The shock of Covid-19 has accelerated our society’s urgent need for socially focused systems, from healthcare to economic support for those who are vulnerable.
As we move towards economic recovery, there has been a renewed focus on the role sustainable energy could play in a post-pandemic landscape.
Tesla chair of the board Robyn Denholm and CEO of New Energy Nexus Danny Kennedy are 2 international experts who believe Sydney’s startup ecosystem is well placed to take on the challenge.
They’re part of the City’s upcoming visiting entrepreneur program. This is the first time the free program will be streamed online and this year’s events focus on entrepreneurship in clean tech.
We caught up with them to learn how Sydney startups can leverage Australia’s economic and technological clean-tech potential.
Why the time for clean technology is now
Australia’s economic recovery from the global pandemic won’t be quick.
“The politics of the next decade is going to be more about jobs and not about returns to investors,” Danny said.
“With traditional energy producing industries, the federal government spends a lot of money off the bat. Clean energy, however, tends to be a more distributed technology with lots of labour involved.”
Robyn pointed out that “in rebuilding the economy post-bushfires and Covid-19, business leaders, consumers and political leaders can change the fabric of our economy as we go forward.
“We should be using this pause to change the trajectory towards more sustainable energy solutions and electric vehicles.”
Forget the clean energy vs economy logic
Robyn said Australian demand for sustainable energy already exists.
“The residential solar penetration in Australia is the highest in the world. This was done not with policy, but with consumers speaking with their wallets. We have a potential to lead in sustainable energy globally.
‘We have smart people, a great education system and are blessed with having great sunshine and good wind.”
Funders don’t need convincing either.
“Capital is attracted to clean energy and has been for more than half a decade, because it’s just a better bet,” Danny said.
“We're in a low interest rate environment that will probably stay like this for a number of years. But money wants returns, and there's a lot of money sitting on the sidelines.
“Commodity prices fluctuate wildly and have a lot of uncertainty around their return profile. [As an investor], I would prefer to bet on a fairly stable, safe, known thing, like a power purchase agreement for a solar farm, which has a fixed rate of return.”
Location and talent put Sydney in the lead
On the surface, Tesla and California-based New Energy Nexus are far removed from independent entrepreneurs starting out in Sydney. But Robyn and Danny see many opportunities for Sydney that don’t depend on Silicon Valley.
For Danny, the opportunity is our proximity to southeast Asia.
“Proximity breeds familiarity and good trading behaviour. And we know how to sell to that market.
“Australia has far greater export opportunities in our regional neighbours populated by millions of people, than places like the US. And Sydney happens to be a finance capital for Asia.
“For example, WA runs what are almost like small islands in the desert: grids that are built around batteries and solar. And that's what archipelagos in Indonesia need.”
Robyn’s perspective is less focused on geography than on Sydney’s human capital.
“Sydney’s universities are world class. We have a great multicultural population and pre-pandemic, had the smartest minds focused on different technology challenges coming from around the world.
“We also have really good financial markets. Technology goes hand in hand with talent and we have talent.”
Clean energy innovation is a long game
“Whether you're doing electricity or mobility businesses, which is the end use of energy markets, you're taking on the most powerful vested interest in history,” Danny said. He advises those interested in making a quick buck to focus on something else.
Robyn and Danny agree that in this type of business, focus is key. Tesla’s mission is to accelerate the world’s transition to sustainable energy. It does this across 2 main areas: renewable energy production and storage, and electric vehicles.
The company reinvented our perception of an electric vehicle from a glorified golf cart into something sexy and fun to drive. They’re doing the same for clean energy. So, any image of sustainable energy sources as difficult to produce or not having the right economics will be a thing of the past.
A clear mission should also drive Sydney startups.
Robyn said, “Focus is really important. Being clear on why the products or services you're delivering to customers matter.”
Danny offers a specific example: “It might be something weird like a roof mounting product for Indonesian roof pipes. If you had a small piece of that, if you were licensing the design, you could be doing very well.”
“It sounds obscure, but the people selling jeans during the gold rush to the miners here in California were the ones that made money. Think about the pieces around the parts of the boom that is clean energy.”
Advice from those with skin in the game
Danny said that Australia is now quite sophisticated at running a highly penetrated grid.
“Just think – we contributed to what is now a 100 gigawatt, multi hundred-billion-dollar market around the globe. Use this knowledge to your advantage. And listen, empathetically, to the needs of our neighbours to establish meaningful partnerships,” he said.
Robyn advised to get the best possible people around you and interact as much as you can with the startup community.
Danny and Robyn will share more of their expertise with Sydney’s local tech startups as part of the visiting entrepreneur program.
Hear more from our entrepreneurs
In conversation with Robyn Denholm, board chair, Tesla Wednesday 10 June 12.30 to 1.30pm Sydney time Book now
Asia’s clean tech transition: Opportunity for Australia Danny Kennedy, CEO New Nexus Energy Thursday 11 June 9am to 10am Sydney time Book now
Going green: The new economy Danny Kennedy, CEO, New Nexus Energy Wednesday 17 June 9am to 10am Sydney time Book now
The future of food: How entrepreneurs are innovating to feed the world Shama Sukul Lee, founder and CEO, Sunfed Thursday 18 June 6pm to 7.30pm Sydney time Book now
The hardware code: Deciphering for success Shama Sukul Lee, founder and CEO, Sunfed Wednesday 24 June 12.30pm to 1.30pm Book now