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National Grid Partners

As the climate challenge becomes more evident and urgent, National Grid has redoubled its commitment to a fair, clean and affordable energy transition. In 2020, the company unveiled its Responsible Business Charter and a commitment to reach net zero carbon emissions by 2050. Last year, it announced both an initiative to eliminate fossil fuels from its US gas and electric systems and its vision to help create clean energy hubs throughout the US Northeast by leveraging solar, offshore wind, hydrogen, storage and transmission.

Achieving these commitments will require fundamental shifts in the way energy is produced, delivered, and consumed in our operating regions of the United Kingdom, New York and Massachusetts. Even fulfilling interim commitments by 2034 is no small task. National Grid needs to eliminate ~13 million metric tons of annual emissions (CO2 equivalent). Most of the reductions (~75%) need to come from emissions associated with our customers’ use of natural gas and electricity (what’s known as Scope 3 emissions). But further reductions are also required in emissions from our own operations (Scope 1) and from electricity network line losses and energy purchased for use in our facilities (Scope 2).

At National Grid Partners, we’ve developed a framework and a series of investment strategies to identify startups that can help National Grid achieve our net zero commitments. But we also believe the scale of the challenge requires sharing knowledge and finding ways to collaborate across the broader energy and investment ecosystem. So today we are kicking off a series of posts on the various technologies required to decarbonize the energy industry; the startup ecosystem growing around these areas; and some of the collaborations we’ve forged along the way.

Our hope is that this series of posts will:

help others find startup and innovation partnership opportunities;

start a conversation with fellow travelers who will challenge our thinking and help us identify blinds spots;

identify opportunities to engage other utilities interested in taking on the challenge through the NextGrid Alliance, our industry collaboration platform.

In this first post, we share our framework for categorizing more than 500 startups across three dozen technologies. In upcoming posts, we will deep dive on several individual categories, including market & policy drivers, value chain segments, the landscape of startup innovators and capital markets activity. We will also highlight related collaborations National Grid Partners is driving inside National Grid.

As a utility at the heart of the energy system, National Grid knows its decarbonization efforts are directly tied to the overall decarbonization of the economy. We therefore have taken a broad view of the key technologies required to help National Grid and other utilities on the road to net zero. We’ve identified three themes that will be critical to achieving this transformation:

Producing and delivering CO2-free electricity to customers, mostly renewables;

Decarbonizing end uses across industry, buildings and transportation by converting them to run on electricity and/or greenhouse gas (GHG) neutral fuels;

And implementing technologies to plan and monitor progress toward net zero, mitigate emissions that cannot be eliminated, and adapt to the effects of climate change.

Introducing our framework

Themes and categories required to decarbonize the energy industry:

The electricity sector contributes 25% of global GHG emissions. In the short to medium term, the fastest way to decarbonize the electricity sector is by deploying solar and onshore/offshore wind, which are proven, mature and, in many regions, the lowest-cost form of new generation. But with the benefits of renewable electricity come new challenges, like connecting to the grid and intermittent generation. These require technical and business-model innovations to ensure an affordable and reliable grid.

To maximize the share of electricity coming from carbon-free sources, new generation, transmission and distribution infrastructure must be built. But utilities can and should deploy new technologies that enhance the value of existing infrastructure as well by, for example, expanding its capacity or making it more flexible to accommodate changes in supply and demand. Some examples follow:

Startups and investment into the CO2-free electricity theme

Theme 1. CO2-free electricity:

We are tracking ~150 companies in this category that have collectively raised ~$14 billion in private funding. National Grid Partners has invested in and/or facilitated business unit collaborations with six of them (SparkCognition, LineVision, Leap, TS Conductor, Encoord, Form Energy).

NGP’s investment in LineVision is unlocking additional capacity on National Grid’s (and other utilities’) electric transmission lines. Too much current passing through a line can cause it to overheat and sag, a potential fire risk. Typically, the available capacity of overhead lines is statically rated, with conservative estimates based on the season and a large safety buffer. LineVision’s dynamic line rating technology relies on non-intrusive, low-cost sensors and analytics to monitor local weather conditions and conductor line sag in real time. National Grid and its customers are realizing significant cost and environmental benefits via deployments of LineVision’s technology in the US and UK.

While cleaning up today’s electricity mix can get us part of the way to net zero, there are many economic activities that rely on the direct combustion of fossil fuels. Some, like light-duty transportation, are best decarbonized through electrification. These shifts could place new strains on electricity grids that will need to be managed.

