Context 

As part of its transformation efforts, our client had developed a series of digital initiatives to deliver added value to its clients. In particular, it had tested digital twin solutions with a few clients, but had not defined the commercial model for these services.

In this context, our client wanted to undertake a reflection around the ways to integrate digital services into its offering and define a pricing model.

Mission

We organized a workshop to:

• Align the participants on the importance of monetizing and capturing the value of the services provided to its clients
• Provide a thorough and prospective view on market trends in digital twin business models to identify potential options
• Illustrated the case with business models of digital solution startups in the industry
• Frame a thinking canvas to help the client identify new business models to test with its clients

Key figures

10+ people

We helped our client to acculturate 20 team members to Digital Twin services.

1st offer

We helped our client to launch its first Digital Twin offer in Q4 2020.

Context 

The rise of digital technologies has not only driven change in cities but has also helped reshape our interactions with our environment and the places where we live and work: it has allowed us to move from a very linear pace of life – where one activity is done in a place dedicated to it – to a more fragmented conception – where a single place must be able to accommodate multiple activities. The recent pandemic, with its impact on our mobility, has certainly been a catalyst for this trend. Homes have been turned into workstations, offices are suddenly depleted, stores adopted click & collect or adapted their delivery supply chains, and so on so forth.

Our client, a major French player in the construction industry, wanted to investigate how the hybridization of buildings could enhance the potential use of buildings.

The mission

We carried out a deep dive study divided into three steps:

• A market study to paint a complete picture of all the megatrends related to building hybridization. We defined this blurry notion, and analyzed what market characteristics are (new business models, technologies, use cases)
• A startup landscape to identify the innovative players driving the hybridization market forward, with their own definition and approach
• A startup scoring to establish recommendations on the most relevant options for collaboration (R&D agreement, commercial partnership, investment, acquisition, etc.)

Key figures

123Fab #32

1 topic, 2 key figures, 3 startups to draw inspiration from

While offshore wind stagnated under Trump, President-elect Joe Biden’s policies could create a clean energy surge. Indeed, Joe Biden’s climate plan proposes building thousands of offshore wind turbines to put the US on a path to carbon-free electricity by 2035. On the other side of the Atlantic, the EU Strategy on Offshore Renewable Energy, published in November 2020, also acknowledges that harnessing the energy potential of European waters is crucial to meeting climate targets, and estimates that at least 60GW of offshore wind capacity will need to be installed by 2030 (compared to 18.5MW installed today).

Offshore wind farms are able to generate more electricity at a steadier rate than onshore wind farms thanks to higher and more consistent wind speeds. If the wind blows stronger offshore, the total cost of energy (installation, material costs, etc.) is higher, and the operations (grid connection, etc.) are more complex than onshore wind turbines. The growing attractiveness of the offshore wind market can be explained by all the technological improvements that have made it possible to increase turbine capacity and reduce costs.

The technology developments in the offshore wind sector span across the entire value chain:

1. Wind measurement: If met masts (steel towers with measuring equipment on top) are the standard for onshore wind turbines, LiDAR (Light Detection And Ranging) solutions are best suited for measuring wind speed on offshore installations. They can remotely measure distances to a target using lasers, are easier to install and maintain, cheaper and more reliable, and safer for workers. According to the Danish company Windar Photonics, they can even increase energy production by 1 to 4%. This manufacturer of LiDAR solutions sells, among others, WindEYE, a two-beam radar (80m) mounted on a wind turbine nacelle, that corrects any misalignment.
2. Turbine: Several types of turbine innovations are underway. First of all, efforts are being made to increase the speed of the blade tips (there is no noise problem as there is with onshore wind) from 70-80 m/s to 90-100 m/s, to generate more power. Further efforts are being made on rotor design, with 2 blades instead of 3, which allows manufacturers to reduce costs and downwind designs are suitable in regions with typhoons. These turbines can be found in the port of Eemshaven, in the north of the Netherlands.
3. Foundation and support structure: New concepts to reduce installation costs and improve safety are being developed. A 3-legged jacket design, instead of 4, facilitates installation while reducing material costs. When it comes to the foundations, screw piles are being replaced by suction bucket technologies. Water is pumped out of upside-down buckets, thereby creating enough differential pressure to hold the foundation to the seabed. This technique was first used in 2018 for the European Offshore Wind Deployment Centre (known as Aberdeen Offshore Wind Farm). Self-installing gravity foundations are also being tested as they limit costs by reducing the use of heavy equipment vessels. The foundations are produced on land, towed to the wind turbines and then immersed with water and sand to rest firmly on the hard seabed.
4. Operations and maintenance: Automated inspection by drones, instead of being performed manually, is expanding. For instance, the startup Skyspecs offers an aerial blade monitoring drone solution that can complete a turbine inspection in less than 15 minutes. On top of increasing safety, the inspection report is more accurate and reduces maintenance times. To reduce time-to-repair and revenue losses associated with component failures, companies are creating predictive maintenance solutions. Australian company Ping has developed an aero-acoustic detector that uses sound to detect damage over blades by analyzing airflow and giving quick alerts once detected.

