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.

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 #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.

123Fab #22

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

Towards CO2 Capture

”The deployment of carbon capture and storage (CCS) technology is not optional if the world hopes to meet the targets set out in the Paris Climate Agreement”, stated recently the International Energy Agency. Carbon Capture and Storage is a technology that can capture up to 90% of the carbon dioxide (CO2) emissions produced from the use of fossil fuels in electricity generation and industrial processes, preventing the CO2 from entering the atmosphere, or removing the CO2 that already reached the atmosphere. The CCS chain consists of three parts: capture, transport and storage of carbon dioxide emissions. In this newsletter, we will focus on the carbon capture segment exclusively.

There are two types of carbon capture methods: CO2 can either be captured at its source (power plants, industrial processes) and then stored in non-atmospheric reservoirs or it can be removed from the atmosphere (e.g. with forests). Most technologies fall into the first segment. In the context of increasing ecological awareness, interest in carbon sequestration has grown as capture could achieve 14% of the global greenhouse gas emissions reductions needed by 2050.

The main sources of CO2 containment that need to be tackled are the following:

• Natural Gas extraction: 10 to 20% of the CO2 contained in natural gas needs to be extracted before any usage – represents 73% of the industrial CO2 captured
• Hydrogen production: a lot of CO2 is produced during the steam reforming production process –  represents 18% of the industrial CO2 captured
• Biogas: up to 50% of CO2 needs to be extracted to have a proper quality after biogas production

Carbon capture technologies separate CO2 from other gases by one of these three methods:

1. Pre-combustion capture: it removes CO2 from fossil fuels before combustion is completed, through processes such as gasification (converts carbon-based materials by reaction at high temperature into synthesis gas) or reforming (converts carbon-based materials by reaction with water to produce synthesis gas, hydrogen or carbon monoxide). The Caledonia Clean Energy Project in the UK (due for the mid-2020s) will use gasification to capture more than 90% of the carbon emitted from a natural gas power plant.
2. Post-combustion capture: it removes diluted CO2 (~5-15% CO2 concentration) from the flue gases once the fuel has been fully burned within the air. R&D efforts in post-combustion capture are focused on sorbents, membrane systems, and also novel concepts (e.g. hybrid systems that efficiently combine attributes from multiple key technologies). The Petra Nova project in Texas is the largest post-combustion capture solution and removes 92% of the CO2 from the plant.
3. Oxy-fuel combustion systems: fossil fuels are combusted in a nearly pure oxygen environment, as opposed to air. The main purpose of using oxy-fuel combustion is to generate flue gas with very high concentrations of CO2 and water vapor, making it possible to separate or capture the CO2 from the flue gas purely by low-temperature dehydration and desulfurization processes. Air Liquide is taking part in several large-scale research projects in Europe and in North America, testing oxy-fuel combustion processes, such as the Lacq Project in the south of France where Air Liquide will supply TOTAL with oxygen at a rate of 240 tonnes per day.

Carbon capture is technically feasible and has existed for 40 years. Nearly two dozen commercial-scale carbon capture projects are operating around the world and 22 more are underway. For instance, since 2017, the ADM Illinois Industrial Carbon Capture & Storage Project has been capturing CO2 from an ethanol production facility and sequestering it in a nearby deep saline formation. The project can capture up to 1.1 million tons of CO2 per year.

Although carbon capture is feasible, there are economic reasons that explain its limited adoption. Most CCS applications are currently not economically viable and there is a lack of government policies to support the technology. Two changes would be required for CCS to become economically viable in those categories. First, the cost of carbon capture must come down, either through the development of new technologies or through scale and experience effects. Second, the value of captured CO2 emissions must increase, through new uses and sources of demand. The carbon tax could accelerate its adoption if it is high enough to be binding (as in Norway) or if there is a post-capture carbon market (as in the US where petrol companies buy carbon to increase their productivity, although this example is not a very eco-friendly approach). In France, on the contrary, the carbon tax is too low compared to the high investments that require carbon capture.

