The atmosphere in the UK this week is not that far off from a disaster movie, right at the moment when the tsunami roars into view. We know the winter ahead will be difficult for many, with inflation spiking as we face an energy crunch. Our new prime minister seems determined not to be caught flat-footed, with hints of a scheme to cap energy bills for consumers and businesses. What does the startup sector have to offer at this moment of crisis, and how can government and consumers benefit?
There are hundreds of companies working on renewables, deeptech, and net zero technologies to solve exactly this problem. One standout is Highview Power, a British company which uses cryogenic energy storage (freezing and unfreezing air) to store renewables-generated electricity for later use. This type of infrastructure will be essential if the intermittency of offshore wind and solar farms are ever to be overcome. Highview already have commercial projects underway in Yorkshire and Spain.
The bad news is that many companies in this sector are still at an early stage, putting them years away from the market. Even for well-established renewable energy sources such as offshore wind and solar farms, the path to market is booby-trapped with red tape. Building anything on a scale sufficient to make a real dent in the UK’s energy needs will inevitably cut across a number of highly regulated areas, including the planning system, which adds to the risk already inherent in the startup world.
Many of the solutions which are available now revolve around helping consumers use energy more efficiently in their homes. Whilst offering an immediate payoff for the user, the installation required also creates barriers for the same sector of the population who will be the hardest hit. One example is Wondrwall, which combines a home solar system with a high-capacity battery and a smart home management system. Another is Tepeo, who have developed an all-electric zero emissions boiler (known as the ZEB) which charges itself at times of day when energy is cheapest.
By nature, entrepreneurs are not the type to be discouraged by foreboding macroeconomic forecasts. They place big bets on what the world will need years in the future and skate over recessions and downturns to build it. One example is Carbon Re’s Delta Zero, which uses the troves of data generated by industrial processes to help cement plants work more efficiently. The long-term rationale, reducing carbon emissions, is as valid as ever; but the immediate benefit for new customers may turn out to be keeping the lights on in the face of energy shortages this winter.
In fact, the most important role for startups in this crisis may turn out to be through sectors other than energy. Many people may be forced to take on second jobs in the gig economy as wages fall behind inflation. Companies offering buy-now-pay-later services or instalment plans, like Klarna and Affirm, will allow consumers to keep spending even as their finances are stretched to the limit. And if we find ourselves in a world where leisure activities like travel and shopping have become unaffordable, we’ll always have TikTok.
Image credit: these graphics were generated by DALL-E from prompts pairing Victorian houses and tidal waves.