Jon Slowe, Director at Delta-EE
René Savelsberg, Co-Founder and Managing Partner at SET Ventures.
Charles Vaslet, Partner at Emerald Technology Ventures
Charmaine Coutinho, Head of Consultancy at Delta-EE
[00:00:23.550] - Jon Slowe
Welcome to Talking to Energy, a podcast from Delta-EE, the new energy experts. We will be talking about how the energy transition is developing across Europe, with guests who are working at the leading edge of this transition. Hello and welcome to the episode.
[00:00:24.330] - Jon Slowe
Today, we're taking a step into the investment world change and disruption in the energy transition means opportunity, and there's no shortage of startups, new entrants and emerging companies seeking to capture these opportunities. But these companies typically require cash to grow and have an impact in the transition to a cleaner, greener future so that cash often comes from investors. And today we're going to look at what it's like from an investor perspective. And to explore this, I'm joined by two people who have been investing in the energy sector for many, many years, together with one of my Delta-EE colleagues who has been working with both start-ups and investors alike.
[00:01:08.410] - Jon Slowe
So, without further ado, let's introduce our guests. My first guest is René Savelsberg, CEO and Co-Founder of SET Ventures, a specialist investment company in the energy transition based in Amsterdam. Hello, René.
[00:01:24.160] - René Savelsberg
Hi,
[00:01:25.000] - Jon Slowe
Thanks for joining us.
[00:01:27.430] - Jon Slowe
You co-founded SET Ventures 13 years ago, and your company has grown a lot. Can you give our listeners a pen portrait of SET Ventures today?
[00:01:38.020] - René Savelsberg
Yeah, well, indeed. We started in 2007 with our first fund. Currently, we are investing out of our third fund, which has the size of 100 million, the third fund. And we focus still on energy transition, even though we label it as the energy system transition. I can explain that definitely somewhat further later on in this podcast. But we believe that that is where the right excitement is right now to invest in companies.
[00:02:16.870] - Jon Slowe
And can you give us a feel of roughly you mentioned 100 million, in your third fund. Can you give our listeners a feel of how many companies you've invested in and how many you've maybe exited from to give a sense of how active you've been?
[00:02:32.710] - René Savelsberg
Yeah, we are.
[00:02:33.860] - René Savelsberg
We are close to 25 investments that we have done over the 13 years. We have exited about half of those so far, some successful, some a little bit less successful like always in our industry. But we are very happy with the overall performance. And obviously, we have a couple of very interesting companies still in our portfolio that we are working hard with to achieve our objectives.
[00:03:03.250] - Jon Slowe
And can you give us an example or two of your successes or companies in your portfolio that you're particularly excited about?
[00:03:11.920] - René Savelsberg
Yeah, well, I think it's known that Sonnen in Germany, a company that we invested in the B round that has become a successful company, not only from an investment perspective, but also in the market as it is now part of Shell and bringing home batteries to life in a virtual power plant, which is definitely one of our successes in our portfolio, but also very early on if I may add to it very early on, we already actually have a company in the EV charging business.
[00:03:45.140] - René Savelsberg
In 2011, we sold that company to ABB, which I think was very much ahead of the pack of everybody being in the electric vehicle. So, we can be proud of that.
[00:03:56.860] - Jon Slowe
Yeah, not quite a decade ahead, but not far off René. Thanks, René, we'll come back to you shortly.
[00:04:06.400] - Jon Slowe
Let's introduce our second guest, Charles Vaslet, a Partner at Emerald Technology Ventures in Zurich. Hello, Charles.
[00:04:14.850] - Charles Vaslet
Hi, Jon. Hi, René. Nice to be on this podcast as well. Looking forward to the discussion.
[00:04:21.160] - Jon Slowe
Thanks, Charles, you've been around a similarish time, a bit longer than SET Ventures and at Emerald, your focus is a bit wider, isn't it, than energy? Can you give likewise give our listeners a pen portrait of Emerald in terms of your focus, your size?
