Do startups hold the solutions for our energy future?

The clean energy transition presents an unprecedented challenge to the energy industry. A convergence of three?megatrends – widespread electrification, AI-driven data centre?expansion and global?population growth – is propelling an exponential surge?in demand. And the scale of growth required to deliver a clean, fair and affordable transition means innovation is critical across the industry.

Taking on this challenge requires a step-change in the way many companies operate – particularly utility companies that, by design, are not set up for disruptive innovation. A growth mindset is needed now more than ever to drive change at the speed and scale required to meet net zero targets. ?

Where do startups fit in?

By changing the way energy is generated, consumed and managed, startups are both challenging power-sector incumbents and creating shared solutions. Recent years have seen increased collaboration between the two sectors.

Startups are accelerating change in the utility sector by going to market fast, with precise visions and strategies

Technology plays a central role in the journey to a clean energy future and startups are accelerating change in the utility sector by going to market fast, with precise visions and strategies – a concept that would usually entail a much longer process for larger companies.

It’s therefore essential that large businesses, such as National Grid, work in partnership with startups for success in innovation. Denise Massey, managing director of the Energy Innovation Centre, said: “Apparently 75% of innovation comes out of small business, so that's why it's really important for big businesses… to work in partnership with smaller businesses.”

Investing in startups: National Grid Partners

Adopting new technologies and ways of working has long been part of National Grid’s ethos. We’re the first utility to have a Silicon Valley based corporate venture capital and innovation arm – National Grid Partners – to embrace outside thinking and drive change at the speed and scale we need.

National Grid Partners supports our business units in delivering the energy transition by providing solutions where new ideas or technology are needed to boost progress. This might mean maximising grid capacity, faster infrastructure upgrades or introducing safer asset inspection methods, to name just a few.

Finding the right partnerships for big innovation

National Grid Partners look at the brightest and best of the climate-tech startups that can impact the energy transition. To date they’ve invested half a billion dollars in 50 different companies and speciality funds that are making the power grid safer, cleaner and smarter.

Their investments team is continually on the lookout for the latest startup technologies against four key pillars:

• Future of electric
• Clean energy vision
• Customer first
• Operational efficiency through innovation

When National Grid Partners invest in a startup it’s always with a strategic lens; they actively look for startups that can solve business challenges for National Grid. The team will work actively to drive pilots and proofs of concept – and, if proven successful, helps them deploy more widely.

If there isn’t an existing suitable business that can provide a required solution, National Grid Partners’ own innovation team can work to create ideas and technologies in-house.

Steve Smith, President of National Grid Partners, said recently on The Clean Energy Revolution podcast: “We find these great technologies, prove them at a small scale and then it's that challenge of how we get our businesses and other utilities to scale them quickly. And all of my experience suggests that, at that point, it becomes all about culture … you need those amazing colleagues who are willing to have that vision.”

Sharing innovation worldwide: The NextGrid Alliance

Sharing ideas and learnings enable us all to work smarter, faster and more efficiently in delivering a clean energy future.

To help utilities tackle shared technology challenges in this fast-changing landscape, National Grid Partners established the NextGrid Alliance (NGA) – an alliance of senior decision makers from over 120 utilities across the globe, who come together through a variety of activities to share learnings, meet the latest innovators and startups in the space, and work together to tackle the energy transition.

A profound opportunity to remake how the electricity grid works in countries everywhere.

The Alliance enables sharing of knowledge and ideas, allowing members to collaborate and solve technological challenges in the face of climate change, and is a profound opportunity to remake how the electricity grid works in countries everywhere.

Taking excellence in innovation to large-scale deployment

Having a corporate venture capital and innovation arm working at the heart of Silicon Valley, and bringing the latest thinking from entrepreneurs at the intersection of energy and technology, has proved to not only be a valuable resource but has reinforced a culture of innovation across National Grid.

As one of the world’s largest utilities, we provide access to electricity networks where innovative technologies can be tested, deployed and scaled. In fact, more than 80% of the?startups?National Grid Partners has invested in since 2018 now have strategic engagements with National Grid.

Ben Wilson, President of National Grid Ventures, states: “National Grid is helping change the electricity mindset by making intentional investments that will take the excellence we have in innovation to excellence in large-scale deployment. We’re moving faster than anyone thought was possible.”

Want to be part of the NextGrid Alliance?

If you’re a senior energy executive and would like to join the conversation, the Alliance convenes quarterly working group meetings on critical topics and regular meet-and-greets between startups and utilities, as well as holding an annual Summit.

> Join the NextGrid Alliance