Energy transition is a key priority for India as we move towards a low-carbon economy. In addition, the issues of energy security and energy inclusion are also critical for India given the current global geopolitical situation and its desire to provide power to all citizens. The role of venture capital in supporting entrepreneurs driving innovations in energy is essential. Incorporating externalities in investment decisions is required for our investment process.

“Avoid, mitigate and re-compensate” energy use, is the primary concept discussed in IFC’s published investment principles. “Avoid” refers to energy conservation, using energy when you “need to”. The cleanest form of energy is the energy you do not use. However, if use cannot be avoided, mitigate its impact through energy efficiency measures, reducing waste in the system and other appropriate actions.

Only after these two measures are taken, should you look at re-compensating fossil fuel energy through renewables to reach new zero.

At Peak, we seek to identify game-changing solutions that can solve for critical issues significantly impacting energy transition and climate change. HST Powers, a company we funded, has built software solutions for optimizing large scale solar installations globally. Their product is being used in over 100 countries by clients to generate higher energy output on solar farms. Ion Energies, another company in our portfolio, has built Battery Management Systems for thermal management and superior performance. The recent cases of fires in EV’s has highlighted the need for superior BMS. Endurance Technologies acquired their BMS unit last month for USD 40 MM. Energy Web Foundation, another portfolio company, is the world’s first and largest enterprise level open source blockchain, focused on the energy sector. These companies demonstrate the role on technology in the energy nexus.

While EV’s have received front page coverage, it is also important to focus on grid storage technologies. As the proportion of renewable energy in the grid increases, it creates an intermittency issue which needs to be addressed through energy storage solutions. Lithium ion is perhaps not the most suited technology for long duration storage. We have been evaluating companies working on several alternative storage technologies which are focused on addressing these issues. More reliance needs to be on materials which are available in abundance and at a low cost.

Green hydrogen is the center of attention currently and we have looked at a few companies in this space. While currently less than 2% of global hydrogen production, the potential is huge for decarbonizing hard sectors such as steel and cement. Green hydrogen has the potential of taking a 10- 12% share of global energy usage by 2050.

Energy is a central theme for us at Peak and we see the space as an enabler of massive opportunity in the coming years. This space requires forward-thinking, smart capital and deep research in order to be successful. We will continue our efforts in providing catalytic capital to entrepreneurs in this space.