[00:04:39.520] - Charles Vaslet
Yeah, that's right, Jon. You know, we were founded in 2000, so we're 20 years old. I actually joined the firm in 2004 after a career in the energy sector.
[00:04:55.480] - Jon Slowe
Do you remember what number employee you were Charles?
[00:04:57.860] - Charles Vaslet
Oh, well, it was actually part of a larger group then, which we later separated from. That was SAM. And, you know, originally it was around sustainability and energy.
[00:05:09.700] - Charles Vaslet
And then we broadened out, as you said, to kind of cover advanced materials, water technologies, now industrial IT mobility circler solutions and actually a little bit of food and AG as well.
[00:05:25.230] - Charles Vaslet
And obviously, we're looking for to support entrepreneurial led early-stage and expansion-stage companies in Europe, North America and now in Asia, with a new office opening up in Singapore.
[00:05:42.070] - Jon Slowe
And number of investments or amount invested as of indicator of your activity.
[00:05:48.340] - Charles Vaslet
Yes.
[00:05:48.650] - Charles Vaslet
So we have an evergreen fund, which is the Emerald Industrial Innovation Fund. That's 135 million euros. But it basically grows as we add new investors.
[00:06:04.660] - Charles Vaslet
We've got 25 corporate LPs, very diverse in nature and sectarian interests, etc. In that fund, we just closed 100 million US Water Fund as well. And we're looking to start other kind of thematic funds as well.
[00:06:24.340] - Jon Slowe
OK, thanks very much.
[00:06:26.170] - Jon Slowe
And my final guest is Delta-EE colleague Charmaine Coutinho. Hello Charmaine.
[00:06:35.530] - Charmaine Coutinho
Hi Jon
[00:06:35.530] - Jon Slowe
Welcome back to the podcast. After a while, since you've joined us.
[00:06:39.960] - Charmaine Coutinho
A brief hiatus.
[00:06:41.580] - Jon Slowe
Yeah. Now we've been involved at Delta in quite a lot of work, both for start-ups and companies seeking investment and those seeking to invest in the energy transition. Can you give us an example of something that's really stuck in your mind from maybe an investor or investee side?
[00:07:03.890] - Charmaine Coutinho
Yeah, so from an investor side, I think what was a really interesting example is we were asked to give support on free investment in a heating technology. So, at Delta, we've been researching heating for a long, long time.
[00:07:18.240] - Charmaine Coutinho
And for me, that was really fascinating because this company's been around for a long time and very vocal in the marketplace and really being able to help the kind of really portray the picture of what that company's trying to do and where they sit in the market based on. Accessing, all these kinds of years of experience, it was really nice to see the heat transition starting to gather some pace or at least some interest from a financial perspective so that was quite nice on both sides.
[00:07:43.730] - Charmaine Coutinho
Actually really, because we knew the company beforehand and working with investors to help support them in making a sensible decision. So, that was great. And then, you know, going back to the past, just more of just traditional kind of market assessments to make sure that anyone investing in these is going to really understand the dynamics, the trends, the history as well, as well as kind of where all these companies could be going in the future.
[00:08:08.720] - Jon Slowe
Well, maybe René and Charles, I'll just ask you on that point in terms of understanding the market. One thing that I think is a challenge for investors in energy is the level of complexity in the energy market, the regulations of policy, the market structures, the dynamics in the market. Maybe it's the same whatever sector you go into, but energy is, I think, particularly complicated. How hard does that make it for you or how much of a USP does that give you as investors if you're focused on energy?
[00:08:40.700] - Jon Slowe
Do you still struggle sometimes with those complexities? Is it hard to really identify those compelling companies when energy is such a complex area?
[00:08:53.750] - René Savelsberg
Well, I totally agree with you. I applaud always investors that have a very broad scope and need to understand a lot of sectors in detailed in order to make decisions. And we had said we focus for 100 percent on what is happening in the energy system as it is evolving as we speak and through the transition from fossil fuel to renewables and from centralized or decentralized. And indeed, as you said, it's a very complex market where regulatory environments are evolving as we speak, per country there is differences and opportunities that are working in one country will never fly in another.