More specifically, innovations in floating offshore wind are accelerating along with the strong interest in this technology. Indeed, countries with few shallow sites, such as Japan and the US, see this as a significant opportunity. French startup Ideol is a major player in this market. In 2018, they installed their first floating demonstrator in Saint-Nazaire, successfully constructed floating wind turbines off the coast of Japan, and are currently building (2021-2022) a new floating wind farm in the Mediterranean sea.

Although the offshore wind sector has witnessed many innovative technologies, its large-scale implementation is limited by some remaining challenges. Above all, costs remain high (R&D, components, installations, etc.), large investments are needed, so economies of scale are still limited. Secondly, the lack of onshore electrical infrastructure to support offshore wind farms is a technical difficulty that needs to be addressed. HVDC (high-voltage direct current) electric transmission seems to be a good solution for long-distance transmission, as it reduces losses and cable costs. The cost of transmission, on the other hand, remains pretty high. A few demonstrations of this new technology are on-going in the North Sea. Finally, there are several environmental issues associated with the installation of the windfarms. A few examples are the inference of fishing sites and the collisions with birds and disturbance of nesting grounds. Orsted, the Danish group that has led the growth of wind at sea, is now desperately trying to find a way to look after a colony of kittiwake seabirds that is holding up a $10bn project off eastern England.

To conclude, offshore wind energy is an attractive and increasingly mature market. From a sector once driven by considerable government incentives and support, we are moving towards a market-driven industry. Innovations such as LiDAR, floating wind turbines and AI are having a game-changing impact on the sector.

2 Key Figures

88 Offshore wind startups

registered by Crunchbase

Market size expected to reach $59.9bn by 2025

The market size of offshore wind energy is expected to reach $59.9bn by 2025, a CAGR

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: 2-B Energy, Ideol, and ONYX InSight.

2-B Energy

2-B Energy is a startup specialised in developing wind turbine generators and power plants. It sells a turnkey solution, including the fully-integratd towers and foundation design. 2-B Energy focuses on driving costs down to make offshore wind more sustainable.

Ideol

Ideol is a leading startiup in floating foundations for offshore wind. It contributes to all stages of floating wind projects, from conception to installation. Their core product is their Damping Pool® floating technology.

ONYX InSight

ONYX InSight provides a condition-monitoring and predictive maintenance software in the wind industry. It collects, monitors and analyses data in real time, to predict faults and make tailored maintenance recommendations.

123Fab #31

1 topic, 2 key figures, 3 startups to draw inspiration from

“Every 18 months, we see a doubling in the number of consumer products claiming to contain nanomaterials in Europe”, said Steffen Foss Hansen, associate professor at the Technical University of Denmark and co-founder of The Nanodatabase.

Nanomanufacturing is the production of improved and nanoscale materials, structures, devices, and systems. There are two approaches to nanomanufacturing.  The first is the top-down approach, which consists of reducing large pieces of materials all the way down to the nanoscale, and the second is the bottom-up approach, which consists of creating products by building them up from atomic- and molecular-scale components. The term nanofabrication is often used instead of nanomanufacturing, but they are two very different concepts that differ in their economic dimension. While nanofabrication refers to researching and testing the feasibility of developing nano-scale materials and processes, mainly at the laboratory level, nanomanufacturing refers to the industrial-scale manufacture of nanotechnology-based objects, with emphasis on low cost and reliability.

