Sketching the startup
ecosystem of the Dutch energy sector
An explorative study providing insights on which startups are present, what
characterizes types of startups, and which challenges are common among them.
By Johnny Meit & Ruud Bouwhuis
Interest for startups in the energy sector is growing. Innovations from startups are considered to be more
radical and provide new solutions. Moreover, energy corporates are starting to invest in startups, whereas
Eneco for example recently announced to invest €100m in energy-startups. The current surge of interest
of accelerator programs such as YES!Delft and Rockstart Smart Energy resonates with this view. Others
state however that the energy sector is a very difficult sector for firms to gain importance. Sjef Peeraer
states: “What I’m noticing, is that competition in this market is rising. Because the entry barriers are not
very high, and, in some peculiar way, being active in the energy sector is considered sexy by half of the
Netherlands” (Budget Energie). Other reasons why some experts are reluctant to promote energy-startups
include the capital-intensity, commodity-characteristics of energy, and governmental inertia.
By picking 102 startups from award competitions, accelerator programs and articles in the media in 2015,
Ruud Bouwhuis (Magnus Red) and Johnny Meit (Utrecht University) developed a
A scientific approach
By picking 102 startups from award competitions, accelerator programs and articles in the media in 2015,
we developed a scientific approach to assess promising startups in the Dutch energy sector. How
innovative are these startups? How do energy subsectors affect the dynamics of startups? Is it possible to
appoint the most promising types of start-ups? By applying insights from scientific literature and
conducting interviews with 12 startups and 5 related experts, a typology with the startup-landscape was
created. The startups that were case-studied include Almeerse Wind, Bleeve, Bluerise, Budget Energie,
Delft IMP, DoBots (Crownstone), Ecovat, E-stone Batteries, Senfal, Solar Monkey (Zonnegarant), Wattsun,
and Zigzag Solar. With this typology, understanding is provided what characterizes different types of
startups and what setbacks are prevailing.
Magnus
Page 1 of 7
Building the typology
In order to really understand firm-specific characteristics, it is necessary to acknowledge their differences.
For example: Zigzag Solar, a startup developing a new type of solar panel for electricity generation faces
different challenges than Senfal, a startup enabling home appliances to profit from favorable energy prices.
After studying the scientific literature, we decided to construct the typology using a startup’s subsector and
its innovation domain.
In our typology we distinguish FOUR Energy subsectors in which startups operate:
1) ENERGY GENERATION | Activities related to processing energy into useful energy
Ex. Bluerise, a project developer and technology provider of ocean thermal energy conversioninstallations (OTEC)
2)
ENERGY FACILITATION | Activities which transfer and/or facilitate energy-products to users
Ex. Senfal, an energy supplier able to offer technology capable of adjusting appliances to favorable
energy prices
3)
ENERGY CONSUMPTION | Activities related to energy use, including energy efficiency
Ex. Bleeve, an online platform matching homeowners with service providers of energy reduction
measures
4)
ENERGY STORAGE | Activities related to storing energy carriers
Ex. Ecovat, a large-scale subterranean barrel which efficiently stores heat between seasons on a
community level
Additionally, we distinguish FIVE innovation-domains:
A)
INCREMENTAL MARKET-BASED | Improved customer perceptions in an existing market
Ex. EnergieFlex, an energy supplier which offers different type of contracts including prepaid
B)
REALLY NEW MARKET-BASED | New market is created with new customer values
Ex. Zonnepanelendelen, a community developer offering investment opportunities in solar projects
C)
INCREMENTAL TECH-BASED | Improved technology is developed for an existing market
Ex. Van.Eko, an electric motorcycle developer with a strong focus on sustainable materials
D)
REALLY NEW TECH-BASED | Completely new technology is developed in an existing market
Ex. DrTen, an inventor of a new battery-technology based on abundant sea salts
E)
RADICAL | New technology is developed for a new market
Ex. Nerdalize, a computer-processor generating heat capable of replacing radiators in homes
Startup types
We combined each startups’ subsector with their innovation domain in order to identify 17 distinct types
of startups. Next, we interviewed at least two startups of each subsector and innovation-domain. By
comparing the findings, prevailing attributes and common challenges were found per subsector and
innovation-domain. On the following page, we present the prevailing attributes in our typology. We can
use this model to describe the type-specific characteristics in-depth.
