Electric Dreams-Green Energy Climbs The League with Investments in the UK

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Shadrach   in Technology & IT

Last updated: 24 January 2020, 06:59 GMT

January inevitably brings with it a flurry of figures summing up the UK entrepreneurship sector's success in the previous year.

This year began with a series of estimates — compiled by Tech Nation and Dealroom.co for the government-sponsored Digital Economy Council — leading to a 44 per cent increase in innovation in the tech sector, with Fintech, A.I. (And dark tech) leading the race to pay out venture capitalists.

There are no surprises there. Fintech and A.I have been around for the last few years. Have appeared as advertising-grabbing model kids for UK. Tech and this latest round of figures show that they still account for the lion's share of a venture funding pot of over £ 10 billion between them.

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Fintech firms raised £ 4.1 billion collectively in 2019 and, as the report quite gladly points out, this figure was three and seven times higher than the sums secured by their German and French counterparts. In the meantime British A.I. And the tech deep ventures bagged just over £ 2bn.

But like, U.K. Basks in some unseasonably warm January weather and country digest data showing that the last ten years have been the hottest on record, perhaps it is exciting to remember that the green electricity sector is number three destination for investor funds.

Significant Deals

This is a corner of the business industry which has seen some interesting acquisitions over the past year. The largest of these was an acquisition of $260 million by the Mitsubishi Corporation of Japan in OVO Power-a transaction that moved the Uk renewable electricity provider above the $1 billion threshold in value. In other places, $81 million was invested in Oxford PV and Bboxx solar power companies. Overall, the sum raised by players in the sector amounted to around $1bn, representing an increase of 45 percent on the figure for 2018.

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It is tempting to mention the Greta Thunberg impact and/or the upsurge in climate change over the past year as reasons that have helped to fuel investor interest in a business that should play a key role in the overall reduction in carbon emissions, if all goes according to plan. On the other hand, when making investment decisions, it seems unlikely that a backdrop of grass-roots activism will be at the top of the minds of VCs.

So that raises a question. That triggers an increased interest from VC in the UK. Clean Electricity?  

The tone has changed according to OVO Energy CEO Stephen Fitzpatrick.

"When you look at all government, consumer, activist and corporate activity over the past 24 months, it's clear there's been an explosion of interest in clean energy

he says.

And the conversation got more tense as well. "We have three decades to get off the oil," he says. "So it is no wonder there are more projects."

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A Shifting Focus

When he sees it, the investment emphasis is changing, too. In the past, he says, investment in power generation and national or regional infrastructure, such as large grid networks, tended to be in. There are already investment opportunities in what he defines as distributed energy (batteries, solar panels, etc.) and the kinds of technologies that will support and allow individuals to reduce their personal carbon footprints.  So instead of throwing their capital into, say, power plant customers now have incentives to fund consumer-driven devices and services.

"It becomes more like the consumer electronics market in that way

says Fitzpatrick.

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Keeping Consumers On Board

Nonetheless, Fitzpatrick claims it will be tough to move into a zero-carbon environment when customers are offered inexpensive product options. 

"When you look at the improvements that need to make, that's not something for which you can control fully, Regulation is important, but you have to develop technologies that deliver the consumer the lowest possible cost.

Of course, good for the planet but also a chance for entrepreneurs. OVO Energy was founded in 2009, and is essentially a green power retailer. But it has advanced to digitize and simplify its customer interaction and is now able to expand globally. It has started operations in four other countries over the last year-helped by the Mitsubishi investment-while also developing green power products, such as a battery storage system built in collaboration with Nissan.

Yet Fitzpatrick assumes the U.K. Is in a good position to take the lead in progress on clean power.

"Britain was one of the first countries to open up its energy market so people from around the world are looking at how the market here operates

he says.




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