If nanomanufacturing was mainly used for electronics (aiming to put the power of all of today’s present computers in the palm of your hand), applications in other industries are now emerging. In the solar energy sector, for instance, installation costs have been reduced by manufacturing flexible solar cell rolls instead of rigid crystalline panels. Batteries made from nanomaterials can be recharged much faster than conventional batteries. It also contributes to improving air quality thanks to a better performance of catalysts used to transform vapors escaping from cars or industrial plants into harmless gasses. Finally, several applications have been developed for the construction industry to improve the durability and enhanced performance of construction components (e.g., carbon nanotubes for better durability and crack prevention of cement), energy efficiency and safety of the buildings, facilitating the ease of maintenance and to provide increased living comfort.

All these applications of nanomanufacturing rely on a growing number of processes, mentioned above.

The top-down approach:

• Nanoimprint lithography: a process for creating nanoscale features by “stamping” or “printing” them onto a surface. A great example of such a process is Canon Nanotechnologies, the market and technology leader for high-resolution, low cost-of-ownership nanoimprint lithography systems and solutions for the semiconductor industry. Their innovative Jet and Flash Imprint Lithography technology creates the extremely small features required in today’s state-of-the-art semiconductor memory devices.

However, the process requires a lot of energy, uses chemicals (sometimes very toxic), and produces waste. Often, the results are quite unique and not easily replicable. This is why bottom-up processes are increasingly being used:

The bottom-up approach:

• Chemical vapor deposition: a process in which chemicals react to produce very pure, high-performance films. The US-based startup Grolltrex is a manufacturer of single-layer graphene sheets that uses a patented transfer and processing chemical vapor deposition method. This method allows Grolltrex to create high-performance graphene products, in addition to offering them at lower costs.
• Dip pen lithography: a process in which the tip of an atomic force microscope is “dipped” into a chemical fluid and then used to “write” on a surface, like an old-fashioned ink pen onto paper.
• Self-assembly: a process in which a group of components is assembled to form an ordered structure without outside direction. Scientists continue to explore this concept, which has become especially important in the field of nanotechnology. Indeed, as miniaturization reaches the nanoscale, conventional manufacturing technologies are failing because it has not yet been possible to build machinery that assembles nanoscale components into functional devices.

Although the applications of nanomanufacturing are wide and promising (in electronics, healthcare, energy, environmental issues, etc.), major challenges explain the slow transition from lab demonstration to industrial-scale manufacturing. The main obstacles include:

1. Developing production techniques that are economically viable
2. Controlling the precision of the assembly of nanostructures
3. Testing the reliability and establishing methods for defect control. Currently, defect control in the semiconductor industry is non-selective and takes 20-25% of the total manufacturing time. Removal of defects for the nano-scale systems is projected to take up much more time because it requires selective and careful removal of impurities.
4. Maintaining the nano-scale properties and quality of nano-system in high-rate and high-volume production.
5. Assessing the environmental and social impacts, as the emergence of nanotechnology has led to the pollution of trillions of minuscule plastic particles in the oceans, waterways, and even in our bodies. High-tech workers are exposed to unusual solvents and rare earth materials that have raised safety concerns.

To scale, not only does nanomanufacturing require more time and investment to scale, but the health and environmental issues linked to the production of new nano-elements need to be addressed quickly. Nanomanufacturing would, if these issues are solved, play a key role in the innovations of many industries.

2 Key Figures

184 Nanomanufacturing startups

registered by Pitchbook

Market size expected to reach $122bn by 2025

The market size of nanoproducts is expected to reach $122bn by 2025, a CAGR of 14.3% from 2020.

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: NanoMech, Nano-C, and Advano.

NanoMech

NanoMech manufactures lubricants, coatings, and cutting tools with their proprietary nanoscale additives that increase production rates and part quality while reducing setup times and costs.

Nano-C

Nano-C develops nanostructured carbons for use in high-value energy and electronics applications. It develops nanostructured carbons for use in high-value energy and electronics applications.

ADVANO

ADVANO combines nanotechnology with fundamental chemical engineering principles to accelerate the renewable energy revolution. Its silicon nanoparticles increase the energy density lithium-ion batteries 30-40% without sacrificing battery life or increasing the battery cost.

