Elena Bou, Innovation Director at EIT InnoEnergy, warns of the consequences of not supporting energy start-ups in the wake of the COVID-19 pandemic, offering a potential solution.
Europe is gripped by coronavirus. It is a scourge on our future, and an aggressor that we simply cannot fail to beat. This is a war, but together – as families, communities, and nations – we are fighting it, and we will win.
Yet, while we have much to do to win the war today, we must be as fervent in protecting tomorrow. The shock to our economies will be substantial, and it is not a moment too soon for us to begin rebuilding a more resilient and brighter future for all. So, while we must prepare as best we can, with one eye on today, it is imperative that we keep the other eye firmly on the future that we still hope to create.
For several years, the energy industry has unwaveringly explored, innovated, and invested in technologies and services to bring about a new industrial revolution – sustainable, electrified, and digital. But these innovators are much more than the sum of their parts, much more than investment figures on a page. What was once just a handful of cutting-edge ideas on how to make energy more sustainable has developed into its very own ecosystem – with myriad suppliers, competitors, customers, government agencies, NGOs, and investors.
An ‘ICU’ for energy ventures
This ecosystem is an essential facet of Europe’s future economy. Without it, there is simply no way we can rise to meet the climate and environmental challenges that we are facing. But we also know that many of the start-ups and entrepreneurs that underpin this ecosystem are falling between the cracks of state-led support and have limited access to credit. It is not enough to prepare large investment packages to save our European ventures. We need a fast deployment of those packages and measures that rescue not-credit-worthy start-ups, which are the vast majority in early stage ecosystems. We need an ‘ICU’ for our ventures; a fast-intensive treatment that helps them not only to recover, but also become stronger.
Within our own portfolio, we have helped our ventures revise business plans and provided technical expertise so that they can more easily access labour, liquidity, and subsidy support measures. And for the 60% of those starts-up who require urgent support, we have deployed urgent actions to provide financial aid to bridge the gap or sales support to close commercial contracts. Our objective is twofold: first is survival, but secondly, strengthening the company through quick adaptation. The potential loss of jobs and opportunities is grave, but it is the potential loss of opportunity that is most profound.
We need to support innovation
Today, Europe has best-in-class leaders of the energy transition right at its fingertips, but if we fail to offer help, we will not only say goodbye to entrepreneurship now, but in the future too. If entrepreneurs see that they are not supported by the landscape that remains, why should they pursue innovation, if the potential risk is so much more unfavourable than it was before? Failing to support and embrace start-ups now – financially, politically, socially – is akin to taking a torpedo to the entrepreneurial culture that we have so carefully cultivated in Europe to date. Many innovation ideas would remain just that, destined never to become of benefit to society.
Equally, if we fail to help, we throw much of the past decade’s progress to the wind. The innovation readiness that the industry has amassed – and which underpins the transition to our new future – will be slowly rubbed out, setting back our ambitions to become the world’s first climate-neutral continent.
A European Green Deal roadmap
Thankfully, we have a window of opportunity, but it is closing fast. It is undoubtedly a lot to ask in such uncertain times, but the industry must act now to sure up liquidity and make capital increases available to ensure the long-term survival of this vital part of the industry. Afterall, energy is the very backbone of economic prosperity and what better way to deal with such uncertainty than to forge a European Green Deal roadmap that will, once and for all, make Europe’s economy sustainable. Indeed, the momentum to build a sustainable, more resilient future has never been stronger as the industry comes together to survive. This is a call to policy makers, business leaders, NGOs, and investors across Europe to support and implement an investment package that will accelerate the transition to a new energy economy.
In our eyes, to safeguard innovation is to save the future. Many of the start-ups in our portfolio, and indeed investment portfolios across Europe, will undoubtedly be the technology leaders of tomorrow. They make up a big part of the future of the European economy – we cannot let them die. That is why we still plan to bring together 150 of the industry’s most promising clean-tech solutions at The Business Booster in November. We are all committed to economic recovery in one way or another, but it is only together that we can continue our journey to be the first climate-neutral continent by 2050.
And in the same vein, to the industry as a whole we say – there is no better time to crowd around the virtual whiteboard than now. No better time to pick up the phone and offer your services, pick up the phone and ask for help, pick up the phone and check in. Having rallied our own network, EIT InnoEnergy is poised to deliver in key fields including the ongoing development of a sustainable battery supply chain in Europe, the development of decentralised energy and the commercialisation of green hydrogen.
Europe benefits from a vast network of start-ups, funders, educators, and research institutes, and out of adversity we can continue to forge a sustainable, long-term future together.
Please note, this article will also appear in the third edition of our new quarterly publication.