Commercial Banking

How digital tech is helping to fight climate change

Andreas Bubenzer-Paim
Technology Banking

There’s a growing interest in clean energy and the digital technologies that will help drive adoption. So far in the United States, more than 80 cities, five counties and two states, including California, have committed to 100% renewables, according to the Sierra Club. And six cities have already hit the target.

Panelists sitting at front of room, with various banners behind them related to the panel discussion.Technological advances related to the Internet of Things (IoT), artificial intelligence (AI), and blockchain, promise to help accelerate the energy transition. Against this backdrop, I was excited to participate in the recent Global Climate Action Summit in San Francisco. As part of the summit, I joined a panel discussion, organized by L’Atelier BNP Paribas Americas, Bank of the West, and hosted by DocuSign, that examined how digital technology can help fight climate change and preserve our oceans.

Here are some key takeaways from the event:

Legacy industries are hard to disrupt

“By nature, the energy industry is old, conservative, slow-moving and riddled with regulation, so it takes a lot of time to change,” said Emily Fritze, director of strategy and business development for Powerhouse, an Oakland-based coworking space and venture capital firm offering seed funding to startups devoted to building solutions for clean energy.

In fact, most of the investment and traction in renewable energy has occurred over the last 10 to 15 years, according to L’Atelier BNP Paribas’ report, “Greentech: Will Digital Technologies Help Accelerate the Energy Transition?

Infrastructure needs to be modernized

A smart grid is an electricity network that incorporates many technological upgrades to the current infrastructure, including smart meters, smart appliances, and renewable and efficient energy resources. Power grids were originally centralized, controlling the energy flow on demand to passive electricity consumers. With the advent of new ways of producing energy, such as wind and solar power, many believe the need for more sophisticated, flexible, and efficient infrastructure has become acute.

Innovation around smart grids holds much promise, said panelists. Improving the efficiency of the U.S. electricity grid by 5% alone would be the equivalent of eliminating the fuel use and carbon emissions of 53 million cars. In fact, the current power grid is generally regarded as obsolete, and the latest estimates indicate that it would require $1.5 trillion to $2 trillion to modernize it, according to L’Atelier. To replace it would cost $5 trillion.

Decentralization of energy production

Another paradigm shift is that the end-consumer has also become an energy producer.

“We’ve seen the emergence of people trying to go entirely outside traditional utilities to get their electricity,” said Sebastian Niestrath, SVP of Infrastructure Platform Ventures at Innology New Ventures. “This is going to be an increasing trend, and regulators are going to have to deal with this or hopefully change.”

Fritze noted that several companies are developing their own Blockchain solutions targeting the energy sector. Electricity was bought and sold via Blockchain technology for the first time in Brooklyn in 2016. Led by Siemens and a startup called LO3 Energy, this initiative, which was designed on a microgrid, enables residents who were producing excess solar power to sell it to neighbors on a peer-to-peer Ethereum-based transaction platform.

Better storage technology

How will communities without sufficient and steady exposure to wind or sun rely on 100% renewables? What technology can ensure that they can turn on the lights? Panelists agreed that a solution for better energy storage is the answer.

Tesla has set out to become the largest producer of lithium-ion batteries with its Gigafactory. The company claims to have doubled the life of its batteries and, in the near future, could improve their capacity by another 20% to 30%. Overall, the cost of lithium-ion batteries has fallen by 73% since 2010 and, in certain specific situations, lithium-ion batteries can actually compete with natural gas plants as a means of compensating for power demand peaks, according to L’Atelier.

But energy storage that meets real-world demands will be a challenge. Going from 40% to 50% renewable energy in California, for example, would require 10 gigawatts of storage. “That is like 10 additional Hoover Dams,” said Thomas Boener, co-founder of CalWave, a wave energy startup out of Lawrence Berkeley National Laboratory.

And what will the energy sector look like in 20 years?

“By 2030, our homes will be more energy-autonomous,” Niestrath said. “I believe that homes will actually be able to go off-grid during some hours during the day. By observing daily patterns, it may be possible to decide when individuals should send electricity to their neighbors, put it in storage or use the bandwidth for their electrical vehicles.”

“We will consistently see the cost of storage for solar and wind decrease dramatically,” Fritze added. “I’m very optimistic about the adoption of clean energy, including electric vehicles, which are already hitting the public transportation space. The road to 100% renewables will reach past 2030, but I am excited about the progress we’re making today.”

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