123Fab #30

1 topic, 2 key figures, 3 startups to draw inspiration from

This month, the South African AgriTech startup Aerobotics raised $137M Series B for its precision agriculture platform. Using a combination of satellite imagery, drones and AI-based analytics, the startup helps farmers monitor their crops, reduce their carbon footprint and increase their overall crop yield. This funding round is just one example of the rise of precision agriculture as a promising answer to the global food crisis. Indeed, the AgriFood Tech Investment Review report indicates that investment in digital technologies accounted for 41% of the deal activity in 2019.

Precision agriculture can be defined as an approach to farm management that uses information technology (IT) to ensure that crops and soils receive exactly what they need for optimum health and productivity. The data used in precision agriculture can be collected 2 ways:

• Aerial imagery – drones, planes and satellites help to create bird-eye views of the cultivated area, which can be used to analyze a number of parameters such as the amount of water in the soil or the health and maturity of a crop. Normalized Difference Vegetation Index (NDVI) imagery is a method of measuring crop health based on the greenness of a plant.
• Soil sensors – these are used to measure the most essential parameters and chemical properties of the soil. They can be electromagnetic, electrochemical, mechanical, etc. Electrochemical sensors provide information on nutrient availability and pH in the soil, allowing crop stress and diseases to be detected 3-4 weeks in advance.

Multiple technologies have been developed in recent years for different applications: farm planning, field mapping, soil sampling, tractor guidance, crop scouting, yield mapping, etc. By moving from homogenous to individual processing, these technologies have impacted the entire agricultural value chain – from input supply to the end customer – and improved crop yields while achieving sustainability goals (limited resource use and environmental degradation). Among the technologies that have been developed, 5 main ones can be identified:

• Remote sensing technology – these technologies use remotely sensed data to measure the most essential parameters on a farm.
• Variable rate technology (VRT) systems – they use the data collected to automate the amount of input (seeds, fertilizers, pesticides, water) applicable within defined farming areas. These technologies can be used for seeding crop fields, spraying pesticides, applying fertilizers, spreading manure, etc. Irrigation systems are the most common control systems. They allow the exact amount of water to be distributed. Startup CropX has developed an analytics software that integrates with irrigation systems to help increase crop yields.
• Satellite positioning systems – global positioning systems (GPS) enable to calculate precise locations and positions. These systems are used for navigation but also for geo-referencing information. For instance, farmers use GPS to collect geo-referenced soil samples to check nutrients, pH levels and other data to make profitable decisions.
• Equipment guidance and automated steering systems – they automate farmers’ slow, repetitive and tedious tasks, such as harvesting crops or blowing seeds. Autonomous machines are slowly appearing in the industry, using computer vision to distribute fertilizers accurately – studies show that fertilizer use can be reduced by up to 80%.
• Geo-mapping – it is a technology used to create maps of various soil and crop conditions.

In recent years, large agricultural players have joined forces with startups to shape the future of the agricultural industry. ADAMA, one of the world’s leading crop protection companies, recently announced a partnership with startup Taranis, to develop an end-to-end precision agriculture solution.

Although precision agriculture is a golden opportunity for global food security and crop yields, some challenges still need to be addressed. One of the first obstacles to its adoption is the high investment costs. Another is that most solutions have been designed for large, homogenous farms and are therefore not suitable for small, diversified farms. In addition, as precision agriculture has only recently taken off, there is still is a lack of experience in the use of drones, robots, and other precision agriculture tools, as well as a lack of connectivity between all the different devices and software (but should fame over time). Last but not least, the complexity of managing data privacy and cybersecurity is problematic (most of the cyber threats faced by precision agriculture are consistent with those in other connected industries: data theft, theft of resources, reputation loss, destruction of equipment, or gaining an improper financial advantage over a competitor).

To conclude, precision agriculture is undergoing a rapid transformation. The use of GPS guidance, aerial mapping, robotics, and drones is pushing towards sustainable agricultural practices that can have a positive impact on social, environmental, and economic aspects, but it remains a challenging opportunity. While not all companies will succeed in the transition, those that do will shape tomorrow’s sustainable food supply.

2 Key Figures

210 Precision agriculture startups

registered by Crunchbase

Market size expected to reach $11.1bn by 2025

The market size is expected to reach $11.1bn by 2025, rising at a CAGR of 13.9%.

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: GramworkX, Karnott and Arable.