Yet, more and more startups are positioning themselves in this segment and are raising funds. In June 2020, Climeworks, a Swiss climate startup, raised 73 million Swiss francs ($76 million) in a private funding round. It builds machines that capture CO2 from the air and store it in a solid-state underground. It also takes the CO2 and delivers it to industrial clients, such as The Coca-Cola Company, to put bubbles in drinks.

Finally, with regard to its environmental impact, attention should be drawn to the need to use additional fossil fuels for carbon capture solutions. The use of CCS with renewable biomass is one of the few carbon abatement technologies that can be used in a ‘carbon-negative’ mode.

All in all, the carbon capture market has existed for half a decade, but the timing seems right. Plans for more than 30 new integrated CCUS facilities have been announced since 2017 and many startups are addressing this market as well. Furthermore, the trend in CCS investment is on the rise. On September 1st, 2020, the U.S. Department of Energy announced the award of approximately $72 million in federal funding to support the development and advancement of carbon capture technologies.

2 Key Figures

56 Carbon Capture startups

in the world registered by Crunchbase

Market size expected to reach $6.1bn by 2027

The global carbon Capture market size was valued at $1.8bn in 2019 and is expected to reach $6.1bn by 2024.

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: SeeO2, Climeworks and C-Capture.

SeeO2

See O2 Energy is a Canadian startup working to efficiently convert carbon dioxide and water into marketable and clean value-added products using reversible fuel cell technology. This solution makes it possible to effectively capture and use carbon to produce fuels, power, heat, and oxygen.

Climeworks

Climeworks is a spin-off company that develops a carbon dioxide reclaiming system. Its product extracts carbon dioxide from ambient air. It builds three models based on the amount of CO2 extracted. Its chief target markets are F&B companies that use CO2 for aeration in food processing and greenhouse owners. It also intends to enable the creation of carbon-neutral synthetic fuels using extracted CO2.

C-Capture

C-Capture, a spin-off from the University of Leeds, developed a bottom-up approach to design solvent systems for the removal of CO2 from gas streams. The patented technology captures CO2 from methane gas streams as it passes through and upgrades biogas. Reversibly captures carbon dioxide from power stations, steel and cement production, and fermentation units.

123Fab #21

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

Low-carbon materials: a necessary transition in the construction industry

“The state of the building stock in Europe will make or break the European Green Deal”, said Adrian Joyce, Secretary General of the European Alliance of Companies for Energy Efficiency in Buildings. Indeed, buildings account for 19% of global greenhouse gases (GHG) emissions.

Construction materials account for 40% of the CO2 from buildings. This is due to 2 main factors: the overexploitation of raw material resources and/or the exploitation of polluting resources and the extensive use of energy-intensive components during their production phase. Cement is one of the main construction materials along with steel and accounts for 8% of the global CO2 emissions, which leads to the exploration for sustainable building materials. Low-carbon materials such as carbon concrete or wood fiber are a promising alternative. They are made using a waste-free production process and an energy and carbon-efficient production, assembly and transportation process.

Different technologies are being tested and developed:

• Short- and medium-term solutions: recycling and carbon compensation. An example of recycled industrial waste is high-density blocks which are made up of a mixture of lime fly ash and stone crusher dust. However, the cost and effort to recycle these materials remains high. Carbon capture solutions are also another way to decarbonize materials. Although this technology is premature today and not yet economically proven, it can capture carbon dioxide waste and prevent it from escaping into the atmosphere.
• Long-term solutions: substitution by new low-carbon materials. Low-carbon concrete appears to be a good way forward, as concrete will remain the most widely used building material in the coming years. Decarbonization of concrete means decarbonization of cement. Cement containing a high volume of one or more complementary cementing materials (CCM) (such as coal fly ash, granulated slag, silica fume and reactive rice-husk ash) is a promising alternative to clinker for reducing CO2 emissions. Extensive R&D is underway to use CCM in cement in Portland, and studies highlight that it could reduce greenhouse gas emissions in the global cement production by up to 80%. Many startups (e.g. CarbonCure, Carbon Clean Solutions, LanzaTech) are positioning themselves on this segment.
• Another alternative is bio-based materials. They are made up from substances derived from living organisms and can be used in many applications in the construction sector such as for insulation (vegetable fiber wools, straw bales, etc.). Some technologies create a material directly by mixing and compacting different bio-material parts (wood fiber, beams, posts, etc.), while others add customer polymer to the wood and plant fiber to make the material more resistant. However, there is still some reluctance towards bio-based materials, as they have not been shown to be comparable to their traditional counterparts (performance, ease of use, cost, etc.).

