Issue link: https://fhpublishing.uberflip.com/i/1206576
BUSINESS STRATEGY Elaine Knutt speaks to Erik Nygard at UK based energy technology company, LimeJump, about their acquisition, business model, and what they see for the future of the energy networks NETWORK / 28 / FEBRUARY 2020 design, which allows for better service o erings to be sold to customers. "The big movement is the demand for renewable electric- ity. I think this will become an increasing requirement from all customer segments. Ofgem are doing it already by setting the policy targets for ••••. Should Ofgem be scripted to support that (zero carbon)? I think maybe they should. I think you need to develop market designs that are market-based, and should be dynamic enough to allow any technology to take part." Q Do you need to get to net zero via the transitional fuels? A "The good thing is the renewables that have come on have zero marginal cost. When you think about it, every time they produce a unit of electricity, there is no fuel attached to it, you don't need to buy fuel, so the prices are coming down in part because of this increasing availability of renewables, but the volatility of prices is increasing because it's always changing." Q Is the scale-up in the supply side fast enough to meet your aspirations? A "I don't think there are worries about the scale, but maybe there are hindrances in planning. We are on a path, and I don't think that any business or household will accept anything but renewables. You are not going to stop this momentum now. "If I were to forecast if we will be able to hit our renewables tar- gets, I think we will hit them and beat them. At the moment, it looks like we need to prove that subsidy-free can work at scale, so we are in a slight moment of uncertainty, but it's happening." Q Are institutional investors coming into the sector? A "They're not there, they were there on renewables Q What's happened since the Shell acquisition? A "The whole reason for the acquisition is to accelerate towards our vision, which is to make sure we deliver a fully renewable energy future. One large beneˆ t of the Shell acquisition is that we're able to o er more tailored products to our customers." Q What's happening to margins in the current environment? A "Margins across the board are quite heavily under pressure, you see this in retail electricity which's been hit the hardest. When you start going into di erent market sectors, like commercial and industrial PPAs, the margins are under pressure across the board. A business model for a sustainable future What that means is you have a greater need for technology to provide solutions, to stay competitive and ˆ nd innovative ways to deliver to customers." Q Innovation is obviously vital in the industry – what kinds of innovation? A "I'd say it's a mix of everything - innovation in IT, battery technology, generation tech, soŒ ware etc. "SoŒ ware needs to allow you to adapt, because you need to think holistically from a soŒ - ware architecture perspective of what a customer will need today and what they might need in the future." Q What do you need to make it easier, in the regulatory environment? A "I don't think policy and regulation constrains much at all. The policy and regulations, throwing Ofgem into this, they are facilitations that allow us to give customers better service o erings. I think that what policy and regulation can do is open doors that allow for better market Erik Nygard, chief executive, LimeJump