GramworkX

GramworkX has developed an IOT and AI enabled smart farm resource management tool, which helps the farmers guide, optimize and monitor utilization of water. The technology includes a unique machine learning algorithm, which provides micro-climatic condition predictions for the farmer to take accurate and proactive decisions.

Karnott

Karnott offers a tracking software coupled with a connected device that tracks agricultural equipment. Karnott places an automatic, autonomous, mobile, real-time device in tractors, trailers, or seeders to collect data, and then their software automatically calculates, analyzes, and archives it.

Arable

Arable is an agricultural data and analytics company that offers the world’s first IoT-enabled irrigation management tool, weather station, and crop monitor in one, the Arable Mark. Reliable data-driven decision-making saves customers time and money, reducing risk while preserving natural resources.

123Fab #29

1 topic, 2 key figures, 3 startups to draw inspiration from

Unfortunately, edge-connected devices have added numerous entry points for hackers to target. The vast Mirai botnet attack in 2016 is just one example. By infecting Internet of Things (IoT) devices, the Mirai malware turned 100,000 devices into a network of remote-controlled bots, which had the effect of wiping the east coast of the US off the internet for a day. Another example is the hacking of the internet-connected fish tank in a Las Vegas casino a year later.

Edge Computing is a distributed computing paradigm that brings computation and data storage closer to the data collection point, to improve response times and save bandwidth. Instead of being processed in a data center, data is processed locally in the device itself. While processing often involves normalizing and analyzing the data stream to look for business intelligence, only the results of the analysis are sent back to the principal data center.

In recent years, the Edge Computing market has surged, mainly bolstered by the development of 5G and IoT technologies. While 9% of the world’s data was processed via edge computing in 2020 (compared to 91% via the cloud), it is projected to reach 75% by 2025. As the number of applications grows — autonomous vehicles, industrial manufacturing, smart devices, and homes — edge computing is all the more a significant threat to cybersecurity. Indeed, the computing paradigm is based on connected objects and micro data centers, which are often the weakest links and the most obvious gateways for hackers. Therefore, it has been imperative for integrators and providers to comply with stringent directives and regulations, such as the EU’s General Data Protection Regulation (GDPR), to protect the personal data they hold.

Although the cyberrisks are more limited than those of cloud computing, because hackers have to infiltrate decentralized storage systems to access sensitive information, and because the information is not stored in a single data center, attacks can be more frequent. Indeed, edge computing faces 4 key security concerns:

1. Architecture — While sending data to the cloud from edge devices is secure (companies control the infrastructure used to encrypt and verify the data), receiving data from the cloud is not. The challenge for companies is to ensure that the data is authenticated and can be safely computed into the IT system. Startup Attila Security helps companies in this respect, by protecting all edge devices and simplifying network security in accordance with National Security standards.
2. Fragmentation — All IoT devices have to be authenticated and adhere to privacy policies that give network administrators oversight over their data. As it seemed too challenging to impose a universal privacy policy on the infinite number of IoT devices, Microsoft decided to launch Azure Sphere in 2018 to address the IoT fragmentation. It replaces the general-purpose microcontroller units (MCU) used in most of the connected devices with a secure one, designed so that each subsystem of the chip is securely isolated from the others.
3. Physical security — Devices are vulnerable to theft and infiltration. A simple USB key can be used to upload counterfeit software or firmware that changes the configuration of the device to access the private data. Encrypted tunnels, firewalls, and access control are therefore essential.
4. User Error — Given the multitude of devices within the edge (connected together and within networks), experts have a hard time implementing cybersecurity solutions. A solution to user errors and external edge attacks is to rely on a third-party management program.

Although there are many solutions to prevent attacks, certain segments present higher risk use cases than others.

