The Climate Revolution Runs on Software
$275 Trillion Shift of Resources
It’s no secret at this point that we are on a collision course with a climate apocalypse if we fail to act. We need to shift to clean energy and electrify everything to run on that clean energy, fast! Estimates of the economic cost of inaction are measured in the hundreds of trillions of dollars. Yet only 6% of our economy runs on electricity today, and most of that electricity is generated from fossil fuels.
We as a society have a heavy lift in front of us. Electrify or die. But how? The good news is that clean electricity now costs less than dirty electricity and it’s fast approaching half of the cost. Amazing.
We now have the solar, wind and storage building blocks we need to completely replace our global energy system by 2050. That’s a 275 trillion dollar shift of resources, according to McKinsey & Co. Entrepreneurs — this is a once in a lifetime opportunity to build what we call the Better Economy, which runs on renewable resources, promotes sustainable production and consumption, offers equitable opportunity and makes good health accessible.
Enter Software
We need to electrify everything, but we can’t simply deploy trillions of dollars worth of energy generation assets without help from software. Our power grids will buckle and we don’t yet have the wherewithal to manage so many distributed energy resources coming on line at once.
Just as the Internet revolution began with infrastructure — optical fiber, routers, hubs, and repeaters before we could have Netflix — so too the clean energy transition began with infrastructure technologies like wind, solar and storage. In order to roll it out at scale, we will need intelligence and coordination.
The next frontier in our climate journey is to build the software that makes our clean energy future work, just as we built the many Web applications by which we now live our lives.
The Coordination Layer for Clean Energy
Software is perfect for coordinating complex problems like the clean energy transition. It runs data centers, it runs airlines, and it runs Amazon. We need it to run our electric future. So what specifically is the role of software in electrifying everything?
Visibility: as the adage goes, you can’t manage what you can’t measure. How will Walmart, for instance, understand its sprawling inventory of HVAC systems so they can replace oil furnaces with clean energy powered electric heat pumps? They would need to know what they’ve got, how old it is, how efficient it is, what refrigerant it takes and more. A great example is our portfolio company Specifx. Its software provides the visibility layer for building heating and cooling.
Heat pumps won’t help Walmart green its buildings if it doesn’t know what it has and and how to transition it, but software will.
Management: once we know what we have and how it works, we can now manage it. How will Nike green the production of its shoes and apparel when it doesn’t own its manufacturing or supply chain? Their suppliers buy from other suppliers who buy from other suppliers. Our portfolio company Ren manages this. Its software provides the management layer for the manufacturing industry to decarbonize its complex and vast supply chains by first understanding where energy comes from but then managing it toward clean sources.
Solar and wind power won’t help Nike decarbonize its production if it can’t manage the carbon footprint of its many supply chain layers, but software will.
Intelligence: finally, once we have visibility into what we have, and the ability to manage and replace it, we need intelligence to optimize our systems. How will FedEx transition its 87k vehicles to electric? It’s like running an airline! How do they assure every electric truck will be able to complete its route each day without running out of power? How will they manage the state of charge of each vehicle to extend battery life? That’s what our portfolio company Synop does. Its software provides the intelligence layer for the electric mobility industry to orchestrate the massive complexity of rolling EV fleets everyday.
Electric trucks and charging stations won’t help FedEx electrify its fleet if they can’t complete their routes, but software will.
As you can see, the complexities in coordinating our clean energy future are vast and software is central to pulling it off.
Let’s Get Coding
What an exciting time to be an entrepreneur. This opportunity is sitting right there on a platter. The hardware building blocks are in place. The world is ready. Now let’s get out there together and build the software we needed to deliver the visibility, management and intelligence required to make it all work. If you’re working on software to deliver our clean energy revolution, please reach out. We have a check waiting for you.
