early sign-ups yield data points of pure gold that investors need and love — and besides, digital products are easy to demo. You may even decide to offer some of your core features for free with no strings attached. You’ll soon be on your way to a 3:1 LTV:CAC ratio and high gross margins, with the inevitable result being seed funding from a fast-moving impact-driven venture fund.

This Silicon Valley ‘Lean Start-up’ methodology has become so deeply engrained in our minds that to question it borders on sacrilege. Getting an MVP out there as soon as possible and garnering that user feedback is essential, am I right? There’s just one problem — who exactly are you calling a ‘user?’

The Lean Start-up method for building and scaling digital products has many admirable traits that founders would be foolish not to follow. But along with Valley-wisdom, comes Valley-culture, which typically means treating customers as mindless dopamine addicts who will eagerly trade their very personal and valuable data for just another hit of your irresistible app (i.e. ‘users’). A customer on the other hand is a complex personality, with actual needs, wants and goals — someone worthy of respect and reciprocity. In the early stages of building a start-up a customer is so often a friend or former colleague and in the renewable energy business a customer can be even more — an ally, a teacher, a partner. Renewable energy customers share our culture of concern for the future of our planet. Even if some customers stay on your freemium package and never upgrade, you’re still capitalizing on their data. Is that transaction any less valid than a monetary one?

(3) Focus on impact: when we set out to build REIA (Renewable Energy Impact Analytics) back in 2014, Chris Nater and I were convinced that it would change the world. We thought that for sure, everyone in the energy market from institutional investors and pension funds to multinational power companies and government regulators would be excited about using our tool to compare their financial return against other socio-economic and environmental impact factors. REIA is an open source application for measuring the value of an asset according to financial, technical, socioeconomic and environmental factors. Once you start to play around with the weightings and examine the trade-offs, you quickly begin to grasp new insights about the real interrelationship between an asset and the stakeholders who enable it.

We were maybe a bit ahead of our time (most funds we pitched it to, told us they didn’t really care that much about impact). But as the project grew, we soon began to realize just how powerful impact can be for assessing value and perhaps more importantly, identifying hidden risks. Firms of the future that ignore impact will do so at their peril. Impact has costs and data is omnipresent. It’s only a matter of time before shareholders start asking for your triple bottom-line, regardless of what industry you’re in. Why not get out ahead of the market and start quantifying your impact now? It’ll inevitably save you time and probably money in the long run.

(4) ABL (Always Be Learning): if you haven’t seen Glenngary Glen Ross, then you won’t be familiar with the epic monologue that Alec Baldwin portrays in that deeply cynical (but also sadly realistic) portrayal of the hyper-masculine culture of salesmanship (and deceit) that has warped the business ethics of most of Wall Street and occasionally (e.g. in the case of Trump) main street. The infamous adage from that scene, is ABC or ‘Always Be Closing.’ If you’ll allow, I’d like to propose an alternative for renewable energy professionals and sales execs in our industry — one that may actually help to spread a new type of culture that is both ethical and effective in achieving ambitious revenue goals: Always Be Learning (ABL).

(5) Know your energy history: too many renewable energy professionals don’t appreciate what it took for the oil and gas industry to establish and maintain the market dominance they have achieved today. Ever heard of the Achnacarry Agreement? How about the Magritte Group? Are you familiar with the Association of International Petroleum Negotiators? If not, then it’s time to get acquainted (click on the links). The extent to which petroleum serves as the lifeblood of our global energy-economic system can’t be understated. We are a petroleum people. Our modern civilization is fossil-fuelled. When was the last time you bought or even used something that wasn’t a petroleum-derived product? Do you use toothpaste? Do you drive a car (EV or otherwise)? Do you own a computer or mobile phone? Ever been to the hospital? Ever bought fruit out of season? Petroleum is basically responsible for EVERYTHING we own and to a large extent, everything we do.