• Autonomous vehicles — Threats are on three levels: control, communication, and sensing. Recently Tencent Keen Security Lab, a Chinese cybersecurity firm, uncovered a range of flaws in BMW’s autonomous vehicles. A team of white-hatted hackers managed to take control of the audio, visual and navigation units without any physical connection. Although BMW has rolled out modifications, it is is all the more alarming as all parts of an autonomous vehicle are managed by a computer. V2V (vehicle-to-vehicle) communication, which is a major source of data for guidance and control systems, is also susceptible to hacking. This can propagate upwards and compromise the security of the control layer.
• Industry 4.0 — Due to the interconnected nature of industry 4.0-driven operations, cyberattacks have far more extensive effects than ever before.  Although no single attack could bring down the entire network, the increasing number of entry points makes it crucial for industrial executives to be apprised of the potential risks. Studies show that more than 50% of small and medium-sized businesses have experienced a cyberattack in the last five years and that manufacturing is one of the most frequently targeted industries. However, in comparison, edge computing is still more secure than the cloud.
• Home & wearable accessories IoT — While most people are aware of the risks associated with mismanaging passwords of traditional IT devices, most users aren’t accustomed to the risks associated with IoT devices. Two years ago, for instance, a large number of printers were hacked worldwide urging people to subscribe to PewDiePie’s YouTube channel. Connected watches or wireless headphones are also often hacked. Indeed, Bluetooth devices can leave gaps for security breaches.

To conclude, the rapid growth of the edge computing market (often considered more secure, faster and cheaper than cloud computing) goes hand in hand with the multiplication and scattering of cybersecurity challenges. Not because it is new, but due to the volume of data that is processed. There is no magic recipe for the time being, which is why research and investment will undoubtedly increase drastically in the coming years. According to studies, global cybersecurity spending could reach $134 billion in 2022.

2 Key Figures

268 Edge computing startups

registered by Tracxn

Market size expected to reach $43.4bn by 2027

According to Grand View Research, the market size is expected to grow from $2.5bn in 2019 to $43.4bn by 2027, at a CAGR of 37.4%.

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: Edgescan, EDJX and Clearblade.

Edgescan

Edgescan is an irish startup that delivers full stack vulnerability management, i.e. deep security assessment of web applications, supporting app servers, components and associated hosting environments. They cover off supporting systems in both cloud and edge data center environments.

EDJX

The USA-based startup EDJX, provides object storage, serverless, and edge services, resulting in zero infrastructure to manage. The company develops hardened and secure nodes suited for industrial environments with low latency.

ClearBlade

ClearBlade is an edge computing software company enabling enterprises to rapidly engineer and run secure, real-time IoT applications. Clearblade provides sofwares with encryption, authentication, and authorization of API access including tokens and certificates.

123Fab #28

1 topic, 2 key figures, 3 startups to draw inspiration from

In April 2020, the French government finally authorized retrofitting, i.e. the conversion of a vehicle’s engine to reduce its emissions. Although retrofitting wasn’t illegal beforehand, it was necessary to obtain authorization from the car manufacturer for the retrofitted vehicle to be homologated. Today, any certified professional can convert a vehicle, as long as it is a passenger or freight transport vehicle more than 5 years old (cars, trucks, buses, light and heavy commercial vehicles, etc.) or a 2- or 3-wheeled vehicle more than 3 years old. While France is now the 13th European country to have legalized this practice for B2B and B2C players, it is also the first country to have authorized the retrofit of hydrogen engines. In this newsletter, we will focus on B2B retrofitting for cars and light commercial vehicles (LCV).

Two retrofit technologies coexist:

1. Exhaust after-treatment systems (for diesel engines) – this process involves modifying only the diesel emission system of the engine. Hardware may include diesel particulate filters (DPFs), diesel oxidation catalysts (DOCs), selective catalytic reduction (SCR), crankcase emission control devices, or other technologies to reduce emissions.
2. Re-power systems – this involves stripping out the existing engine and replacing it with a brand-new powertrain (e.g. a 100% electric powertrain, a cleaner diesel engine, a petrol engine + LPG system, or a hybrid electric powertrain). Hydrogen retrofitting involves removing the combustion engine and replacing it with a battery backed up by a hydrogen fuel cell. Although the technologies are very recent and many companies are still in the prototyping phase, the main reasons for the enthusiasm for hydrogen retrofit are the following:

• Battery recharging is faster: it takes about 5 minutes in a hydrogen charging station. However, the infrastructure is not yet well developed. In Europe, there are 170K electric charging stations compared to 87 hydrogen stations.
• Hydrogen batteries occupy smaller volumes compared to electric cars (but are heavier)

Since retrofitting presents an interesting opportunity for decarbonization, corporates are increasingly addressing this market. For instance, Air Liquid, Green GT and TC Transports are currently working on a project called ‘Cathyopé’ to retrofit 44-ton diesel trucks for commercial logistics. Corporate-startups are also flourishing. Last summer, Air France announced that it was joining forces with French startup Carwatt to switch to electric ramp equipment. Baggage trolleys, runway trucks, stepladders, aircraft pushers, etc. are being converted to electric engines and equipped with second-life batteries. Another example is the German startup Keyou, founded by former BMW engineers in 2015, which has redesigned the traditional internal combustion engine enabling it to run on hydrogen.

