The NatureBacked Podcast

Big Game of Energy Transition with Helen Ventures' Terhi Vapola

February 28, 2022 Tarmo Season 1 Episode 4
The NatureBacked Podcast
Big Game of Energy Transition with Helen Ventures' Terhi Vapola
Show Notes Transcript

We spoke with Terhi Vapola about climate tech, energy transition, and Helen Ventures' investments in the fields like EV charging and power grid optimization. 
A few key takeaways from Terhi Vapola:
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"What we want to do is work with the most innovative startups ...  working with people who don't just talk, I think there's plenty of talking and has been for a long time. What we need to do is actually get those things done."
**
"If you think about the existential crisis that we are dealing with, we need to find the solutions. And then at the same time, if you look at the regulatory changes, and ... Green Deal and the amount of public support into making money available for for the actions, which can help us to address it, I think it's a fantastic thing. "
**
"The bi-directional charging is a great opportunity ... those pilots are taking place as we speak ...  of course, you need to have the adoption of the EV charging taking place even further to really balance it. But the steps into that, are like real today already."
 

Tarmo Virki  
Welcome to the NatureBacked podcast of Single.Earth. In this series, we are talking with investors about their vision of the new green world. My name is Tarmo Virki. And in this episode four, I'm talking with Terhi Vapola from Helen Ventures, about how the Finnish Investment Fund is looking to change the world. Enjoy the show. 

Thank you, Terhi, for finding time to speak with us today. Let's talk a little bit about Helen Ventures. People outside in the world -- in Helsinki, everybody knows what's Helen, but I'm sure there are still few people outside that have not heard of Helen Ventures at all yet.

Terhi Vapola  
Helen Ventures is the investment arm of Helen, an energy company here in Finland. And we focus on investing in energy transition and climate tech. So if you think about energy being one of the biggest elements in order to address our goals to go into net-zero and look at the capabilities to find the areas where we need to find solutions. So that's what we work on, so we are focusing on investing in early phase startups. So we can go from Seed all the way to Series B in syndication, the ticket size up to 3 million euros. And in terms of geography, we focus on the entire Europe and Israel. And in this field, we are especially interested in digital technologies. So that's the angle that we have for addressing this issue.

Tarmo Virki  
I think in general, it's so much easier to be a digital startup than analogue startup, right?

Terhi Vapola  
That's certainly true. And here, I would, of course, be the first to admit that in order to address climate change, we need absolutely both. I really think that we have like two parallel streams, which we need to do. One is the physical world, getting the CO2 captured and getting the CO2 from not getting into the atmosphere. And then we have solutions which can help us to optimize, maximize renewable use, balance the grid data, provide the different kinds of things, what do you need to do to be as efficient as possible. Still, the digital is working on top of what we are discussing in this kind of context. It's working on top of something real, be it industrial, be it something do with nature, or whatever. But it does have a direct linkage to the real world.

Tarmo Virki  
I think on the CO2 emission level, you guys at the parent company level made some big decisions last year?

Terhi Vapola  
Helen being one of the biggest energy companies here and being in multiple different kinds of generation capabilities or generation technologies, has done a really, very advanced decision, now to really focus on on the renewables and also cutting off and having the definite timing and actually fastening the timeline to go into not using coal, for example. So so these are, these are, of course, the fundamental parts of us. And especially from the mother company's perspective, taking those steps into the energy transition.

Tarmo Virki  
I used to live for a few decades in Helsinki. I do remember those massive piles of coal almost downtown, which looked really weird when in a country that tries to profile itself as really green and energy-efficient and going forward and so on. So I think the world definitely thanks for that decision.

Terhi Vapola  
And that's a big impact what can be done so making those decisions and moving forward and having the technological capabilities and investing in technologies that can help us take it forward is super important.

Tarmo Virki  
Your headline in your 2021 wrapup blog is: "Let's lead that change we wish to see in the world." Tell us how Helen or Helen Ventures, especially trying to lead that change?