Magnus
Page 2 of 7
ENERGY GENERATION
INCREMENTAL
MARKET-BASED
REALLY NEW
MARKET-BASED
INCREMENTAL
TECHBASED
REALLY NEW
TECHBASED
ENERGY FACILITATION
ENERGY CONSUMPTION
High degree of rivalry, Long time
Smart technology, Investor relation
horizon, Dependency on government, with strong market party,
Difficulties related to project finance
Technological imitability, Influence of
governmental policies
Clear business-case, Importance of
business partners, Investor relation
with strong market party
Market enthusiasm, Additional costSUBSECTOR
driver in energy system, Technological
challenges
Low entry barriers, Relatively small
market potential, Limited capital
available for funding
Low entry barriers, Relatively small
market potential, Limited capital
available for funding
Low entry barriers, Relatively small
market potential, Limited capital
available for funding
Low entry barriers, Relatively small
market potential, Limited capital
available for funding
Alkmaar Energie, Almeerse Wind,
Duurzame Energie Ramplaan, Zuidenwind,
Energiecoöperatie Zuiderlicht, MiniPower,
SolarWorks!
Bas Energie, Budget Energie, Noorderlijk
Lokaal Duurzaam, EnergieFlex, Fenor,
Greenfoot, Huismerk Energie,
InnovaEnergie, Robin Energie, SEPA Green
Energy, VanHelder, Zonnigrijden.nl
CareToSave (Hyko), Energiescan.nu, Energy
Challenges, Holland RET, Iungo, Lumeco,
Savve, Shifft, Slim Opgewekt
SolaSola, Wattsun
High degree of rivalry, Long time
Smart technology, Investor relation
horizon, Dependency on government, with strong market party,
Difficulties related to project finance
Technological imitability, Influence of
governmental policies
Clear business-case, Importance of
business partners, Investor relation
with strong market party
Market enthusiasm, Additional costSUBSECTOR
driver in energy system, Technological
challenges
Network organization, Low entry
barriers, High time pressure, First
mover
Network organization, Low entry
barriers, High time pressure, First
mover
Network organization, Low entry
barriers, High time pressure, First
mover
Network organization, Low entry
barriers, High time pressure, First
mover
AERspire, BigSolar, E.A.Z. Wind, Sunfloat,
Zonnepanelendelen
Duurzame Energie Unie (DE Unie), Green
Planet Pesse, Solar Monkey (Zonnegarant),
Vandebron
Bleeve, Chabani (Mooywarm), Entelligo,
Finch Buildings, Hoom, Sustainer Homes,
Tvilight, Woodys Housing
S4 Energy
High degree of rivalry, Long time
Smart technology, Investor relation
horizon, Dependency on government, with strong market party,
Difficulties related to project finance
Technological imitability, Influence of
governmental policies
Clear business-case, Importance of
business partners, Investor relation
with strong market party
Market enthusiasm, Additional costSUBSECTOR
driver in energy system, Technological
challenges
Clear benefits, Power of incumbents,
Scarce business expertise, Significant
role in big industry
Clear benefits, Power of incumbents,
Scarce business expertise, Significant
role in big industry
Clear benefits, Power of incumbents,
Scarce business expertise, Significant
role in big industry
Clear benefits, Power of incumbents,
Scarce business expertise, Significant
role in big industry
BlueRise, Earthways, E-kite, Enie,
FlexSolSolutions, Kinegrity, Q Concepts
Design & Engineering, Slow Mill, SolarTech
(Energiedak), Star Engines, Triple Solar,
Wind Challenge Holland
Capacity Energy, GUTTS, Peeeks, Senfal, Slim Breeze, Cereus Technology, Chabel, Flexous, MG electronics, Rebel cell
Met Energie (Nieuwestroom.nl), Viridom
Hamwells, Prêt à loger, Qscent, ScanBatt,
Start2stop, STORM, Synext, Upfall, Van.Eko
INNOVATION
DOMAIN
INNOVATION
DOMAIN
Clear business-case, Importance of
business partners, Investor relation
with strong market party
Market enthusiasm, Additional costSUBSECTOR
driver in energy system, Technological
challenges
Depth of technological expertise, Lowcompetitive environment, Highavailability of funding, Risks related to
product-functioning
Depth of technological expertise, Lowcompetitive environment, Highavailability of funding, Risks related to
product-functioning
Depth of technological expertise, Low- INNOVATION
competitive environment, HighDOMAIN
availability of funding, Risks related to
product-functioning
Daylight Solutions, Delft IMP, EDSG, Green
Turbine, O-foil, Waste4me
Dr Ten, Elestor, E-stone Batteries
Depth of technological expertise, Lowcompetitive environment, Highavailability of funding, Risks related to
product-functioning
Multi-applicability, Network organization, First mover, Depth of technology, High availability of funding
Magnus
INNOVATION
DOMAIN
High degree of rivalry, Long time
Smart technology, Investor relation
horizon, Dependency on government, with strong market party,
Difficulties related to project finance
Technological imitability, Influence of
governmental policies
Blue Motion Energy, Plant-E, Topell Energy
RADICAL
ENERGY STORAGE
INNOVATION
DOMAIN
DoBots (Crownstone) , Ecovat, IBIS Power, Nerdalize, Photanol, PowerWindow, SkyTree, SolarSwing, Zigzag Solar
Page 3 of 7
What does the model tell us?