Although low-carbon alternatives are growing, there are significant barriers to their adoption, which explains why concrete and other high polluting materials are still widely used:

• The reluctance of major players to change: the key manufacturers who dominate the materials industry are slow to experiment or change business models. Architects, engineers, contractors, and clients are also cautious about the use of new building materials.
• Technical considerations related to the low-carbon transition: technologies such as carbon capture, use and storage, or the production of hydrogen-based metallurgical processes, have been demonstrated but are not yet commercially available.
• Cost of investing in new, low-carbon technologies and processes: the investment required for heavy industries, such as steel and cement, could be up to 60% higher than current levels.

Low-carbon materials still have a long way to go before they become a mature market, but there is reason for optimism. The transition to a low-carbon materials industry will be supported next year by the launch of a platform on the London Metal Exchange for the trading of low-carbon aluminium, mostly produced with renewable energy. This is the first time a metal will be traded based on its environmental footprint in the exchange’s 143-year history.

2 Key Figures

112 low-carbon materials startups

in the world

Market size expected to reach $377bn by 2022

According to Allied Market Research, the global low-carbon building materials market size was valued at $171bn in 2015 and is expected to reach $377bn by 2022.

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: Carbon Clean, Woodoo and Kenoteq.

Carbon Clean

Based in London, Carbon Clean Solutions (CCS) provide carbon dioxide (CO2) separation technologies used for industrial and gas treating applications.

Woodoo

Based in Paris, Woodoo’s technology offers a second life to low-grade wood by transforming it through green processes into a waterproof, fire-resistant and highly performative material.

Kenoteq

Based in the UK, Kenoteq offers an unfired building eco-brick, K-Briq, made from 90% recycled construction materials and demolition waste.

123Fab #19

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

Green Hydrogen – Water Electrolysis for a greener future

Hydrogen (H2), alongside renewables and natural gas, could play a key role in the energy transition by fostering the decarbonization of industries, with the versatility to provide mobility, power systems, heat and industrial services. Substituting polluting fossil fuels with hydrogen — which emits water only when burned – could significantly reduce greenhouse gas emissions and stave off climate change.

Although hydrogen is a very low-carbon energy, it does not exist naturally on earth and is mainly produced from a range of more or less environmentally friendly chemical sources and processes. There are commonly three types of hydrogen: grey, blue and green.

• Grey hydrogen is produced by chemical reactions – steam methane reforming and coal gasification – and by the use of carbon-intensive fossil fuels (natural gas, oil and coal).
• Blue hydrogen is produced the same way as grey hydrogen, but the main difference is that it has a lower carbon footprint. This is because hydrogen uses carbon capture technologies that prevent the release of CO2 and allow the captured carbon to be stored and reused in industrial processes. Blue hydrogen is more expensive than grey hydrogen.
• Green hydrogen is produced by the electrolysis of water, which uses an electric current to break apart water molecules (H2O) into hydrogen (H2) and oxygen (O2). If the electrolysis is realized using renewable electricity (solar PV or offshore wind turbines), the resulting hydrogen is the cleanest variety, producing zero carbon emissions.