Beyond being an interesting decarbonization option, retrofitting has other advantages for manufacturers and end customers.

1. Retrofitted vehicles are more affordable than new electric and hydrogen cars – for a fraction of the price of a new electric car (the cheapest $22,000), French start-up Transition One retrofits the most popular car models. For $5,600 (or $9,000 without a government subsidy), it builds a more efficient electric engine, batteries and a connected dashboard into the car.
2. Retrofitted cars are eligible for subsidies – in France, for B2B retrofitting, companies can receive a subsidy of €4,000 for a commercial vehicle weighing less than 2.5 tons and €6,000 in other cases.
3. Retrofitting contributes to a dual circular approach – on the one hand, it extends the life of existing thermic vehicles. On the other hand,  old batteries are recycled and have a second life. The flagship example is the Renault Zoé, whose electric engine is reused in LCV or motorboats on the Seine, after 5 or 6 years of use when its capacity is only slightly degraded (70%-80% of its initial capacity).

However, a number of challenges also hinder the massive implementation of retrofitting. First of all, there are economic reasons for its slow adoption. The process is costly, especially if the car’s lifespan is limited by other components. Then, there are technical reasons. Retrofitted cars have a reduced driving range (120 to 200 km maximum) and must pass rigorous safety tests to be roadworthy. For hydrogen retrofitting, access to hydrogen is difficult; the number of charging stations is very limited. Finally, there is some hesitation about the environmental issues surrounding retrofitting – some wonder about the sustainability of EVs and therefore retrofitting. For others, it should be seen as a step in the transition to electric cars that only makes sense in certain circumstances.

To conclude, if retrofitting is a valid option for many companies at the moment, the future of the market will depend on its long-term affordability compared to other options. This is because the cars used are often end-of-life vehicles that can be more expensive to maintain. At the same time, the question of retrofitting electric vehicles is also beginning to be raised by car manufacturers.

2 Key Figures

24 vehicle retrofit startups

registered by Crunchbase

Market size expected to reach 420k vehicles by 2025

According to a study carried out by Aster Fab, the number of retrofitted vehicles in the EU is expected to reach 420,000 vehicles by 2025.

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: Carwatt, Phoenix mobility and E-Néo.

Carwatt

Carwatt converts industrial and transport vehicles from combustion to electric. It works on airport support equipment, industrial vehicles, waterways, safari cars.

Phoenix Mobility

Phoenix Mobility designs retrofit kits to convert fuel-powered vehicles into electric ones. This is a cheaper and greener alternative to buying a new vehicle. It is one of the pioneers in retrofitting in France.

e-Néo

e-Néo works exclusively for B2B clients (garages, transporters, companies, local authorities, etc.) on the transformation of the vehicle’s powertrain (retrofit) from thermal to electric or hydrogen.

123Fab #27

1 topic, 2 key figures, 3 startups to draw inspiration from

In recent years, the solar photovoltaic (PV) market has gained impetus from the rising demand for alternative sources of energy and the decreasing operating costs. Convinced that solar energy is essential to achieve climate neutrality, the ‘Solar Europe Now’ coalition, which brings together 120+ players across Europe, calls for better integration of solar PV into climate and energy policies. Rooftop PV systems, for instance, are an accessible tool for decarbonizing activities (tertiary or industrial) and can be combined with other energy transition projects (storage, biomass, etc.). And you, do you have any plans in the field of solar energy?

As far as solar energy is concerned, two main technologies are used: photovoltaic (PV) and concentrated solar power (CSP). Unlike CSP, which uses the sun’s energy to convert it into high-temperature heat, PV uses sunlight to convert it into electricity. PV has four main applications: residential, utility-scale, commercial & industrial (C&I) and off-grid.