The type Energy Generation/Incremental Market-based, for example, is considered challenging as strong
competition with vested parties exists. Also, the capital and time-intensity of projects, and the uncertainty
of government policies have a negative impact on investors. Moreover, the market is already mature and
firms can enter the market easily. To become successful, these startups need specific marketing expertise
to create exposure to investors. Governmental support with procedures is required, as John van Diepen
(Almeerse Wind) illustrates: “I need funding. But I won’t get funding until I have the letter signaling support
with the procedures.”
Another example is the Energy Consumption/Incremental Tech-based type, which was not directly casestudied. With our model however, we can make assumptions for this type. As it comprises technological
improvements related to consuming energy, these types of startups will most likely focus on energy savings
- which have a sound business-case. Large corporates, looking for improvements in energy consumption,
are likely to be interested in investing in these innovations. Startups will benefit from cooperating with
these firms, since they provide access to consumer channels.
We use the type Energy Consumption/Incremental Tech-based as a second example. This type was not
directly case-studied. With our model however, we can make assumptions for this type. As it is a
technological improvement related to consuming energy, it is expected to make energy savings which often
has a clear business-case. Moreover, in energy consumption large firms are looking for improvements and
are interested in investing in these innovations. For the startup this is beneficial as it offers a large market
channel. For example, Anne van Rossum says: “Currently, we are talking with some parties … preferably a
client/competitor who can do promotion” (DoBots). This helps the startups to play a role of significance in a
large industry: “OTEC, can become a very big technology … We can have a significant role in that,”
according to Remi Blokker (Bluerise). For these firms to become successful, it is important that they focus
more on their business-expertise: “in the end our role is more suitable as a technology provider, logically,
but as there is not an active demand from the market yet, we need to develop the projects too,” admits
Remi Blokker (Bluerise). The focus on the business side is often lacking among technology developers.
Energy Generation vs. Consumption and Storage
If we focus more closely on the energy sectors, we find that the overall findings suggest that the Energy
Generation subsector is most challenging. As Wim van de Wall (Zigzag Solar) states: “there is a lot of
competition, a lot of uncertainty, which way we are going, and there is an alternative technology, coal,
which basically costs nothing. Competing with that all is nuts.” Opportunities, however, predominantly
arise in the subsectors of Energy Consumption and Energy Storage. “I think that storage is currently sort of
the holy grail of the energy transition. So at this moment, everyone is looking for it,” says Thomas van Dijk
(E-stone Batteries).
Market-based vs. tech-based innovations
Among the innovation-domains, we find that the market-based domains are characterized by the threat of
entrants. Jan Pieter Versluijs (Solar Monkey) confirms: “You have to make sure that you place yourself
quickly and effectively in the market, because otherwise, you would have the chance that other parties are
there before you”. The market-based innovations can be very promising if the startup is able to force off
new entrants or if it starts a collaboration with an incumbent. “Yes, for example, we have had talks with a
large firm in the energy sector,” says Jan Pieter Versluijs.
Magnus
Page 4 of 7
The tech-based innovations are characterized by technological challenges, which cause risks to productfunctioning. “Yes (we lack) the real specialists, currently very fundamental, as we are really in the research
phase,” illustrates Thomas van Dijk (E-stone Batteries). The really new tech-based can build their own
market position easier, but require more challenging technology development. Incremental tech-based
innovations require support from existing parties for market access.
Radical innovations
The radical innovation-type is risky, as creating a new market more or less single-handedly is very difficult.
“The point is, there is not yet a market. We need to do a lot of missionary work in order to create a market,
before we can sell our product. So there is a big marketing challenge,” says Wim van de Wall (Zigzag Solar).
The technology behind radical innovations is complex and inimitable, if it is successfully developed. Wim
van de Wall: “the power of our concept … is what we’ve learned during our cooperation with ECN and TNO.