[00:09:39.380] - René Savelsberg
So, knowing those realities is something that is very needed in order to make right decisions. And we are specializing in that we are focusing in that, we do, our {illegible} our studies in these areas in order to educate ourselves and prepare ourselves for the right investments at the right time.
[00:10:00.160] - Jon Slowe
And how do you find that René? Do you ever look at investments and think, even though you're a specialist in this area, you think, wow, there's just too much, I don't understand it.
[00:10:10.840] - Jon Slowe
Or over the years, do you find that you can understand the risks and the what you need to understand in the energy sector to really evaluate investment opportunities.
[00:10:23.200] - Jon Slowe
I agree with the complexity that it is complex at a certain level.
[00:10:27.040] - René Savelsberg
But if you're abstract, it also becomes clear what is happening. So that in itself, I don't think that we are lacking the knowledge about the where the market is going to but what is always difficult. And that counts for every investment and every sector that you're investing in is the timing of when things are happening. So, the timing issue of when companies with great propositions will really hit the market and start scaling up. That is something that I'm still worried about, that we sometimes wish that either we are too conservative or sometimes we are too optimistic.
[00:11:07.690] - René Savelsberg
The timing that is the issue.
[00:11:11.590] - Jon Slowe
OK, Charles, how do you see that, because you're a little wider than just energy. Do you have to be master of a few trades rather than just one?
[00:11:20.860] - Charles Vaslet
Yes.
[00:11:21.170] - Charles Vaslet
So, every industry I think we touch is going through a transition, whether it's an energy transition or a circular economy transition or a digital transition or changes in an environment. Climate change obviously imposing pretty ambitious goals on many corporations who are kind of seeking to get to, you know, to reduce emissions significantly. So, and that's a struggle because it's not clearly the regulations today it's the regulations tomorrow. And, you know, as this industry transition regulations will either be ahead or behind and obviously regulations will change geographically as well.
[00:12:11.200] - Charles Vaslet
So, some you know, some nations or states or super nations will be moving at different paces. So, you know, it's critical to try and understand not just the market today, but how you think that's going to continue. For example, you know, is are regulated or utility-owned, but regulated companies in the US utility sector is that a sustainable business model? Or are we going to see greater deregulation, as we saw 20 years ago, kind of re-emerging as the necessity for these kind of, you know, companies which are almost guaranteed a profit, kind of goes away.
[00:13:01.150] - Charles Vaslet
So, I just think there's going to be enormous change. And it's that's also needs to be understood.
[00:13:09.520] - Jon Slowe
OK, well, let's come back to this area of risk and uncertainty and regulation in a bit. I'd like to ask you both first from about investment opportunities. So, I'm constantly amazed by how many new entrants are trying to find their way into the energy sector in terms of investment opportunities coming across your desk, do you struggle for opportunities? Are you swamped and overwhelmed by opportunities? Can you give our listeners a feel for the volume of opportunities in the energy sector that you're saying?
[00:13:49.320] - René Savelsberg
If I may answer that, consistently over the years we see about north of 700 propositions per year coming through to us in Amsterdam, and that number is not changing. What is changing, though, is that more and more of these propositions are all geared towards what we call smart energy solutions, solutions that are propositions that have a digital component in its business model, software-driven and are working along that access to make the energy system transition happen.
[00:14:31.270] - René Savelsberg
And that is encouraging event that we see more and more of those type of companies coming to us that are at the heart of where we feel the opportunities are for an investor like us.
[00:14:45.240] - Jon Slowe
That's quite a 700 a year. And from what you said in your introduction, you've made around 25 investments over 13 years. Now, I know that won't be evenly spaced, but that averages to a year.