Startups and investment in the Decarbonize Transport theme

Theme 2. Decarbonization of industry, buildings and transport:

Other activities, like space heating and industrial process heat, can be partially addressed via electrification and efficiency improvements. In many cases, however, these applications will also require GHG-neutral fuels like renewable natural gas, hydrogen, and synthetic options. To limit the cost and time it takes to transition, these fuels should leverage existing energy delivery networks and minimize the changes to equipment inside customer homes, office buildings, and factories.

Startups and investment into the Decarbonize Buildings theme 

Startups and investment into the Decarbonize Industry theme

We are tracking ~230 companies relevant to decarbonizing industry, buildings and transport, which have collectively raised ~$10 billion in private funding. National Grid Partners has invested in and/or facilitated business unit collaborations with eight of them (Sensat, Viridi, Carbon Lighthouse, Copper and four others yet to be announced).

Our portfolio company Viridi makes ruggedized and failsafe lithium ion battery packs that are used to electrify construction equipment and in stationary storage applications. Its battery packs power the world’s first all-electric skid-steer (made by Bobcat), along with a range of other construction equipment used by National Grid. And thanks to active thermal management technology, their packs are UL-certified to operate safely inside or adjacent to occupied spaces in large, behind-the-meter installations with significantly reduced fire risk.

Lastly, a rapid, just, and affordable energy transition will require detailed monitoring and planning technologies that can help companies make smart decisions about how and when to transition different aspects of their operations, such as how to time the replacement of fossil-fueled machines with clean-powered-alternatives. This will require a suite of new digital technologies that can help organize disparate sources of data and systematize decision-making to ensure environmental targets can be achieved in the most efficient way.

Infrastructure owners will also need to invest in grid hardening and resiliency to mitigate the impacts of climate change such as hotter weather and higher storm surges, many of which are already being experienced.

Finally, as the term net zero implies, some emissions may be too difficult to eliminate. Technologies that remove CO2 from the atmosphere, like direct air capture with carbon sequestration or carbon mineralization, will be required to not only achieve net-zero emissions by 2050 but ultimately stabilize earth’s climate by going net-negative-emissions in the decades that follow.

Theme 3. Plan, monitor, mitigate, and adapt:

We are tracking ~140 companies relevant to planning, monitoring, mitigation and adaptation, which have collectively raised ~$6 billion in private funding. National Grid Partners has invested in and facilitated business collaboration with one of them, Risilience.

A spinout of the Centre of Risk Studies at the University of Cambridge, Risilience has developed a software platform to help corporations assess climate risk (both physical and transition), as well as plan, implement and monitor progress toward net zero. The company combines a deep understanding of climate science and modeling with expertise in corporate risk management to offer a holistic approach to decarbonization. By understanding risk insights, Risilience can generate decarbonization strategies that can be stress-tested and optimized via their platform’s digital twin capabilities. The platform makes it possible to take a quantitative approach to managing climate risk and ensuring an organization’s sustainability agenda maximizes enterprise value.

Each of these themes contains multiple technology categories, most with a myriad of companies, technology options and capital being directed their way. As we launch this blog series, we will be posting about a key technology category within each theme, based on their importance and relevance to an electric and gas utility like National Grid.

Next month, we’ll talk about the role of grid-enhancing technologies as seen in our portfolio companies LineVision and TS Conductor, which are accelerating the rate of renewables deployment on the grid.

In future posts, we will cover additional topics across the three themes of “CO2-free electricity;” “decarbonization of end uses;” and “plan, monitor, mitigate & adapt.”

We’re excited to kick off this conversation with fellow energy companies and climate tech investors. If you’re interested in a deeper discussion on any of these topics or want to make sure your company is on our radar, please reach out to us at kristian.bodek@nationalgrid.com and danielvelez.lopez@nationalgrid.com.

Kristian Bodek is an Investment Director at National Grid Partners. He focuses on energy and climate-related startups and is also responsible for National Grid Partners' limited partner investments in third-party strategic venture funds. Previously, Kristian was a senior member of the power practice at IHS Markit (now a part of S&P Global). He holds a BS in Physics from Bates College; MS degrees in Mechanical Engineering and Technology & Policy from MIT; and currently serves as a Kauffman Fellow.

Daniel Velez Lopez is a Business Development Director at National Grid Partners. He has more than 10 years’ experience researching energy and environmental economics and policy, including work on climate change and renewable energy integration. He has worked at policy think tank Resources for the Future and consulted for both the World Bank and the Inter-American Development Bank. Daniel holds a PhD. in Public Policy from Harvard University.

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