Investing in BEMS: addressing 40% of Europe's energy consumption
Buildings are one of the largest consumers of energy in Europe. Estimates in 2021 concluded that around 40% of energy produced is consumed by buildings that simultaneously emit 36% of total Greenhouse Gas emissions.
One technology that has repeatedly been touted to reduce this is that of Building Energy Management Systems (BEMS). BEMS are defined as systems of hardware, software and services that helps building owners monitor and control energy usage in buildings.
we believe good investment opportunities exist in the built environment, if you know how to avoid the pitfalls.
While we have noticed that most BEMS solutions typically focus on energy savings only, we believe that this technology also lays the foundation for earning money by providing flexibility.
At SET Ventures we see investment opportunities in BEMS in two parts:?
1.??????Energy efficiency – solutions to use less energy
There are strong external and internal pressures to decarbonise buildings due to regulations and ESG. A trend that is likely to continue. The key players providing solutions in the BEMS market are large incumbents and hundreds (if not thousands) of start-ups. However, most of these solutions do not provide a good VC investment case. This is often due to long sales cycles, difficult and expensive implementation and long payback times.
One exception here is vilisto. The simplicity of vilisto's solution convinced SET Ventures to invest earlier this year. Their technology is so easy to implement that it’s one of the only true 'plug and play' solutions we have seen.
Building owners simply install the vilisto thermostat in each room, and their software immediately begins optimising the building’s heating to reduce costs and CO? emissions up to 32%. It's a solution that benefits everyone and avoids those previously mentioned pitfalls.
Another example, EnOcean, has benefitted from the rise in Smart Spaces since COVID-19. EnOcean provides (modules for) IoT devices which are powered by the environment and integrated with building data to give a comprehensive overview. As no battery replacement is ever needed, building owners can simply “install and forget”. These devices can also be placed wherever you need them as they come without the need for cables.
With Smart Spaces technology, companies need on average one third less space, which saves on energy and rent as well as pollutions associated with commuting to the office.?
2.????Flexibility – buy energy at low prices and get paid
The price for energy fluctuates throughout the day. By capitalising on a building’s flexibility, (by shifting the times it uses energy or by scaling its energy use up or down to coincide with times of lower energy cost) a building owner can stand to earn significant money.
领英推荐
The right BEMS can turn any building into an active participant in the energy system by controlling it's energy consuming devices, e.g. an HVAC system or lighting. For example, by pre-heating or cooling a building at times when energy prices are low, a building owner can create significant monetary savings.
In addition, flexibility itself is worth money. For example, the flexibility to lower electricity use in certain time periods. For the latter, a minimum size of flexibility is needed so this will often require several buildings to be aggregated into a portfolio. We see more and more start-ups that provide solutions for flexibility and believe some provide a solid investment case. ???
A good example is ESFORIN, which trades energy consumption and generation flexibilities equally on the electricity market. This not only helps the integration of?renewables?and saves?CO?, it also helps companies make additional profits of up to €185,000 per MW and trading direction per year by adapting consumption and/or generation to market behaviour.
Our thesis:
In conclusion, we believe good investment opportunities exist in the built environment, if you know how to avoid the pitfalls. As an energy specialist VC, SET Ventures will continue to invest in this market going forward. The built environment forms a key segment of our thesis of investing in digital technologies for a carbon-free energy system.
Feel free to get in touch with us on this topic and follow us on LinkedIn for more insights.
?
Our investment clusters
SET has defined six clusters that are likely to profit from the key trends driving the global energy system transition.
This article focuses on a part of the Built Environment cluster: BEMS. ?
This article was written by SET Ventures Co-Founder and Managing Partner, Wouter Jonk with input from Hayden Young . ?
Managing Director at Somitra B.V.
1 年VAHID NIROUMAND sleer
10+ years headhunting Strategically important talents in the cleantech sector #talent #Cleantech #solar #energystorage #emobility
1 年Some would say, 'not sexy' but I don't agree. Certainly a critical part of the path to net zero. I loved my conversation with Christoph Berger on my podcast recently, and the work of Christian H?velhaus at ESFORIN SE. You can check my conversation with Christoph here https://youtu.be/TZByOqrKi2w?si=duQUIXMp-KfTFC1D
Head of Marketing @ SET Ventures | Startup Advisor
1 年Good insights Wouter Jonk!
Financial strategist Developer Hydrogen production technique
1 年Nice plans, but I'm afraid we won't save the world with this. That Esforin sounds good to be able to save up to € 185,000 per Megawatt or is that a typo. I myself believe that the biggest step we can take now is to change all gas-fired power stations worldwide from gas to cheap hydrogen, which will reduce 7 billion tons of the total 37 billion tons of Co2 emissions. Cheap hydrogen produced without renewable energy has a production price of < € 1.00 hpg and of this 3 cents per KWh Does that degree matter less in the office if the energy is produced without CO2 emissions.. But I support all plans that reduce emissions!