by Sharon Ha
In this TechCrunch article, Hemant Taneja, founder of Advanced Energy Economy, and Managing Director at investment firm General Catalyst, predicts that solving climate change and the energy crises lies in unscaling energy; creating alternatives to large power plants. He asserts that the government and energy companies need to support and incentivize entrepreneurs to rethink existing energy markets; less than 2% of the Federal Research & Development budget was spent on energy and big energy companies spend only 0.3% of their revenue on energy R&D. However, energy must become more of a priority because not only will unscaling energy allow for more creative and accessible solutions and prevent further climate change, it will also help the job market and lead to economic growth. Taneja predicts that new technology and entrepreneurship in energy will reinvigorate the market and consumer transactions, much like the inventors of Uber or Skype did to the transportation and communications markets.
However, governments continue to create policy that prevents innovation and unscaling. SolarCity, a successful energy start-up that helps develop solar power systems for homeowners, had to stop service in Nevada because the state government lowered the price homeowners were paid for their excess energy, after being pressured by primary Nevada energy distributor NV Energy.
Despite this, Taneja remains hopeful that start-ups can shake up the energy and utility market, after seeing the disruption of other markets such as Airbnb in hospitality, or Uber in transportation. New technology allows for companies to build and imagine new ways of producing and purchasing energy, Additionally, there are more platforms than ever that can be used by energy companies to connect with customers, such as phone and computer apps.
Companies like Tesla and Oscar are leading the way in disrupting the energy and utility market, while smaller start-ups, such as GridCo Systems and Varentec emerge. These start-ups are reimagining the electric grid as a network, in which power is utilized through a range of technologies, such as solar panels and electric batteries. The unscaling of energy will lead to the home becoming a smaller version of a power plant. It will also lead to cheaper, cleaner energy. However, it requires that existing power companies and regulators invest in new businesses and technologies, and encourage risk-taking and entrepreneurship.
General Catalyst. “Hemant Taneja Managing Director. General Catalyst. Accessed February 16, 2016. http://www.generalcatalyst.com/team/hemant-taneja
Taneja, Hemant. “Unscaling Energy.” TechCrunch. Accessed February 16, 2016. http://social.techcrunch.com/2016/02/13/unscaling-energy/.