My father had worked in an automobile repair plant that provides sheet metal fabrication and paint coating services around forty years ago. His work was to move many color cans from the corner of the storage, brought out the original paint color of the car, and started to paint. However, no matter how hard he tried, there would always be some slight color differences. Soon after, some businessmen started to provide a service of helping matching existing paint color. My father was able to complete his job with high customer satisfaction afterwards.
Investment in solar power plants has been a hype around the country these years. Signing a twenty-year contract with Taipower and making stable profit by selling electricity back to the grid is a good investment for many investors. Recently, however, lots of power plants in central or southern parts of Taiwan are asking for sale. The issue is some solar power plants, in just three to four years time, are generating less power than expected, key issues is the malfunction of the inverter caused by the conductive surges induced through the power system. This is going to be a big problem in the next decades. Imagine, if there is a green startup to provide maintenance services of replacing inverters, just like my father’s case, those solar power plants will no longer to be sold. Isn’t that a good business?
No matter what era we are in, business opportunities are always there, we just need to find out.
When the new government took office, the project of DIGI plus, along with the five plus two emerging industries became the hotspot, out of which is green energy. The efforts put in Shalun Green Energy Science City, solar energy development, offshore wind energy deployment, renewable energy certificate, carbon trading and even green finance are numerous. For green entrepreneurs, I think this will also be an unprecedented opportunity. New energy is absolutely the key to boost the economy for both Taiwan and other countries. It requires innovation, thinking out of the box, which is always driven by startups. There are five market trends that will soon rule the energy industry,
The development of decentralized energy systems will foster competition. If a green startup can dominate newly-created market and build capital barriers, it can rewrite rules of the game
Due to the characteristics of renewable energy, we are currently moving from centralized generation to a decentralized generation. This requires high-quality integration of regional energy. In conjunction with electricity liberalization, segments including smart grids, regional virtual power plants, demand management, innovative applications of Fintech in green energy, vehicle networking, IoT & smart home automation, the way we do energy business will be far more different than we used to. It means that green startups will have the opportunities to rewrite rules of the game and become the leader of the industry within 15 years if they can dominate newly-created market and build capital barriers.
Inspirational thoughts on the basis of science and technology will work in conjunction with cross-border integration
Many people are concerned that Taiwan lags behind in R&D investment and afraid that there will never be another TSMC. The concern is real, but it is not helping to solutions. It is not to say that technologies are things we can overlook. We shall understand for green startups, the ability to choose a battlefield is also very important. Since R&D is no longer our strength, we should find out which battlefields can we play in the market, find out other possibilities to innovate, such as a solar startup can develop integrated services with new finance tools.
Where we give our attention dictates how we perceive opportunities, instead of worrying, we can bring inspirational thoughts on the basis of science and technology. Innovation does not mean something fancy or tech, more often it is an enlightenment. I understand many of us prefer walk the talk rather than talk the talk. Still, it is also true that if there is no thought behind technology, technology will not serve its full potential, but only to our desire. Energy will work in conjunction with IoT, with lots more traffic, data, storage and energy consumption, which is different from the past in which we can conquer the world with only one strength. Therefore, walk the talk engineers will work with talk the talk thought leaders, they will learn to meet in the middle and complete tasks together. Energy is the best battlefield to practice the ability and willingness to integration.
Decisions made by the government will determine the development of local energy startups
It is true that some consumers favor green companies, while some do not. They argue nowadays green companies can only survive with government support, it is not a free market. Another way to look at it, since government acts on behalf of its people, it is fair for all of us to chip in to resolve environmental problems. The key is, we need government use systematic thinking when dealing with energy issues, so we can trust on it to build organic ecosystems like farmers, ultimately to benefit ourselves. Let me take carbon emission trading as an example, instead of thinking too much about how to avoid flaws, if the government can make good use of cap and trade, provide incentives for renewable energy companies to invest, it will undoubtedly help green startups grow as easily as mushrooms grow.
Government can help to create the ecosystem. For example, there is an increasing demand for medium- and large-power engineering talents due to the increasing installation of renewable energy. However, most of young people from electrical engineering field specialize in small electric power (mV) in order to get a job in semiconductor-related industries after they graduate. As a visionary, government shall incubate talents needed by the next generation of businesses. In the long run, this will foster a healthier and sustainable industrial ecosystem.
The appearance of new breed aggregator will improve the efficiency of the market
Aggregator is a platform role that increases market efficiency by matching supply and demand more efficiently. Energy market is also a market where data is king. Therefore good opportunities for new breed aggregators to develop new market roles in commodities such as electricity, carbon credit, or even investment in green industries. To further expand the idea, aggregators in demand respond programs collect a large number of users (contract capacity of several MWp or above), and earn incentives by lowering the electricity demand in peak load as an aggregate.
Aggregators in carbon trading market can aggregate carbon credit from many renewable energy power plants and sell rights to companies that requires carbon reduction. Aggregators in green investment is also needed. For oversea investors who are interested to invest in local market, if they can partner with local startup accelerators that understand energy policies or regulations, it can immediately improve the efficiency of the transaction process. Green startup accelerator is also another form of aggregator.
The strategy to pursue friends of the most beautiful girl in game theory of love will help startups have a much higher chance of success
The main character in the movie “A Beautiful Mind”, who is also the winner of the Nobel Prize for Economics, John Nash, had proposed the game theory of love. In which is that when a group of men pursue the most beautiful girl at the same time, most of them would fail. Yet, if they turn to pursue the friends of the most beautiful girl, the second best solution, the chance of success will be much higher. The holds true in energy sector. When most people rush into solar power plant development (the most beautiful girl), and you start to development energy applications to traditional energy-intensive industries such as agriculture, livestock husbandry and aquaculture (the friends of the most beautiful girl), it will be more profitable for green entrepreneurs.
The key to success is the ability to choose the battlefield. Next, we will talk about how to avoid the pitfalls that green startups might encounter along the way.
This article is also published in Storm Media（Title：誰說綠色發電不可能賺錢？我所看見的5個能源新創趨勢）