Where is Europe standing in energy innovation?
Innovation is inextricably linked with governmental regulations because they have the power to create new markets. For example, when the European Union (EU) agreed to end combustion engine sales by 2035, it created a business for non-combustion engine vehicles.
Europe really is in the forefront when it comes to these policies; only Canada and Europe have transformed the 2050 zero-emission objectives into a law - which means that this market is an inescapable reality, and so is the innovation that will drive it.
When you choose to invest in an idea, what is your central consideration?
EIT InnoEnergy has a unique approach to investment and innovation. For each case we check six main KPIs. Of these, three are related to energy and three are related to the economy. Energy-wise, it has to decrease the cost of energy, decrease greenhouse gas emissions, and increase the security of supply. Economically, the innovation has to create jobs and growth while also increasing the competitiveness of the European economy. Overall, it is not only about innovation, but about creating industrial traction too - only then jobs are created and a real transformation is achieved.
Give us examples about innovations you have invested in and are real game changers?
The creation of Northvolt is definitely one, given that it is the first non-Asia-based battery manufacturer. Northvolt has completely transformed the sector in only five years, which motivated big corporations like Volkswagen to jump into the game. We now estimate that by 2035, they will only have EVs on the road.
The second one is CorPower. Here, we took inspiration from cardiology. The heart is a fantastically efficient organ, which can beat non-stop for a person’s entire lifetime. So, for unparalleled efficiency, the instruments used at CorPower mimic the way the heart works in harvesting the energy of the waves. Starting in 2011 with that idea, CorPower is now commercial, producing energy through waves every single minute - all 8000+ hours of the year.
Given what you are saying, would I be right in assuming that your investments carry a high level of risk?
We love risk. Innovation requires risk.
Think about the idea of mimicking the heart - maybe one out of 1000 ideas of the sort work. But if it works, it completely revolutionizes the market. Our biggest brand appeal lies in the fact that we ‘de-risk’ those risks. If we support the innovation, they will normally go the distance with growth.
How do you mobilize the funding for these projects?
Funding is not a problem. Money is just a means - the real resource challenge is people. The scarce resources are the true pioneers who carry these innovations, and also when we scale up those innovations into industrial giants, the people to power them. Just in batteries, we are missing 800.000 people; in PV we are missing 400.000, in hydrogen - 7.000. We are short of people.
What do we do then?
We have to train them. Today 20% of our investments go to education and training. Skill is the scarce resource we will be facing, so we are trying to respond early.
What is the role of these new technologies in relation to the targets for 2050?
2050 is too far ahead - I think we can make huge improvements by 2025. Let us talk about PV for example. PV is a technology where nothing moves. In any other technology something moves, be it blades or turbines or combustion engines. This means that the life expectancy of PV is tremendous. Also, the energy the sun provides is limitless, the cost of generation of PV will become extremely marginal extremely soon, and everybody has access to the sun, which means that no country can claim it only for themselves. All of this adds up to almost free energy in terms of input source as soon as 2030, which will bring unthinkable advancements - limitless water thanks to limitless desalinization is an example. So, we are entering an era when energy will be almost free, and PV will be a big part of it.
And what about Hydrogen?
Hydrogen is the only known industrial innovation that can decarbonize steel, cement, fertilizers, and aluminium. Today, those 4 industrial processes contribute to almost 25% of CO2 emissions. The debate is often around the cost of producing hydrogen sustainably through electrolytes, which is 4 USD / KG. Traditional production of hydrogen through hydrocarbons costs 1.5 USD / KG. At first sight - green hydrogen is not economical. This is actually false. In the end product of a car produced with green steel, the price difference is only 1%; the customer will certainly be willing to pay this difference. In tomatoes, using green fertilizers will render the end product only 0.1% more expensive - also a difference the customer will be willing to pay. So, hydrogen is not ten years away, it happened yesterday.
What are your priorities for the coming years?
We want delivery of our promises for 2025. On batteries, we want an additional GDP in Europe of 250 Billion Euros per year. On PV, a 40 billion GDP increase and half a million new jobs. On hydrogen, 100 billion new GDP, and 100.000 new jobs. These are our key objectives in terms of impact to the energy transition. Internally, we want to raise 700 million more to double our impact, because our impact is what drives us.