Terhi Vapola  
So what we want to do is work with the most innovative startups. I think that for us, working with people who don't just talk, I think there's plenty of talks and has been for a long time. What we need to do is actually get those things done. Of course, it requires, when we are dealing with this kind of systemic change, there's no silver bullet, which can solve it all, but you need plenty of solutions that take you in the right direction. And in the end, it is really the people who make it happen. So that the inventors and the product developers, the salespeople, all people who actually realize the vision into something concrete and get it scalable and get it out there as quickly as possible so that we can supercharge the future, which we want to get into. And there, of course, we want to support that development and in the market.

Tarmo Virki  
Tell us, what have been your kind of most prominent investments today? What kind of companies would you want to pick out to show that these guys are doing exactly the right thing?

Terhi Vapola  
As an investor, I love all of my children, if you may. So it's hard to pick, but I'll just give you an example of what we have in the portfolio. If you think about the direct CO2 reduction. So there we are, having a company called Gradyent, a Dutch company working on the district heating network, digital twin, and AI optimization. So we like the AI optimization and digital twin, so it's a digital angle. And what they do is basically have a much better model of what this network is all, like knowing the last house and how much water you need to warm to get there. So that it's going to be warm, and especially this wintertime, we appreciate the fact that the houses are going to be warm, but when you know more accurately how the network behaves, you can be able to lower the temperature of the water which goes into the pipeline and has direct CO2 reduction impact. This is the most concrete in that sense. 
But then, if you look at the issues like, for example, we have a special interest in the EV charging startups. So we have a company like Virta in our portfolio, we have ecoG and &Charge from Germany. So if you think about the whole systemic change that is happening, and we see it happening now, the entire transport sector is also under a transition and leading towards the capabilities of having their cars to be electrified. And, of course, we see the OEMs already making such a big impact in terms of starting to produce those in mass volumes. So there, we are especially interested in the charging network side of things. So how to make sure that those cars, you know, you can process you get them charged, and then how to, like, look at solutions to build in there, also from the digital perspective. So maybe those could be some of the examples.

Tarmo Virki  
I think there's a really interesting part with this EV charging networks, the the kind of reverse loop that the car batteries could be used as for the reserve power -- is that happening already? Or how far is that?

Terhi Vapola  
Bi-directional charging is a great opportunity. So what we are doing basically at this stage is that the cars, EV charging gets the batteries of the cars charged. But then, if you think about the whole like systemic change on the renewables and energy production, we start to have more fun and wind being the drivers of when the electricity is produced. And then, if you think about the fact that you need to have the constant supply and demand be matched. You need to have solutions for the rainy day or for the days when it's not sunny or windy. And what do you do? You can use storage systems, and one of the biggest storage systems, which is out there in the future, is going to be actually the batteries of the car. So being able to use those to balance the grid requirements. How to balance it today is basically managing demand and supply. Here the opportunity is really to be able to have the supply from these vehicles which are out there. That's a tremendous opportunity going forward. And then you asked about the status. So status is such that those pilots are taking place as we speak. You need to have the adoption of EV charging taking place even further to really balance it. But the steps into that are real today already.

Tarmo Virki  
Good news, definitely. About Gradyent, the district heating optimization company. I mean, are they in action already? Or how far are they?

Terhi Vapola  
Yeah, yeah, they are in action already. So they are in, in multiple accounts or multiple networks already. And then, of course, the other thing you could add here is also kind of understanding the effect of climate change. So if you think about what we see already, like, we discussed about the winters in Estonia or Finland not being quite the same as they used to be, so the whole climate change we already see so of course, we need to work as much as we can to stop it. 
But at the same time, also, you need to take some cases of what happens in the world when some of those effects take place and there being able to monitor things. So, what we are working on, we have two companies in the monitoring and insights field. 
Think Outside, which is working in the hydropower industry, to understand the amount of water in the snow and be more accurate. So again, you have a balancing power of the water of hydro when the wind and solar are not happening you can use that and be more accurate on when and how much of the 'raw material' you have. 
And then LiveEO, our German company working on satellite technology. So again, the AI using the satellite data to see, for example, issues like a grid, electricity grid, so if you have a storm coming up, and whether you have the risk of some of the trees falling onto the lines, for example. So being able to predict, like vegetation management issues before they happen. So that's what those guys are doing. So you also have that kind of, you could say not direct climate, but it has an impact on this field, where you take it into account,

Tarmo Virki  
Please send them over to Estonia. With the latest storm, I had at my home, the power outage of just 28 hours. A little bit of help?