Someone can replicate it, but I promise you that it will definitely not function.” When the technological and
marketing-related challenges are overcome, the future for these startups seems very promising, as
competition is more or less inexistent.
Common challenges
Additionally, we identified common challenges which are considered more specific to certain subsectors
and innovation-domains. These challenges provide us with more in-depth insights about relevant concerns
for each startup. Therefore a startup should be endorsed to focus on solving or evading these concerns. If
we zoom on the subsectors we have identified the following common challenges:
1)
ENERGY GENERATION | Threat of alternative technologies in the market | Power of important
stakeholders in the market | Multitude of competing parties | Long time horizon of big projects
restrains support development | Vulnerability to governmental instability | Threat of becoming
insolvent due to long invoice delay | Managing the bureaucracy of working with government |
Governmental inertia restraining procedures | High capital requirements to realize profitable
projects | Private investors mitigate subsector
2)
ENERGY FACILITATION | Difficulty to acquire the required talent | Importance of stron market
powers | Highly competitive market environment | Risks of imitation by other market parties | Low
profit margins on products due to competition | Bureaucratic processes to comply with regulation |
Regulations impeding market access for the innovations
3)
ENERGY CONSUMPTION | Product or service lacks price competitiveness | Gap between available
technology and consumer implementation | Connecting partners to business | Distribution of power
in the relationship with business partners | Importance of stron market powers | Incumbents image
lack fit with impact ambitions
4)
ENERGY STORAGE | Additional costs due to investment | Losses of energy due to inefficiencies |
Undecided case who is responsible for bearing the additional costs of storage | Government is
hesitant in applying storage | Lack of access to top-class technological experts | Extensivenss of
required R&D for innovations
Magnus
Page 5 of 7
Zooming in on the challenges per innovation-domain:
A)
INCREMENTAL MARKET-BASED | Highly competitive market environment | High threat of
replication by competitors | Low profitability because of small market potential | Slow market
development | Solution can be too specific for market-wide access “ Dependency on founders own
capital “ Low availability of erlay phase private capital
B)
REALLY NEW MARKET-BASED | Difficult to commit partner to the network | Lack of a netwok in the
market | Risks of imitation by other market parties | Difficulties to cope with high workloads | First
mover fears among clients | Gap between available technology and consumer implementation |
Lacking experience associated to youthfulness | Need to create a new market
C)
INCREMENTAL TECH-BASED | Product or service is not price competitive | Similarities with other
solutions in the market | Need fo physical facilities to demonstrate product | Limited market
channels | Lack of power in the market | Low active demend for innovation from market | Slow
market development| Lacking expertise in some business fields
D)
REALLY NEW TECH-BASED | Diffucult technologic challenges | Lack of access to highly-qualified
technological talent | Underexposure of the business-related activities | Need for expensive physical
facilities to develop product | Risks concerning product-functioning
E)
RADICAL | Inablity to profile the innovation in a market | Misjudgements in applying focus |
Difficulty to commit partners to the network | Lack of a network in the market | First mover fears
amon clients | Gap between available technology and consumer implementation | Need to creat a
new market | Difficult technological challenges | Lack of access to highly qualified talent |
Underexposure of the business relatesd activities | Need for expensive physical facilities to develop
product | Risks concerning product-functioning
Concluding remarks
By assessing the startups on a full-scale, we were able to divide the startups present in the Dutch energy
ecosystem into a typology. The division based on energy subsectors and innovation-domains enables a
detailed bottom-up insight in what characterizes similar startups. Moreover, it enables us to account for
heterogeneity. Our results suggest that innovation in energy is versatile. The study shows that the broad
range of activities creates different rules for differing types, whereas we acknowledge that especially
capital-intensive startups have difficulties to succeed. Opportunities for startups arise when their
innovations are ‘soft’ but effective. Finally, it should be noted that eventhough many startups will fail, the
high quantity of startups in the energy sector should be considered promising for innovative contributions.
Magnus
Page 6 of 7
About the authors
Johnny Meit (1992) is graduating in Energy Science (Utrecht University) with this research. He has a
background in Business Administration and Interdisciplinary research. Translating technological challenges
into commercial activities is his key-focus.
Ruud Bouwhuis (1988) is consultant for Magnus Red’s Energy team. He has conducted several studies for
Magnus Red in the areas of Dutch Energy market model, the role of SMEs in the evolution of smart grids.
Ruud is project manager in the CWE program, integration the electricity trade in Central Western Europe.
Contact
Please contact Ruud Bouwhuis at [email protected]
for more information this topic.
Magnus
Page 7 of 7