Innovative energy production and consumption - H Energy & Gentle Energy

Coral reefs are known to serve as a kind of metropolis for marine life. Just as large cities provide people with the necessary infrastructure to eat, sleep, play, and live, in apartments, restaurants, hospitals, and playgrounds, coral reefs allow marine life to thrive through a variety of large coral communities. It provides an ecosystem infrastructure for living.

However, since the 1980s, coral reefs began to change in color to fluorescent or white all over the world. Some environmentalists have analyzed and warned that this is a phenomenon caused by abnormal climate, but majority pay little attention to it, thinking it is just a natural phenomenon of the ecosystem. It became recently known to the public, through the documentary “Chasing Coral” by a diver and founder of The Ocean Agency, Richard Vevers, that the phenomenon of fluorescence and whitening of coral reefs is the process of coral reef extinction due to the rise in seawater temperature caused by global warming.

As the ocean temperature rises and heats up, plankton living on the surface of the coral reefs leave the reef. While the global average temperature rose 1.1 degrees after industrialization, coral reefs equivalent to 20 times the area of Seoul have already been destroyed. It is predicted that, if the temperature rises 1.5 degrees, 70%~90% of all coral reefs will disappear, and with a 2.0 degrees rise 99% will perish. Given the current upward trend, many experts see this coming potentially as early as 10 years from now.

If this scenario becomes reality, it is not difficult to assume that the disappearance of coral reefs will not only cause food problems for humanity due to the decline and extinction of marine life, but also pose a great threat to the marine ecosystem as a whole. However, if you did not know that coral reefs absorb vast amounts of carbon dioxide through photosynthesis and significantly contribute to preventing global warming, then the reality of the same carbon absorbed by coral reefs instead being released back into the air and accelerating the rise in temperature (Negative feedback loop) would not be so apparent.

What's truly frightening about the climate problem is that it creates a vicious cycle in which the effect of one cause reinforces the cause, as in the case of coral reefs. Increased temperatures due to carbon emissions from industrialization processes, such as the driving of diesel cars, manufacturing processes in the steel or cement industry, and power generation processes in thermal power plants, greatly increase the frequency of large-scale forest fires through a decrease in moisture content in forests in California and around the world, thereby causing enormous additional carbon emissions, or greatly accelerate the melting of glaciers around the world, such as in the Arctic and Antarctic, thereby generating additional carbon emissions stored in the deep sea. Even the collateral damage caused by these cycles is difficult to accurately estimate.

It must have been painfully difficult to draw a consensus on the details in the 2016 Paris Climate Agreement among countries with so many different political objectives so nobody should undervalue the draft on it, but nonetheless, the catastrophic scenario is likely to be underestimated than the actual situation. From this point of view, it may be more appropriate to call the issues related to climate and environment as issues of “survivability” rather than those of “sustainability”.

If it really is a situation where we need to address this urgent issue of survivability, stakeholders dealing with this problem will have to find “solutions that can be applied now” and “the magnitude of the impact the solution will have on the environment must be enormous”. However, there is still a preconceived notion that companies in the technology field related to climate or environment are just good companies, and it is difficult to find companies with large-scale business models. Actually, I can’t disagree more. This is not much different from raising questions or doubts like, “who would buy shoes on the Internet?”, 20 years ago, “how do they make money with message apps?”, 15 years ago, “can big data become a business?”, 10 years ago, “AI is just a science fiction” 5 years ago.

Indeed, 2016 Paris Climate Agreement is the pact in which a meaningful level of consensus on environmental issues has been made for the first time on a global scale. Since then, top companies around the world, including Apple, BMW, and Nike, have declared RE100 and have been moving forward in a way that they source the most, if not all, of the electricity they need for the business from renewable energy source, not from the traditional one. And they also push their suppliers to incorporate carbon emission reduction into the processes by giving them the pressure of cutting out the contract if they don’t.

In addition, since advanced countries such as the United States and Europe are planning to impose carbon border taxes, it will make a significant impact on the cost structure and the price competitiveness of companies exporting products abroad. If the plan to raise the global carbon price to $55 per ton becomes a reality, the product competitiveness of carbon emitting companies will be hugely affected by this.

Due to these global movements, related markets are growing at a much faster rate than ever before. Solar and wind power fields, virtual power plant (VPP) for distributed energy management, carbon dioxide removal (CDR), ESS battery platform and BMS (battery management technology) for grid stabilization, electric mobility, green hydrogen technology and storage devices, Power and operation efficiency through IoT / robot / AI, building energy management, carbon accounting software, power efficiency of high-power processors such as GPU and cloud, carbon capture through photosynthesis of microalgae or seaweed, biomass, biodiesel, eco-friendly fertilizer, food innovations, recycling technology, bioplastics… actually it is difficult to list all of related fields. Each of these is not only effective in solving environmental problems, but also will become a vast market.

Thus, among them, we made investments in two companies that we believe, by innovating the way energy is produced and consumed through the IoT platform, to develop solutions that can be applied now to environmental problems and can bring about a great effect.”

H Energy:

By constructing a solar power plant on the roof of a building or apartment, anyone in the general public can take part in the project and earn income from renewable energy generation, and RE100 companies and other electricity users can purchase and use renewable energy power at an affordable price. It is a platform service in the energy field.

Gentle Energy:

By utilizing their self-developed self-powered sensor technology and AI algorithms, manufacturing companies in various fields ranging from aviation, ship/automotive parts, medical devices, pharmaceuticals, chemicals, electronics industries, and agriculture sectors can efficiently manage production and energy management. It is a smart factory solution platform that measures and analyzes factory operations in real time.

In fact, when it comes to environmental issues that may be a matter of survivability, the role of a VC that has to generate returns by investing in innovations and industries sounds like a luxury. Nonetheless the only thing we can do is to make a dent in it by finding the companies that can "make a huge impact" on environmental challenges by developing "solutions that can be applied now" and investing in them.