Terhi Vapola  
They are preventing that from happening so that those trees would have been cut earlier. So that you would have seen that they are too close to the grid, for example. And that would have been a huge benefit for the people and, of course, huge saving for the power companies.

Tarmo Virki  
With climate change, we know that in our part of the world, extreme weather events are set to increase to an abnormal scale. So it's not going to get easier. If you'd speak a little bit about the bigger field of green investments, how do you see this field developing? I'm listening from different directions and hearing about the massive boom, how there are so many interested investors in this field. And some people even speak that there's a lack of startups doing interesting stuff or at least a lack of credible startups. How do you see this green investment boom going?

Terhi Vapola  
I would certainly say that the climate tech investment is now in fashion. So is it that I would also agree to, but I think that is fundamental. So if you think about the existential crisis that we are dealing with, we need to find solutions.
At the same time, if you look at the regulatory changes, and the amount of like Green Deal, and the amount of public support into making money available for the actions, which can help us to address it, I think it's a fantastic thing. 
At the same time, I think that we need those startups, as I said earlier, who can not just talk but actually execute and bring change. We want to see that. The money alone is only a small part of the equation to solving it. I think the biggest part is to actually understand the systemic nature and address the right things that actually make a difference. And having the skills and persuasion to actually make it happen.

Tarmo Virki  
If you look at it from the entrepreneur's side, if somebody wants to tackle those challenges, what would be your recommendation? How to start or where to start from? 

Terhi Vapola  
That's a very broad question. So I think that it always depends on the person. I think that as an entrepreneur, maybe I'll take a step back. So you need to have passion for what you're doing, you need to have enough understanding, so that you can actually solve it, you need to be super smart so that you can address something which others have considered difficult. And you can forecast how things will pan out earlier so that you are there at the right spot at the right time. I think the biggest issue is that in any field, I think this is not just in the climate tech or energy transition, but in any field, that you have a postulation to get up every single time you find that, okay, I can't do this. I saw this cartoon at one point where it sort of said what a startup is. There was this guy with the rock, which was much bigger than the guy, and he was taking it like a black slope upwards. And that's the kind of thing that you need to be willing to do. And then of course, it obviously says that you need to join forces, so having people to join your task to, to actually make it happen. And, again, I think one of the things also is like, being visionary is great, but being able to work on something which is actionable, so that you can take it to the market and make a difference is probably the most most valuable thing. So I think you need to work on both areas, of course, you need to work on, you know, breakthrough technologies as well. But I think we need quick solutions also. And then, as I said, one solution, no one solution solves it all in the short term. So, therefore, having a solution that addresses some part to take it forward.

Tarmo Virki  
Because the challenge is enormous, there is room for a lot of companies to develop, you know, part in that system to make it work really.

Terhi Vapola  
Exactly, exactly. And then it goes into what is your expertise? So how can you add value? And what is the uniqueness of the solution and the problem? Of course, the problem must always be real and big enough, worthwhile your effort because it's such hard work anyways, so do something that actually makes a difference. 

Tarmo Virki  
In climate tech, it's kind of obvious, there is a massive problem. And if you solve a small part of it, you're on the winning side already, or we are all on the winning side, to be fair.

Terhi Vapola  
There is also an understanding of systemic change. Understanding that you have the energy transition, you have biodiversity, you have different kinds of bio-economy and circular economy and, or carbon circularization, or whatever. So all these different elements are intertwined, which, of course, is super hard to see that you need the other parts to do this in order to get this and that moving. That also, of course, increases the challenge of why it is so difficult to solve.

Tarmo Virki  
Slowly starting to wrap up looking into 2022. What are you looking most for? What are your big expectations for this new year?

Terhi Vapola  
This year, I'm basically looking at two things. One is we are still very much in Helen Ventures are adding new portfolio companies. So we're in the investment period. But then, at the same time, we are super excited about working with the startups in our portfolio and helping them grow. So there is a dual perspective, which I'm very much looking forward to working on.

Transcribed by https://otter.ai