[00:14:57.690] - Jon Slowe
So, you're not short of opportunities. That sounds like quite a challenge to evaluate those 700. How many would you say of those 700 do you really then look at seriously over the course of a year?
[00:15:12.060] - René Savelsberg
I would say between 10 and 20 percent. By the way, I want to stipulate that we look at all of them. We have a weekly meeting in which we discuss all of the things that come in. So, we quickly shift between those that are worth further investigation. And then if they're really interesting, we bring them to a proposal and then we execute later on the deal. And that is indeed, as you say, that's a low number.
[00:15:37.350] - René Savelsberg
The last one, because we have to be very picky and timing is everything on this.
[00:15:44.180] - Jon Slowe
Yeah.
[00:15:45.190] - Jon Slowe
Charles, are those numbers similar to you or do you have a different experience?
[00:15:49.470] - Charles Vaslet
Yeah, I think I think it's really important as an investor has to have a consistent and systematic process. And, you know, it's taken us years to kind of develop, you know, how do we shift through the 1500 deals that we see per year of which about half are of kind of pure energy-related, some kind of energy and water, etc, but, you know, shifting through that amount of deal flow and we probably reach out to about half of them to actually speak to the company.
[00:16:21.420] - Charles Vaslet
We have these kinds of informal tire-kicking sessions with the team and then a three-game process to get from that number. So, we use the same kind of pipeline. We're trying to also find interesting companies for our LPs because they are also interested in kind of what's going on in the steel flow. So, similar numbers to René. I mean, we're basically from an investment perspective, within 10 to 20 percent and probably discussing a similar amount with our LPs.
[00:17:00.090] - Charles Vaslet
Now, obviously not the same deal we discuss with every LP because they have different interests. But yeah, it's a lot of reviewing, writing up, processing. And if you haven't got a systematic process for that, you won't identify those few companies which will basically carry the front performance.
[00:17:22.440] - René Savelsberg
Jon, maybe I can add to that.
[00:17:23.400] - René Savelsberg
Because I think if you are a focused fund manager like we are, you know, obviously not every deal is a complete new deal that you have to start studying from scratch. In those 700 that we see on a yearly basis, there's quite some overlap because smart people are everywhere in every country and entrepreneurs are arising in every country with similar ideas. So, we can very much plug them into a certain bucket of what they want to do and similarities and therefore quickly scan the good from the bad.
[00:17:59.280] - René Savelsberg
And there is an efficiency that you get while you are focused on a certain sector, which in our case is in the energy system transition.
[00:18:08.970] - Charles Vaslet
But it isn't cheap, Jon, it's expensive if you think about the amount of time we spent, I would say about, you know, probably maybe 20 percent of our OpEx, maybe a little bit more is really just going through this deal flow. So, it's you know, it's thousands of dollars per deal of resources which are spent trying to, you know, assess light-up, discuss amongst the team through this solution.
[00:18:42.690] - Charles Vaslet
And I think a lot of people kind of don't necessarily understand that when they start a new fund in the sector.
[00:18:52.380] - Jon Slowe
Yeah.
[00:18:52.680] - Jon Slowe
That they're going to have this volume of opportunity to evaluate and understand. Now, we may have some listeners to this episode of the podcast who are considering pitching to you, René and Charles. What advice would you give them?
[00:19:11.340] - Jon Slowe
And then to Charmaine, what challenges do you see from working with some of these start-ups? So let's start with René and Charles, in terms of biggest single bit of advice to someone that has got a start-up that needs investment and is going to pitch to you, what would you say to them?
[00:19:32.640] - René Savelsberg
Well, I prepared this question because I actually it was on our internal discussion the other day. You know, the single theme, you know, in any event, pitch, it should be simple. So, the more simple you can bring your message across, the better it is. Obviously, but the number one thing is explain very carefully from the get-go. Who you, as a new company start-up, are going to send invoices to who is the one that, you know, has to sign on the other side of the okay for your invoice?