The global hydrogen production is dominated by grey hydrogen: according to the International Energy Agency (IEA), 96% of the hydrogen manufactured in the world is “grey”, while less than 0.1% is produced by water electrolysis. This is mainly due to the lower price of grey hydrogen production compared to blue and green hydrogen. The IEA estimates the price of grey hydrogen at around €1.50 per kilo – the main cause being the price of fossil fuels – and between €3.50 and €5 per kilo for green hydrogen. The three most critical factors for the high cost of green hydrogen are 1) the limited and costly capacity of electrolysis at the moment, 2) the high price of green electricity used in the electrolysis process and 3) the costs for safe and clean transportation.

The widespread adoption of green hydrogen remains extremely slow, but the future of clean H2 could be bright. Major players are taking action to stimulate R&D around green hydrogen production, transportation and industrial applications. The European Commission, for instance, strongly believes in the prospective use of green hydrogen to decarbonize heavy industries and transportation, as demonstrated by the adoption of the European Green Deal in January 2020 to support innovation in clean hydrogen and low-carbon resources. The Covid-19 crisis has introduced a new impetus: France and Germany plan to collaborate and invest €7bn and €9bn respectively in green hydrogen R&D projects. Large corporate companies, including Shell, Airbus and Chevron, are also seizing the opportunity to invest in clean hydrogen technologies and applications.

The market is still extremely young, and there is still room for progress. Startups are positioning themselves either in the improvement of hydrogen storage, transportation and distribution, or in the development of new applications (fuel cells for vehicles, industrial use cases), or in the development of new alternatives for H2 production and electrolysis methods (such as alkaline, Polymer electrolyte membrane (PEM) or solid oxide electrolysis).

2 Key Figures

645 hydrogen fuel startups

in the world, according to Startup Insights

Market size expected to reach $2.28bn by 2027

According to PRNewswire, the global green hydrogen market size was valued at $787 million in 2019 and is expected to reach $2.28bn by 2027.

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: Enapter, Hyon and PowerUP Energy Technologies.

Enapter

Based in Germany, Enapter makes highly efficient green hydrogen generators with scalable electrolysers (Anion Exchange Membrane) to replace fossil fuels.

Hyon

Hyon is a Sweden-based startup that develops and delivers turn-key solutions for the complete hydrogen value chain, from production to utilization, for the maritime sector.

PowerUp Technologies

PowerUP is a US startup that provides clean and portable energy by delivering a hydrogen fuel cell backup generator solution, which can be used for various use cases in transportation.

123Fab #17

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

The slow adoption of robotics in Construction

Back in 1987, Japanese academics, robot manufacturers and contractors were already working on the first documented research about automated construction processes. Since then, construction robotics never stopped improving. ‘Robotics’ refers to the use of machines that have an automated component: construction robots are designed to help and assist humans in their day-to-day work on construction sites. The most common construction robots are stand-alone, fixed machines used for repetitive and precise applications (e.g. articulated arms). Then, there are collaborative robots (or cobots) that directly interact with human workers and perform a specific task – such as lifting heavy loads. A third type of robots are exoskeletons which are connected to the human body to support them in difficult tasks (e.g. for heavy-duty). Finally, the autonomous guided vehicles and autonomous mobile robots can navigate either onboard (e.g. camera or laser based) or in external environments (e.g. drones).

A good example of cobot is SAM (Semi-Automated Mason), the bricklaying robot designed by Construction Robotics. SAM works alongside the mason and assists him/her with the repetitive and arduous lifting and placing of bricks. The mason remains in charge of the setup and responsible for final quality. SAMs can lay 250 to 300 bricks per hour, improving by up to 4 times the number of bricks than a man could lay when working alone. With a retail price of $500,000, the firm that SAMs users can expect an ROI within three years, thanks to a reduction of labor costs by at least 30%, low maintenance costs and an expected lifespan of about 10 years.