To image a fossil-free future is a noble endeavour. We absolutely need to build a new global energy-economic system that doesn’t rely on a finite resource or on destroying the earth’s natural ecosystems on which we depend for survival. But doing so is not trivial. The displacement of some forms of electricity generation (most often not oil itself) is a good place to start, but we’re going to need a new way of generating industrial-strength plastics, launching rockets into orbit, building satellites, electronic equipment, transporting goods and people, etc that doesn’t depend on petroleum. Understanding the history of how we got here in the first place and how the petroleum industry has been both a blessing and a curse for all humanity is fundamental to making that great leap forward in our minds toward imagining a future where finite resources are not required for prosperity.

(6) Build it don’t blag it: blockchain, blockchain, blockchain. Blockchain is a revolutionary architecture that stands to transform the way the Internet operates worldwide — going from a centralized, mostly privatized, US-based network to a distributed, mostly publicly-owned utility (imagine your local public library, but digitized and globally-connected to all other libraries). Open data and the promise of open knowledge are the ideological cornerstones of this movement and for good reason — the blockchain resists commercialization and leverages the greed of casino capitalists to accelerate its mass adoption. Inevitably though, in no time at all blockchain became a tech buzzword synonymous with ‘unicorn’ and then the ICOs started gathering momentum. Then the corporates started hiring their own blockchain ‘experts’. Not far behind were a small handful of blockchain-enabled renewable energy start-ups, now numbering in the dozens, all promising to radically change the way that buyers and sellers exchange value in the marketplace.

Never mind the absence of standardized commercial agreements (it took a massive effort by oil and gas lawyers to create these for their market), smart contracts will solve that. Forget about customer education (most people don’t know or care where their electricity comes from), they’ll come around. Forget about the digital divide (around half of adults in the global south have never used the Internet), Zuckerberg is on this. Don’t worry about energy access (1.1 billion people have no electricity), people in sub-Saharan Africa have mobile phones. The optimism is unbounded and unprecedented, especially for an industry that is lagging far behind the competition in terms of market capture (the IEA predicts non-hydropower renewables will provide just 15% of global electricity by 2040). I’m not trying to player hate here, I’m just pointing out the obvious: before you nominate your start-up for ‘crypto colossus of the century’ and start tokenizing your unproven, untested, undeveloped Web 3.0 interface, build something that you know addresses a pain point and make sure the blockchain bit is what’s needed to relieve that pain. The last thing we need as an industry is more complexity.

(7) Don’t buck the utility: most of the top 10 largest power companies are either wholly or partly state-owned mega-corporations that oversee hundreds of billions of dollars in energy infrastructure and serve millions of customers worldwide. State Grid Corporation of China (SGCC), valued at $315.19 billion came in second in the Fortune Global 500 2017 list, while Engie is the world’s largest independent electricity provider valued at $49.16 billion. These big, powerful players are largely responsible for the smooth operation of our cross-border transportation and communication networks, our public sanitation and emergency services, our safety and security, etc etc. While the trend toward distributed energy is real and urgent, we will need utility partners to be successful in driving the low carbon transition. In fact, in an ideal scenario, utility players and their majority shareholders will help coordinate this transition.

(8) Be humble: global carbon emissions reached a record high in 2018, while global demand for oil continues to steadily increase at around 1.5% per year. Renewable energy is part of the solution, but whatever it is we’re doing at the moment to make a dent in emissions and fossil fuel growth, it isn’t really working. There are some great industry champions and thought leaders in our space who have done wonders for raising the profile of renewable energy and mainstreaming fossil fuel divestment. However, in light of how far we still have to go there is simply no place for arrogance in this market. Renewable energy leaders need to do a better job of convincing the largest energy firms to divest and diversify. They also need to better understand the history of how oil and gas has come to dominate the market. New tactics and approaches are needed to accelerate system change in 2019–20 and our culture of concern is one that is poised to replace the culture of competition which has led us to the cliff-edge.

Enian

Enian’s technology-enabled platform makes early-stage renewable energy deals accessible to mainstream investors.

Phillip Bruner

Written by

Founder & CEO of Enian — Dealtech for the Planet. #Innovation & #opendata evangelist. PhD(c) @EdinburghUni. Father of 3 wonderful startups #renewablesrising.

Enian

Enian

Enian’s technology-enabled platform makes early-stage renewable energy deals accessible to mainstream investors.