In this newsletter, we will focus exclusively on utility-scale and C&I applications.

Over the years, solar energy has proven to be more beneficial than before. In addition to being a truly renewable energy that can be harnessed in most parts of the world and will be accessible as long as the sun shines, its applications are multiplying. However, it has also been widely criticized:

• It is weather-dependent – solar panels are dependent on sunlight to effectively collect solar energy. As a result, cloudy and rainy days have a noticeable effect on the energy system.
• Solar storage can be expensive – beyond the initial cost of purchasing solar PV systems, which is fairly high, solar energy also requires large storage systems.
• It uses a lot of space – solar PV is a much more land-intensive technology than coal, natural gas or nuclear power. It uses 44 acres per megawatt compared to 12 for the other three sources. However, it is less than wind and hydro, which use 71 and 315 acres respectively.
• The toxic chemicals used – the PV production process requires the use of cadmium and arsenic. While the EU has implemented strict regulations in place for PV recycling, a large number of countries dump their solar panels in landfills, risking toxic chemicals leaking into the soil.

However, a lot of R&D has been carried out to address these issues in recent years. Startups and corporates have developed new technologies that have reduced the cost of PV systems down and maximized their efficiency. Startup solutions are:

• Creating more efficient materials – startups are integrating new materials into solar panels to maximize the solar PV yield. One example is Australian startup Sapphire, which uses nanostructured ‘black silicon’ to prevent light reflection and allow the cells to absorb more light.
• Developing ways to store more energy – Finnish cleantech startup Teraloop developed an alternative model to electrochemical batteries for storing renewable energy: a flywheel. It is designed to store rotational energy efficiently and meet the requirements of industrial players who need a large amount of energy.
• Producing smarter solar trackers – solar panels are often assembled into arrays on a type of mounting system – rooftop-mounted, ground-mounted, wall-mounted or floating. While mounts can be fixed, they can also be dynamic and use solar trackers to make sure panels always face the sun. These tracking systems are increasingly common in utility-scale projects. In the tracker space, US startup Array Technologies has developed DuraTrack Hz, an industry-leading single-axis tracker. Early October, the startup raised over $1 billion in a public offering.
• Manufacturing more reliable inverters – a large amount of the production loss on solar PV systems is often attributable to the poor performance of inverters, responsible for converting and feeding the power into the grid. This can be due to a faulty installation, overheating issues or an isolation fault. US startup Alencon Systems has developed a system based on a patented harmonic neutralization approach, an upgrade from the pulse-with modulation used by PV inverters today.

Beyond efficiency, startups are also addressing sustainability issues. We have recently seen the development of organic photovoltaic (OPV) cells that use thin-film organic semiconductors – typically polymers or small molecules. The EU has also been investing to develop systemic circular business solutions. This is in particular the object of study of the 2 European-funded programs Circusol and Cabriss.

While the PV sector is predominant, the concentrated solar power (CSP) sector is also gaining traction. Heliogen, a startup backed by Bill Gates, raised $39 million in early November to support industrial applications in which PV may not be able to compete: production of cement, steel and petrochemicals, etc.

To conclude, we anticipate solar energy to grow in prominence in the commercial & industrial sectors in the coming years in the EU. Not only thanks to Germany’s sustained deployment but also to emerging growth markets such as France, the Netherlands and Spain as a result of improving policy environments. Essentially, the future of solar energy will be shaped by incumbent lobbying; the speed, quantity and nature of government support and the divestments and investment made.  

2 Key Figures

378 solar PV startups

in the world registered by Crunchbase

Market size expected to reach $113bn by 2025

According to MarketsandMarkets, the global photovoltaic market is expected to grow from $76.6 billion in 2020 to $113.1 billion by 2025, at a CAGR of 8.1%.

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: Sapphire, SolarEdge technologies and Oxford PV.

Sapphire

Sapphire designs and manufactures solar energy systems to make them efficient by using nanostructured “black silicon” to prevent light reflection and allow the cells to absorb more light.

SolarEdge technologies

SolarEdge technologies sells power optimizers, solar inverters and monitoring systems for PV arrays. The products are designed for residential, commercial and utility-scale installations.

Oxford PV

Oxford PV commercializes a new technology for thin-film solar cells using solid-state perovskites, boosting the efficiency of current commercial cells.