Developing economies need one resource above all else: electricity. Over recent decades the expansion and development of electrical infrastructure i.e., power grids, has resulted in the increased use and emissions of Sulphur Hexafluoride (SF6), the world’s strongest greenhouse gas.
This is because of SF6’s common use in switchgear, grid-scale switches that are key hardware components found throughout the electrical infrastructure. However, soon this could be a thing of the past.
Electricity plays a vital role in both developing economies and improving living standards. We have seen this to a great extent in China and India, particularly in recent years.
Right now, more than half of global energy consumption takes place in the Asia-Pacific region, where around 85 per cent comes from fossil fuels. However, 10 per cent of the population across the region still lacks access to electricity, and many more rely on traditional biomass methods, such as wood combustion, for heating and cooking.
To address these problems, as well as those posed by rapid urbanisation and industrialisation, energy demand is rising. Because of this, I believe considerable opportunities exist to avoid the long-term lock-in of energy technologies and infrastructure which exacerbate the problem of climate change.
It is vitally important that rising electricity demand is met by renewable and low-emission energy sources. However, we should not overlook other factors such as the infrastructure used to transport that energy: transmission and distribution grids are two examples.
For energy transition to be truly successful, we need to ensure that the whole energy system is ‘green’ and not solely focus on energy generation itself.
Business not as usual
Young climate technology companies have a vital role to play as it is increasingly clear from a climate perspective that the ‘business as usual’ model is no longer viable. We need fresh thinking to develop innovative technologies that will help us reach an energy system free of harmful greenhouse gases.
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The energy sector is notoriously conservative. From my experience, established players tend to be sceptical of new ideas and technologies. This is where climate tech companies can demonstrate that sustainable innovation is not only important from a sustainability perspective but can also have a positive effect on a company’s bottom line.
When my daughter Matilda was born in 2015, I developed a much clearer life perspective. I wanted to see a future for her where the energy we use every day does not destroy our planet. This played an important role when I decided to join my Co-Founders in starting Nuventura five years ago.
My first in-depth encounter with sustainable energy generation was when I studied nuclear engineering at the technical universities in Aachen, Germany, and Gothenburg, Sweden. Surprisingly, fission, fusion and renewable energies were all bundled under ’alternative’ energy generation, even as recently as the early 2000s!
I realised that I did not believe fission to be a viable ‘bridging technology’ for the energy transition; renewable energies could be the only solution. I spent the next five years as a consultant, advising companies about capital efficiency in the renewable energy sector. I also consulted on energy efficiency optimisation in the heavy industries sector.
In 2014, I started my first company. It was not energy-related, but it wasn’t long before I missed working in that space. In 2017, I decided to hand over operations to a new management team, and joined my Co-Founders Manjunath Ramesh and Nikolaus Thomale, after they showed me how much impact we could have, particularly in helping to reduce the energy sector’s use of SF6 by developing switchgear technologies which replace the extremely potent greenhouse gas with dry air, essentially normal breathable air, without any moisture.
What is SF6?
Greenhouse gases are synonymous with any conversation surrounding the energy sector and climate change. Despite it not being very well known, Sulphur Hexafluoride (SF6) is the world’s strongest, with a global warming potential (GWP) of 25,200.
This means that one kg of SF6 is equivalent to 25,200 kg of CO2. The European Union banned SF6 for most applications in 2014, but this did not extend to the energy sector due to a lack of alternative options at the time.
More than 80 per cent of all SF6 produced is used in the energy industry as an insulating medium for gas-insulated switchgear (GIS). Switchgear is a key component found within all electrical infrastructure. They function like a grid-scale light switch – they turn different sections of the grid off and on.
SF6’s emissions are currently at an all-time high, with global annual emissions (close to 8,000 tons) equating to the yearly CO2 emissions produced by around 100 million cars. To make matters worse, in a business-as-usual scenario, the use of SF6 is expected to grow by more than 75 per cent by 2030.
Furthermore, though recycling of used SF6 is common, it is normally not destroyed because of the difficulty and cost associated with this destruction. Therefore, it can reasonably be expected that all SF6 that currently exist and that will be produced in the future will persist for thousands of years, whether in gas-insulated switchgear equipment or, ultimately, in our atmosphere.
Due to SF6’s environmental impact, regulators such as the European Commission and California Air Resource Board (CARB) are expected to phase out its use in the energy sector by 2031. The Chinese government has also begun an evaluation of SF6’s role in the energy sector. It’s for these reasons that sustainable alternatives are urgently needed.
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Nuventura offers such an alternative. We have developed the world’s first medium voltage (up to 36 kV) GIS which replaces SF6 with dry air. We’ve done this while maintaining the qualities which make SF6-GIS attractive around the world, compact physical dimensions, high reliability, and low maintenance requirements.
Innovation challenge
Climate change is arguably the biggest innovation challenge humanity has faced. We have limited time to greatly reduce greenhouse gas emissions and reach net zero by 2050. ESG (Environmental, Social, and Governance) industries and climate tech will be vital in the development of current and future technologies to make this transformation possible.
For example, Indonesia plans to manufacture 600,000 electric vehicles and 2.45 million electric motorcycles by the year 2030, according to the ASEAN energy outlook for 2022. According to the same report, Southeast Asia’s energy requirements are expected to rise by 60 per cent by the year 2040. So, it is no surprise that companies in this space are attracting growing interest from investors.
As countries around the world continue to experience the negative effects of climate change, this is only likely to accelerate. The most recent Intergovernmental Panel on Climate Change (IPCC) report published earlier this year, repeated calls for drastic action. This was echoed in Glasgow’s COP26.
It cites a plan for countries and businesses to work closely together to accelerate the adoption of affordable climate technology around the world.
This increased focus on ESG in private markets is leading companies and investors to adapt their strategies, along with emerging regulations such as the European Union’s ‘Fit for 55’ plan, which targets reducing greenhouse gas emissions by 55 per cent by 2030.
Many companies have also made public commitments to net-zero and have set science-based targets. Moreover, multibillion-dollar mega-funds are increasingly being channelled into climate tech.
However, one alarming aspect we’ve experienced within the venture capital space, that should be highlighted, is that VCs remain trapped in fund structures and life cycles associated with Tech (Software) companies.
Climate and deep tech, especially hardware, can’t be assessed by the same KPIs (Key Performance Indicators) as software companies and consumer-oriented companies such as e-commerce.
VCs must be able to invest taking into account longer-term horizons. They should not demonise CAPEX (Capital Expenditure) as they do today and must accept that software alone will not save our planet. Many VCs are very vocal about this and repeatedly highlight it, but only a fraction of them act accordingly.
I plan to devote the rest of my professional life to fighting climate change. Part of my motivation is that I just love engineering! Being able to invent new technologies that solve real physical problems is a genuine privilege.
I also see climate change as the single biggest problem for most species (humans included) on our planet. So, if what I love to do can help to solve the many challenges posed by climate change, why not do it?
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