Construction Robotics are not the only ones coming with an attractive value proposition for construction firms. Robotics companies and start-ups put forward financial benefits, productivity gain and safety as the main commercial arguments. Indeed, labor costs usually represent between 20% and 50% of a construction project total cost – and 38% of it could be automated according to a McKinsey study, leading to a potential cost saving of 20%.  Although the initial investment is high, robotics firms claim that in the long-term, it is more cost-effective to purchase robots: in the United States, the average robot cost (including maintenance) is 4 times lower than labor wage stated McKinsey. Moreover, robotics is a guarantee of accuracy. Its work is extremely precise and predictable, thus meeting deadlines and avoiding delay expenses is easier. Another advantage of robotics is the minimization of injuries and providing a safer workplace. For instance, autonomous vehicles can operate independently in hazardous areas.

However, robotics in construction is still not widely adopted and there is under-automated when compared to other manufacturing industries. The construction industry has been classified by McKinsey as « in middle range for automation ». There are several reasons for slow adoption rate of robotics in this industry:

• The complexity of construction sites – unique end-product, unpredictable weather –   leads to non-repetitive tasks and involving judgement
• The unpredictable and ever-changing environment: the flexibility required for construction works is for still difficult to automate. As previously said, only 38% of the time spent on unpredictable physical work in construction could be automated with current technologies compared to a 70% for predictable physical work (e.g. in automotive).
• The need for technology to improve: although there are plenty of promising innovations, improvements of the current technology are needed in the adaptability to real-time variability. Moreover, on construction sites there are hundreds of tasks and multiple phases. As there is no multitask-programmed robot, many construction firms remain reluctant to integrate robots to their regular activities.
• The significant investment costs: Investing in robotics involves high initial capital investment, including R&D. Although in the long term it is said to be beneficial, it remains an obstacle for many companies.
• Legal and safety issues: even though robots should reduce the risks on construction sites, the appropriate allocation of risk is a concern for all the construction participants. There is a need specific regulation in the use of robotics on sites. This issue is starting to be addressed (e.g. the compulsory use of Building Information Models in UK since 2019). The cyber risk also needs to be considered.
• Jobs implications: If 40% of current construction jobs would be “at high risk” of automation by the 2030s, according to a 2018 PwC study, the transition will take some time and the major challenge for workers will be to not be replaced by robots but to learn to work side by side with them. A specificity of the construction industry is the importance of craftsmanship, that adds value to projects. Replacing all human workers by robots would mean taking away the quality-assessment aspect that current robots cannot provide. Thus, collaborative robots may be the most appropriate solution as they are designed to work alongside human counterparts instead of entirely replacing them. Cobots will contribute to improve productivity by carrying out tasks that would otherwise be considered busywork or for employees.

The current labor-shortage in construction – A 2019 survey by Associated General Contractors of America and AutoDesk reported that 80% of firms find it difficult to hire labor force – will surely weight into the scale of construction robotics rise. Thanks to 5G and other technology improvements, better connectivity will make it easier for multiple robots to co-operate and better understand the environment they are operating in. Compared to other heavy industries, job automation in construction is rather low but it is poised to increase faster than them in the coming decades. According to a PwC study, in the late 2020s, job automation potential in construction is 16% versus 19% on average for all industry sectors but the automation potential for construction in the mid-2030s is forecast to be 39% versus 30% for all sectors.

2 Key Figures

77 construction robotics startups

in the world, according to a Tracxn query.

Market size expected to reach $460M by 2026

According to Verified Market Research, the global Construction Robotics market size was valued at $212 Million in 2019 and is expected to reach $460 Million by 2026.

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: Construction Robotics, Kewazo and SuitX.

Construction Robotics

New-York based company, Construction Robotics is dedicated to developing affordable, leading-edge robotics and automation equipment for the construction industry.

Kewazo

Based in Munich, Kewazo develops smart robotic elevators for industrial and construction sites  with focus on scaffolding. Kewazo solutions intend to improve construction logistics via data analysis and robotics.

