Smart Energy Finances: Navigating the 2024 energy landscape
Image courtesy Elewit
This final 2023 edition of Smart Energy Finances Weekly looks into key deals from the last year and different trends to keep your eye on as we transition into 2024. Think AI-boosted investment platforms, moves to ease up grid connection queues and top tech players to watch.
Power grid forecasting
One of the key recurring themes that has gained solid recognition over the last year has been the unarguable position of the power grid as an investment priority to reach global net-zero targets.
Across conference floors, including but not limited to Enlit Europe in Paris, the power grid has been highlighted as the investment priority as, without a reliable grid to transport energy, how will we get renewables flowing from A to B?
As reported by the International Energy Agency (IEA), the world’s electricity use needs to grow 20% faster in the next decade than it did in the previous one.
This in turn presents a significant investment opportunity: meeting such a target equates to adding or refurbishing a total of over 80 million km of grids by 2040, translating to an increase in investment, for example by 2030 nearly doubling to over $600 billion per year after over a decade of stagnation at the global level.
Compounding this priority, states the IEA, is the fact that at least 3,000GW of renewable power projects, of which 1,500GW are in advanced stages, are awaiting grid connections.
Moves are already being made to combat these connection queues, especially in the UK, where policy is pushing out ‘zombie projects’ to open up space for new connections.
Considering this, there is little doubt that the power grid will continue to be a focal point of investments, be it to speed up connections, or even to enable flexible means of coordinating power consumption.
Flexibility is the latest buzzword
Whether on the residential or large consumer side, flexibility has over the last 365 days been developed as a means of alleviating surging levels of demand off the power grid.
As it does not necessarily imply the build out of new infrastructure, rather leveraging smart software to manage power already being produced and consumed, it opens avenues for grid operators to tap a heightened level of grid management.
One European country in particular that has been investing and doubling down on flexibility as a tool is the Netherlands, where earlier this year an official government position was opened up for a flexibility coordinator.
The compact country has and continues to experience bottlenecks on its power system due to investments in renewable energy outpacing that of infrastructure build-out. The result has been a much-needed pivot to smarter means of coordinating how power is distributed.
Whether through new deals in the realm of vehicle to grid technologies, or new types of flexibility tenders and capacity restriction contracts emerging, deals within the realm of flexibility will prove an interesting space as innovative solutions only continue to launch in the realm of smart energy management.
Have you read:
Swiss electric companies to establish joint market for flexible service procurement
Flexibility platform to offer ‘one stop shop’ for global electricity markets
Artificial intelligence: from concept to application
When it comes to innovation, 2023 has been a year of immense developments for clean tech and software, one of the most prominent being that of artificial intelligence.
In fact, it would not be an exaggeration to say that 2023 has been the year of AI, especially so when we look at its application in the energy sector.
Analysis from the IEA links the development and innovation of AI technologies as a key factor in the success of power grid systems; as a powerful analytical tool, it allows for flexibility to be unlocked by forecasting supply and demand, preventing grid failure through predictive maintenance and enabling digitalisation.
And across the sector, this has been recognised with investors showing a lot of interest in it’s application as an energy transition driver.
Smart Energy Finances this year reported on several deals being made within this realm, including Finnish energy tech startup Capalo AI’s €500,000 ($531,445.50) pre-seed funding to develop its AI-based virtual power plant (VPP) and market optimisation platform, Amperon Holdings’ $20 million Series B round to boost its AI-powered grid analytics platform and growth financing for the Australian company Neara, an infrastructure modelling platform that uses AI to create 3D, network-wide models for engineering-grade simulations and analytics, among more.
Deals surrounding AI are certain to continue into the next year and it will be interesting no doubt to watch the money flow between VCs, utilities, clean tech companies and startups.
Specifically, according to research from Precision Reports, top AI manufacturers in the energy sector to keep your eye on include players such as Enlighted, Grid4C, Siemens, Schneider Electric, IBM, BuildingIQ, Watty, General Electric, Alphabet and ABB.
A platform to keep on your radar
Thinking back on the year that was, one company in Spain has repeatedly announced several project initiatives and developments: Elewit.
A technological subsidiary of the Red Eléctrica Group – a partly state-owned and public limited corporation which operates the national electricity grid in Spain – Elewit has this year announced several innovative technologies, including hybridised supercapacitors, substation automation and more.
However, one project from the company has been in the incubation phase – the Strategos project, which proposes to develop an advanced software tool to help prioritise and optimise the planning of Red Eléctrica’s investment projects.
Specifically, Strategos is a calculation tool that will allow the TSO to optimise their portfolio of investment projects to develop and maintain the electric transportation network in line with their particular needs and circumstances.
The project applies machine learning (ML) techniques to coordinate decision-making when executing a set of investment projects, further simulating and estimating the risks associated with project implementation.
The minimum viable product for the project has already been successfully developed and Red Eléctrica is currently collaborating with AlchemyML, a solution for data exploitation, to carry out subsequent fully functional versions of the tool, that can then be marketed towards third parties.
The expected end date is February 2025.
Also from Smart Energy Finances:
Acquisition to delist SMS from the UK
SparkMeter funding, Elia in the US and AI assisting investments
Purchasing electricity indexed to stock exchange prices
A deal to round off the year
With the new year around the corner, most companies will have wound down their operations.
Although this is traditionally the case, there has been one major deal that is worth mentioning – Octopus Energy Group has secured an $800 million investment from existing shareholders to accelerate their global clean tech growth, now valued at nearly $8 billion.
At the same time, the company’s subsidiary Kraken Technologies has acquired Sennen to improve their renewable energy management capabilities.
The UK energy giant has had a major year in 2023 and so it is no surprise that they announce more growth a breath away from the start of the new year; it will be worth keeping an eye on.
Said Greg Jackson, Octopus Energy‘s founder, in a release on their growth: “…we’ve built the UK’s leading specialist electric vehicle leasing business, in just two years we’ve almost doubled our renewable generation portfolio to £6 billion ($7.6 billion), and tripled the contracted accounts on our technology platform Kraken from 17 million to 52 million.”
These have been the key finance and investment priorities we’ve seen from the last year and our predictions for the next.
But what do you think? What will shape the year to come in the realm of smart energy finances and how do you see the investment landscape shifting?
Let us know.
Cheers,
Yusuf Latief
Content Producer
Smart Energy International
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