Welcome to the Year of the Ox
For there is always light,
if only we’re brave enough to see it.
If only we’re brave enough to be it.
- Final stanza, “The Hill We Climb”
Amanda Gorman’s rousing inauguration poem for President Joe Biden will probably go down as one of the great clarion calls in history. Asking Americans to be better than we have behaved in recent times and for all people “to put our future first”. It does seem that this is the mojo of 2021.
And so it is fitting that this coming lunar year is that of the Ox. According to tradition this year is going to be characterized by hard work, positivity and honesty. All good things coming out of a pandemic and economic malaise that has left millions bereft. And critical if we are to address the ongoing emergencies of our times, which include mounting climate change and growing inequality.
At New Energy Nexus, we resonate with these characteristics — we are up for hard work to support startups doing the hard work of transforming our electricity and mobility sectors for the better. We are positive and uplifted by the amazing entrepreneurs we work with every day. Yet we’re honest about the scale of the challenge and work we have to do to get to our vision and mission. Indeed, we’ve only just begun to make the path and build the capacities to do what we must this decade.
We aim to support 100,000 entrepreneurs by 2030. They will be in all markets in terms of geography and sector of the energy economy. They will not only be high-tech startups but social enterprises; not just hardware but software, finance and business model replicants. We want most of them to be in the rising countries of Asia and Africa, where the greatest need and opportunity exists. And our goal is that they spread jobs, wealth and leadership to those who have historically been left behind by the gargantuan old energy complex of fossil fools and infernal combustion.
The good news is the tailwinds are with us as we take on this mighty mission. Geopolitics is now our friend. China and Europe have used the Trump Era to get a head start on the great process change of the century, which is the electrification of everything. And as a result Biden is coming in with a clean energy industrial policy to try to catch up. Just last year, using Covid relief, the EU doubled their electric vehicle adoption rates and transformed their auto sector to EV. China has been on this replacement agenda since 2017 when gas-car sales peaked. Last year they were down 14% while EV sales were up 10%. Like landlines losing to cell phones, the car as we know it is over in the only growth market for cars left on Earth! And then California mandated to be all EV by 2035.
That is just one example of the massive disruption new technologies in end-use energy sectors is having this decade. The other megatrend behind electrification is the inexorable cost-down trajectory of renewable power. Solar continues to drive towards zero and as a result can now be profitably installed not just when a “new vs new” decision is being made for a power plant but in many places, to replace a running fossil fuel plant. With finance, it can behoove customers and generators to mothball coal and increasingly gas to replace with solar and wind and storage at lower cost than the fuel and service bill of the old plant. That is a game changing threshold we’ve crossed.
There are many caveats to this formula and it will require low cost debt. But we have that in buckets given the monetary policy of most nations. To overcome the obstacles to this playing out we now need entrepreneurs everywhere bundling known and new technologies, with creative finance, to install more solar, wind and battery capacity this decade than we even think we need. As RethinkX have shown in their stunning Energy Report, we are going to enter the 2030s with way more capacity than our current demand peaks. We are going to be swimming in abundant low-cost electrons, which they call Super Power, and using it for all manner of creative opportunities.
The missing piece is the entrepreneur. There are simply not enough of them striving to make this happen with the right skills and resources. Our Theory of Change seeks to remedy this situation by:
1/ Connecting entrepreneurs to people and institutions with relevant knowledge and resources
2/ Ensuring entrepreneurs get the right kind of capital at the right time in their development
3/ Giving entrepreneurs business skills, acumen and the collaborative mindset to have real impact
4/ Ensuring the clean energy startup ecosystem is interconnected and resourceful for entrepreneurs
5/ Always working to support diversity in the ecosystem and ensure resources are equitably shared
6/ Communicating entrepreneurs’ successes to inspire others to start clean energy enterprises.
Which brings me back to the work the world needs to do now. We hope the USA will be humble in its re-entering of efforts to take action on climate and the energy transition. The teacher has been shown wanting as Fela Kuti’s famous album foreshadowed. What works in Silicon Valley may not in the Great Rift Valley of Kenya or the microgrid markets of Nigeria, soon to be a bigger country than the US by population. China’s leadership needs to be recognized — notwithstanding that they too are a country wide and full of contradictions just like US. But the fact that the great bulk of all wind, PV, battery, and EV production and consumption is happening in China cannot be ignored.
Just last month, December 2020, the Chinese solar market installed over 20GWs. That is more in the midst of winter than the US last year. At that run-rate we can replace the world’s electricity system in 50 years. Not soon enough of course, but this is the productive capacity of just one country taking seriously the need to switch out dirty for clean, old for new. Like the requirements to make a place safe in Covid, Chinese policymakers and companies are demonstrating what can be done. If the USA, Japan, Korea, the EU and the rest were to take energy transition work as seriously we’d get it sorted. Just as the new US President has invoked a Defense Production Act to fix vaccine supply what about scaling up solutions to the climate emergency, Joe? A war footing is what is required.
At New Energy Nexus we are seeking to take some cues from our colleagues in China doing the work. We have produced the ChinaCleantech.co podcast featuring Chinese entrepreneurs pushing the envelope there. We also published our digital fintech report in Mandarin and English because we foresee as many financial innovations coming up in China as anywhere. And we’re also working to expand our learnings from that other rising giant, India, with the community manager in our New Energy Nexus slack network based there to bring more and more news and events from the\at thriving ecosystem of innovation and clean energy adoption to all of us. And for those interested in the praxis of running an accelerator program for climate tech, we’re building a Mission Log for the Third Derivative — our largest effort yet with 47 startup companies disrupting multiple categories. It is one of our great privileges to sit in the middle of the world’s largest network of entrepreneur support ecosystems working on energy sectors. The cross learning and synergy amaze me every day.
There will be more here, in our monthly newsletter, our slack community, which now has over 2700 hundred active members and on social media. We would love to have you join us. It’s time to put our shoulders to the yoke and do our best this decade to defeat dirty energy and bring on 100% clean energy for all 100% of people on the planet! We’ll keep you posted on the progress of our startups but for now, as a special treat I offer you this gem from Amanda Gorman’s back catalogue — a poem about climate change she did long before she was as famous as she rightly is now: EarthRise
Shine on!
