In a bid to advance sustainable energy solutions and foster innovation in addressing climate change challenges, the Global Energy Alliance for People and Planet (GEAPP), in collaboration with the Observer Research Foundation (ORF), recently organised 'The Energy Transition Dialogues' (TETD) in New Delhi. The highlight of this prestigious event was the recognition and awarding of four remarkable start-ups under GEAPP's groundbreaking initiative, ENTICE (Energy Transition Innovation and Catalyst for Entrepreneurs).
ENTICE was created to incentivise innovations on a large scale for energy transitions, targeting a critical funding gap faced by start-ups during the Series A funding stage. Often overshadowed by the allure of Series B and C funding, many promising start-up ideas remain trapped on the drawing board.
Outlook Start-Up engaged with the winners to gain insights into their innovative projects and their vision for the future of the CleanTech sector.
In the start-up world, we often talk about "investment," which is the money that keeps an idea alive and helps it grow. However, access to finance for Indian GreenTech start-ups remains a concern even though India ranks ninth in terms of climate tech investments, as per a study titled "Five years on: Global tech investment trends since the Paris Agreement by London & Partners and Dealroom."
"CleanTech is changing quickly with global solutions, whether they are physical technologies or digital ones. Investors are realising the importance of both the quality and size of investments. In India also you will see a plethora of announcements happening the way you used to see in other sectors," said Vishal Pandya, co-founder of REConnect Energy which won most scalable solution, on what is the big picture ahead for the CleanTech sector.
ReConnect Energy clinched the "Most Scalable Solution" award for its forward-thinking platform that seamlessly integrates various Distributed Energy Resources (DERs) and aggregates over 500 MW of energy.
Discussing the challenges of securing investments in the sector, Mahi Singh, co-founder and COO of Cancrie, pointed out that investors often seek stable revenue streams, an established customer base, and positive product reviews. She emphasised that introducing a new product and building customer awareness and trust can be time-consuming. Therefore, investors need to adopt a CleanTech perspective, recognising that the innovations being developed in this sector are entirely novel, and the time required for these innovations to mature and gain traction is relatively long.
Investors want scalable businesses to invest in, but they don't see CleanTech as an opportunity. Anurag Dhyani, VP of REConnect Energy, says, "With the growth in infrastructure there are new avenues arising and ideas that seemed boring a few years back are getting recognition within the CleanTech, hence the attention of investors."
The Indian electric vehicle (EV) and mobility sector has experienced significant expansion, attracting substantial investments from venture capitalists (VCs) and private equity firms. "There are various sub-sectors within the climatic space where a lot of investment is being poured in," Dhyani added.
Contributing to the discussion about new investment possibilities, Dr. Akshay Jain, co-founder of Cancrie, emphasised the importance of aligning CleanTech solutions with the tangible benefits that customers or end-users can experience. He stressed the need to demonstrate profitability and long-term outcomes to investors. "You need to tie your solutions with the quantitative benefits that the customers or the end users can get and that will be a game-changer as far as the perception of investors in CleanTech is concerned," he added.
"The challenge is that there are no financially viable business models around new solutions in CleanTech. If you don't have a financial business model, who's going to invest?" said Ayush Misra, CEO of AmpereHour Energy, the start-up awarded under the most holistic solution category. It leverages second-life batteries, expecting a surge to 112 GWh/yr.
The CleanTech industry encounters significant challenges related to evolving procurement practices, rising facility costs, and the reliability of supply chains. These issues amplify the overall risk, particularly when there's no clear roadmap to achieve market success and profitability. In response, Misra emphasises, "If we consider the supply chain as crucial as oil, then it becomes a matter of national security. In such a case, it's essential to ensure that these vital components are produced within the country. Otherwise, we become overly dependent on imports, which can be risky."
In CleanTech, as in any industry, building a supply chain is essential. CleanTech is unique because it's entirely new, and the focus is now on integrating cell and module technologies in solar. However, the materials required for CleanTech are not yet cost-competitive and need further development through investment and research. Without these investments and R&D, cost competitiveness won't be achieved, requiring a significant upfront investment and patience to become cost-competitive.
At 'The Energy Transition Dialogues' (TETD), the fourth start-up honored with the most innovative solution award under ENTICE was vFlowTech Pte Ltd. Its Vanadium Redox flow battery outperforms traditional flow batteries in critical aspects such as thermal tolerance, energy density, and round-trip efficiency.
Dr. Avishek Kumar, the founder and CEO of vFlowTech, shared his perspective on supply chain challenges and investment saying, "In CleanTech, as in any industry, building a supply chain is essential. The sector is unique because it's entirely new, and the focus is now on integrating cell and module technologies in solar. However, the materials required for CleanTech are not yet cost-competitive and need further development through investment and research. Without these investments and R&D, cost competitiveness won't be achieved, requiring significant upfront investment and patience to become cost competitive."