[00:20:07.760] - René Savelsberg
As long as that is not clear. And I tell you, in 99 of the 100 that's not on the table of any pitch,
[00:20:15.030] - Jon Slowe
Wow
[00:20:15.780] - René Savelsberg
Yeah, I know, because people start talking about how great they do the things that they do and how complex the market is and where they solve the problem. And then, in the end, you know, you have a solution. Who are you sending the invoice to? Who is sitting on the other side there and being your customer and signing off on that invoice?
[00:20:34.740] - Charmaine Coutinho
I would agree with that, Jon. Yeah sorry, I just I feel so strongly about that. We've been helping some start-ups with their investor packs and investor pitches. And quite a lot of them, not all of them are technical. So, they come from engineering backgrounds. So, they see a technical gap in the engineering system, and they have this great idea and they go straight to the detail of that rather than saying, and we're going to sell it to these people.
[00:20:58.230] - Charmaine Coutinho
These are our customers. And this is what it is in one line. And I kind of want to direct them all to reading like start-up.com is the top ten list, isn't it? But it is the one thing we have seen is just, no one, people are interested in you, but actually, how are you going to make money and if you don't know, how do you think you're going to make money and keeping that really simple, really.
[00:21:23.820] - Charmaine Coutinho
I think that's the biggest challenge we have.
[00:21:27.020] - Charles Vaslet
Let me expand on that a little bit, because I also think, you know if you're selling to anybody and in some respects, a pitch to an investor is a sales process. Right. You know, take the time to understand, you know, what the fund does, what the fund has historically invested in. Who are the people who are the decision-makers, you know, think about how you're going to progress this through that organization.
[00:21:52.610] - Charles Vaslet
How can I help them to make this easy for them to decide one way or the other if this is interesting proposition? The other thing I would say is its storytelling and, you know, to kind of build on René's point, boiling it down to simple messages, is actually very difficult. You know, it's easy, actually just stuff, you know, 20, 30 slides of technical diagrams and whatever, but actually boiling it down into this kind of story, make it, you know, make somebody care about what you're doing, make it interesting and make it human.
[00:22:29.600] - Charles Vaslet
And I think then you can kind of you know, you can kind of connect with the investors so they understand how you're going to make a difference, you know, not just for them, but, you know, in the application that you're doing for the customers that you're looking to serve.
[00:22:46.490] - Jon Slowe
Well, two things really struck me from all three of you said one is customer-centricity and how that's, I keep talking about this with lots of different people, that the energy sector still really lacks customer-centricity in many ways. And that's the same that I'm hearing now about treating you the investor, both treating you the investor as their customer and giving a really simple story and being clear who their customer is. And the second is keeping it simple. I think people love to make things complex but keeping things really simple.
[00:23:24.350] - Jon Slowe
So, if you are thinking of pitching for investment and you're listening to this podcast, hopefully, that's of help. I'd like now to spend a bit of time looking at how easy or hard it is to succeed as investors and cleantech I know is different from what each of you two do. But cleantech came out of the 2000s with quite a tarnished reputation, so. Yeah, how successful have your funds been and what are the biggest challenges you talked about, the regulatory risk, is that the biggest challenge or would you highlight another really big challenge for an investor to succeed, René do you want to go first with that?
[00:24:08.190] - René Savelsberg
Sure, um, yeah, well, the fact that the cleantech sector came out a little bit tarnished, as you said, has had to do with the fact that everybody believed that you could flip a capital intensive business into a venture capital model and then make great returns, that is what cleantech suffered at large. We are now obviously in a different era and investors like us have moved to the digital as part of the equation where we will with asset-light and recurring revenue models, we want to correct that success.
[00:24:46.660] - René Savelsberg
But the biggest the two biggest issues we see is still the timing of the market. As I said before, markets are different in every country, still in the energy sector, which is coming out of a regulated environment into a free environment. Technology is changing rapidly and predicting the market when it's picked up is still an issue.
[00:25:09.948]
{Cross talk}
[00:25:11.790] - Jon Slowe
René, regulation, one part of that timing, isn't it?
