We are surrounded by evidence that the energy transition is well underway. On Earth Day, it seems like a good opportunity to reflect on what’s been achieved and what more needs to be done. The actions the investment industry takes over the next few years will determine whether such goals are achievable.

Where we’ve come from

If we rewind thirty years, 60% of the electricity consumed by a UK home was derived from coal and 10% was from oil. Fast-forward to today, renewables and natural gas are roughly equal at 40%, whilst coal has declined close to zero and is only being used in times of extreme shortage. So it’s clear a lot can be achieved when technology and incentives align.

Looking forward

The coming 30 years promise to be just as dynamic. The UK has among the most ambitious decarbonisation targets in the world for power, and is targeting Net Zero emissions from generation by 2035. Significant questions remain: Can we expand the grid and energy storage quickly enough? How do we ‘decarbonise the internet’? And how do we decarbonise consumption by advancing things like the circularity of plastic packaging?

Driving progress through innovation

As we look around the world for climate solutions providers we are, more often than not, impressed and surprised at the level of innovation and creativity which is being applied to bringing about a decarbonised and circular economy. While much of the new thinking is coming from comparatively small and nimble enterprises. Here we take a look at three companies who’ve developed novel approaches to longstanding problems.

Expanding the grid – Alfen

Power consumption is set to soar in developed countries, as vehicle fleets and home heating are decarbonised respectively by power-hungry EVs and heat pumps. Taking the UK as an example, forecasts from the UK Climate Change Committee expect more than a doubling in electricity demand over the next 30 years. This stands in stark contrast to the last 30 years, in which UK power demand has been stable.

Dutch company Alfen has more than a century of experience in building grid equipment. Today it provides transformer substations, utility-scale batteries and EV-charge-points for use in the home or at destinations such as shopping centre car parks. Alfen is a rare example of a company operating in these new markets which already demonstrates profitability. Policy development in the EU is also likely to support demand for Alfen’s products in the next few years.

 Plastic circularity – Tomra

The prospect of ending plastic use remains a distant one, and as a material plastic remains remains unrivalled in terms of cost, weight, and versatility. However, thanks to continued innovation, more and more plastic types are now recyclable through chemical processes, allowing the original fossil molecules to be re-used.

Norwegian company Tomra is a global leader in manufacturing both reverse-vending machines, for collecting recyclable waste, and waste sorting machines, which are installed at recycling centres. Tomra’s founders are credited with investing the world’s first automated reverse-vending machine in the early 1970s. Sophisticated scanning technology like that of Tomra is taking an increasing amount of the burden off the consumer and every item of plastic which is recycled means one less item at risk of escape into nature, while also avoiding further demand for fossil fuels.

Decarbonising the internet – Ceres Power

Consumers expect access to data to be continuous and uninterrupted. This creates a headache for the operators of data centres, the large, power hungry hubs which store and process the flow of data from the apps and devices we use every day. High uptime requirements mean many data centres rely on diesel generators which, although used infrequently, are highly emitting.

One solution is hydrogen-powered fuel cells, which operate in the same way as diesel-generators, providing reliable, consistent power, but are fuelled by an on-site store of hydrogen, which itself can be produced cleanly via renewable power. The UK is home to one of the leading providers of technology in this area, Ceres Power. Ceres differs from most companies operating in the hydrogen space, because it doesn’t want to be a manufacturer, it simply wants to license its fuel cell design, the ‘SteelCell’, to large-scale global manufacturing companies who already have a global sales and distribution network.

The information provided should not be considered a recommendation to purchase or sell any particular security. Capital at risk.