SuitX

The US-based startup SuitX builds a robotic exoskeleton for medical and industrial markets, designed to reduce the amount of strain on the knees and quadriceps.

123Fab #13

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

Is Hydrogen the fuel of the future?

Electromobility is a crucial topic these days, resulting from the need to tackle climate change and Battery Electric Vehicles (BEV) are receiving a lot of attention, boosted by the rise of Tesla and Elon Musk’s popularity. But the adoption of BEV is limited by battery technologies: uncertainty about battery life and charging times, the imbalance of electric grids and the shortage of raw materials — such as lithium which is a scarce material – are challenging the rise of BEV.

Another type of Electric Vehicle is catching up, using compressed hydrogen gas to generate electricity and power electric motors, called Fuel Cell Electric Vehicles (FCEV). The key difference with Battery Electric Vehicles is that FCEV are not powered by a battery that needs to be charged from an external power source. Indeed, hydrogen vehicles can produce their own electric power by filling up the fuel cell with hydrogen. Then occurs a chemical process of reverse electrolysis: the reaction of hydrogen with oxygen produces electrical energy, water and heat – which also means that FCEV do not generate any greenhouse gas emissions. Once converted into electricity, the energy can either be used to power the vehicle or be stored and used when needed.

Hydrogen fuel cell technology brings a new perspective in the development of electromobility. While Battery Electric Vehicles take several hours to charge, hydrogen vehicles take only a few minutes, which makes them highly operational and avoids breaking users’ driving habits. However, this technology also brings a new set of challenges:

• Hydrogen is flammable and an uncontrolled hydrogen reaction with air oxygen can cause an explosion
• Hydrogen (H2) is a particularly small molecule that makes metals brittle and is therefore likely to leak from polymer tanks, which means that new composite materials have to be created to make tanks safe
• Hydrogen is a low energy fuel, meaning that a large quantity is needed to power the vehicle. For this reason, the gas has to be compressed and stored in heavy and cumbersome high-pressure tanks

Some large companies and startups are developing new materials and fuel cell technologies to make FCEV safer, but there are also some players positioning themselves on the hydrogen technologies and services market.

Even though the technologies are yet to be improved, hydrogen appears to be a groundbreaking alternative power source for vehicles, with many noticeable benefits such as reduced noise and air pollution during charging. However, the development and adoption of hydrogen vehicles remain very slow due to the lack of existing refueling infrastructure: at the end of 2019, there were only 432 hydrogen refueling stations worldwide, of which 330 were open for public vehicle filing according to Fuel Cell Works. Consequently, the FCEV demand and production remains very low and the production is not yet to be industrialized, which is why the market prices of FCEV are still very high (around $80,000 according to BMW).

Given the positive impact on the environment and the charging-time benefits compared to BEV, the hydrogen vehicle market could grow significantly in the next decades, especially for large transport systems (trucks, buses, trains and air transportation). Major companies in the automotive and transportation space, as well as hydrogen producers, have invested heavily and joined forces to develop hydrogen-related technologies and democratize hydrogen as the next generation of fuel.

2 Key Figures

70 fuel cell startups

are focusing on developing solutions for the Industry and Mobility sectors.

Market size expected to reach $42bn by 2026

According to Allied Market Research, the global hydrogen fuel cell vehicle market was valued at $652 million in 2018 and is expected to reach $42 billion by 2026.

3 startups to draw inspiration from

This week, we identified three startups that we can draw inspiration from: HyPoint, Ergosup and HySiLabs.

HyPoint

HyPoint is a US-based startup developing the next generation of zero-emission and fuel-efficient hydrogen fuel cells for the aerospace industry and urban air transportation market.

Ergosup

Based in France, Ergosup is developing an innovative process for the on-site production of high pressure hydrogen for the refueling of hydrogen-powered vehicles.

HySiLabs

HySiLabs is a French startup delivering a unique solution to facilitate hydrogen transportation, storage and delivery for the industry and mobility sectors.