[00:25:14.580] - Jon Slowe
You've mentioned regulation, but the technology customer, it's a whole range of things affecting that timing.
[00:25:21.060] - René Savelsberg
It's definitely not only legislation, absolutely in a regulatory environment, it is also consumer attitude towards, you know, the appreciation of an energy transition and willing to pay for that. Absolutely. The second part of any of the market that we are in is that we are moving away from this engineering-driven to really a business-driven environment where the points that we made in the earlier in the previous topic, on what is important in a pitch being consumers and customer-centric and know what you are selling is becoming more apparent now than it was ever before.
[00:25:56.190] - René Savelsberg
So, that still is an issue good teams with experience in the sector are needed.
[00:26:03.620] - Jon Slowe
Yeah, OK. Thanks, René.
[00:26:05.200] - Charles Vaslet
Yeah, maybe.
[00:26:05.550] - Charles Vaslet
I think yeah, I kind of think of it the same, but I always think of it slightly at one level up. I mean we are asset managers or fund managers. So, you know, it's really important for us to understand that, that there are no single silver bullets. There's very few unicorns in this sector. Right. So you've got to construct a portfolio of diverse investments, diverse by sector stage, geography, time, you know, just making sure that there's no one event which is going to basically hit more than one or two companies at any one time then.
[00:26:46.940] - Charles Vaslet
Think about how you construct that individual investment, you know, what size of syndicate do you want? How many new investors versus existing investors? Can you ensure that that syndicate has enough money to carry you through the next round so things don't progress as René was saying a market comes later and you can't raise external moneys at the price that you want. Does the current syndicate have the power to basically take the company through to a cash flow break-even, build relationships with your board members, your management team.
[00:27:25.910] - Charles Vaslet
You don't wait until the crisis, which will inevitably happen. You need to establish those relationships. You need to work on those relationships. You need to meet people, dine with them, you know, just, you know, engage with them. Because one point there will be a shock. You know, either something goes off the rails, the economy changes, and at that point, you need to come together and work together.
[00:27:54.890] - Jon Slowe
Yeah, okay so two points there Charles, the portfolio approach that doesn't focus just on one narrow part of the market, but have a portfolio, and secondly, your investors, they'll need to go through hard times. So, making sure that you've got the firepower to act on opportunities when you see it. Charmaine, there's more and more activity from, I guess, a range of investors in the energy transition. Anyone stand out to you as starting to invest in addition to companies like René and Charles's companies?
[00:28:36.990] - Charmaine Coutinho
Well, I mean, I wouldn't say anyone particular stands out to me.
[00:28:42.240] - Charmaine Coutinho
I mean, we've seen a lot of our clients who are kind of in the corporate venture capital, which I find interesting anyway, because the dynamic that causes a big corporate to set up an investment team, why they do that, I find quite interesting.
[00:28:55.800] - Charmaine Coutinho
But from that group of people, I think Enel X is quite interesting just because they've gone beyond energy quite substantially in the way they look at their innovation hubs and innovation programs. So, I think they're quite interesting and starting to merge into that kind of circular economy piece that Charles mentioned. So, yeah, I find those interesting. I think the biggest thing for me, I've been working in the sector for about 15 years and it's really great to see people.
[00:29:24.900] - Charmaine Coutinho
Articulating things like ESG is now the most in one of the drivers that speeding everything up in the investment sector around energy and I don't really like ESG as a reason for doing something so when I say ESG, environmental, social and governance and such a weird phrase, but it is really refreshing to see that kind of speed of change across all investor types.
[00:29:47.420] - Charmaine Coutinho
So, I find that quite encouraging, really.
[00:29:50.490] - Jon Slowe
And René and Charles, do you see the interest in ESG sustainability, is that dragging, dragging, that's a bit of a negative way of saying it Is that bringing encouraging more and more investment into the space you're getting more competition or is there still is there a lack of investment in the space? How do you see it?
[00:30:11.360] - Charles Vaslet
Yeah, so I you know, I don't see yet, but I think it's certainly appearing in markets that we work in. So, for example, in the built environment buildings, you know, all of a sudden, you know, landlords, private equity firms, real estate companies are really focused in on ESG and that's just not new build that's existing built. So obviously, that's creating a demand for products that we're looking to invest in.
[00:30:48.000] - Charles Vaslet
So, I do see the pull of that. I see some institutional investors stipulating ESG policies to fund managers who, you know, and we do that. But I don't think that's necessarily driving investment yet into the C-funds.
[00:31:10.410] - Jon Slowe
No. OK.
[00:31:11.850] - Jon Slowe
René how about you? Do you see ESG bringing more investment money into the sector or not yet? Is this still too complicated and specialized for the more generalist investors?
[00:31:24.840] - René Savelsberg
No well SET Ventures has started ESG policy and toolkit and working with our portfolio companies on ESG already for seven years. So, we were one of the earliest adopters of that. And we believe that applying ESG principles to and running a company of any size, whether it's a start-up or a conglomerate, a huge conglomerate, you have to apply very simple business principles around ESG in order to survive in any case.
[00:31:56.960] - René Savelsberg
So, we don't think that is in itself a driver. What is a driver is impact investing. So, putting money that will really make the output of the effort, output of the investment is really creating an impact on, for instance, the environment. And then you start calculating, for instance, CO2 reductions, etc. And that matrix is becoming a very, very important driver for new entrants into the sector to really show that we not only focus on the financial return but also focus on making real impact in the transition that we want to achieve because we don't transition because of a transition.
[00:32:36.840] - René Savelsberg
We transition with the energy sector towards something that is more sustainable, and that matrix is therefore important.
[00:32:44.520] - Jon Slowe
So, if you can measure that accurately, then you can see over time you will get more and more impact, investors looking to make a difference in the energy sector.
[00:32:53.280] - René Savelsberg
Yeah.
[00:32:56.120] - Jon Slowe
OK, now, time is getting the better of us, we could talk a lot more about impact investing and ESG, but that's probably a different podcast altogether.
[00:33:04.550] - Jon Slowe
So, let's bring out the Talking New Energy crystal ball and set the dial this week to 2030. My question to each of you is this. So, I mentioned cleantech investing a bit different to energy investing, but cleantech investing came out of the 2000s with a bit of a tarnished reputation.
[00:33:24.380] - Jon Slowe
How will energy transition or energy investing emerge in the 2020s? So if we're in 2030 and we look back in the 2020s to energy investing. What does the next 10 years hold? And René and Charles
[00:33:40.700] - Jon Slowe
I fully expect you to say that in 2030 we will be looking back, and the energy tech will have been a huge success in the 2020s. So, if that is your answer, then maybe give me a reason why. So, how successful energy investing be in 2020s and why is a question. René let's start with you.
[00:34:05.180] - René Savelsberg
Well, I remember recently somebody told me that really big money is now going into infrastructure around a new energy distribution and deployment of all kinds of tools to make electrification possible. Only about charging EVs. And a lot of money is going into the infrastructure. So, we're getting to going to a moment in history where this transition is really deployable and the transition is based around obviously like I said, the sustainability, electrification and the digitalisation. And that is happening as we speak in the 20s.
[00:34:49.760] - René Savelsberg
So, I foresee that indeed these are the years where we can, with innovations, very much contribute to that and make the returns that we want. But I also and its part of our thesis of our investment fund is that we see new entrances into the energy systems, companies that historically did not take part in the energy system actively. And just to give an example of that, and Charles mentioned just the build environment, but the mobility sector is one that is going to be a major player in the energy system going forward, as will be all the oil and gas majors that are making transitions into this space.
[00:35:33.200] - René Savelsberg
So, the ones that I would be the most worried about are maybe the traditional energy retailers they have to transition themselves very, very swiftly, but they will be confronted with a lot of new propositions that they have to compete with for their customers.
[00:35:50.390] - Jon Slowe
It's going to be fascinating competition in the next year. I agree. Charles, 2020s will that be a decade of success for energy.
[00:35:59.210] - Charles Vaslet
Yeah.
[00:36:00.050] - Charles Vaslet
I think so. Exactly. We've been working so long and hard on it, but now it's maturing right?
[00:36:06.250] - Charles Vaslet
I mean, you know, wind, solar kind of have been dominant in new additions, you know in Europe, North America, I think Paris made such a big impact the fact that you have to do this kind of reviews every five years, which basically means that people have to question their long term investments in fossil fuels. So, I think that the prices have just come down and not just talking solar wind batteries, but I'm talking computation, edge computing, digital storage, the cost of connecting things.
[00:36:45.860] - Charles Vaslet
So, these kinds of multiple revolutions, you would think of them as quite distinct utilities, mobility, IT but they've actually all come together. And now we're going to add onto that kind of heating, storage in homes and industry, etc, etc. So, you know, it's just one, you know, what was quite siloed industries have now kind of crashed together. And I think that's why it's so exciting. And I think that's why it's going to be a successful decade.
[00:37:19.770] - Jon Slowe
So, lots of opportunity from all this disruption and innovation, Charmaine, how about yourself, you're maybe not so invested in the investor sector, but how do you see this decade for investing in the energy sector?
[00:37:36.090] - Charmaine Coutinho
So, I think this kind of touches René's point, which is really where it comes to almost all this investment, whether it's in infrastructure or in organizations or in start-ups, comes to being kind of much more mainstream commercially in homes and businesses. So, the presence of these assets or whatever they are actually enables them to start making money, I suppose.
[00:38:00.000] - Charmaine Coutinho
And I think this is the decade, because if you look back retrospectively, what could have happened in the 2010s? I just don't think consumer interest or understanding sounds a bit harsh or sound like a classic energy sector saying that the consumers don't understand. I don't mean that.
[00:38:15.030] - Charmaine Coutinho
I just don't think all the factors are there at the right timing and the right with the right technology at the right cost point.
[00:38:24.150] - Charmaine Coutinho
And I guess
[00:38:26.160] - Jon Slowe
The stars weren't aligned in the way that they're aligning now.
[00:38:29.190] - Charmaine Coutinho
So, it's a real tipping point, I think it is a tipping point.
[00:38:33.900] - Jon Slowe
Yeah, well. There's certainly going to be lots and lots of change over the next 10 years, and René and Charles, I guess you've been at this for so long, doing it for so many years, that you're well-positioned with the experience you've got to capitalize on that. But I would say there's what I hope is we see more and more investors coming into the space, more and more capital to help fuel the energy transition.
[00:39:04.970] - Jon Slowe
And at the end of the decade, we'll see who's coming out on top.
[00:39:10.560] - Jon Slowe
It's been a fascinating discussion, one which we could look at from a number of different angles in future podcasts, and we will do that maybe again with you, Renee and Charles. Welcome back to discuss some different angles. But thanks very much for your time, René. Thanks very much for joining us.
[00:39:29.040] - René Savelsberg
Thank you very much, pleasure and hope to connect with you again soon.
[00:39:34.140] - Jon Slowe
Likewise
[00:39:34.770] - Jon Slowe
And Charles, thanks for joining us from Zurich.
[00:39:36.960] - Charles Vaslet
Yeah, thanks a lot.
[00:39:37.950] - Charles Vaslet
It was great to discuss with you and Charmaine and René of course and yeah, just wishing that we get through this current situation so we can meet in person.
[00:39:49.320] - Jon Slowe
Yeah, likewise. Charmaine, thanks for coming back to the podcast after a little break. And as always, thanks to everyone for listening. And we look forward to welcoming you back next week. Thanks, and goodbye.
[00:40:15.660] - Jon Slowe
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[00:40:32.130] - Jon Slowe
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