Leroy Nyangani is Providing Smart and Clean Energy Solutions Using Data Intelligence

Hi, climate leaders 👋 

Welcome back to another issue of The Climate Scout!

Today at a glance:

• Introducing NeedEnergy

• Detailing their business model, tech, traction and team

• Why do we need this now?

• What is the climate impact?

• How you can support them!

-  Angelica 💜

Featured Startup: NeedEnergy

Today's climate startup is NeedEnergy. NeedEnergy is building the missing platform for trading renewable and clean energy between distributed microgrids, microgrid end-users, and the distribution grid to allow 24/7 uninterrupted power and energy access in South Africa and Zimbabwe.

NeedEnergy Fast Facts

Headquarters

Melbourne and Bulawayo

Technology

NeedEnergy offers a trading platform for microgrids. They use smart meters to bill and collect data on energy use, giving them a unique advantage. They also provide billing and invoicing services for microgrids to easily sell power to their customers. NeedEnergy has expertise in grid standards and regulations, making it difficult for new competitors to enter the market. They are the first company in African markets to offer a platform that combines monitoring, trading, accounting, and virtual power plants. NeedEnergy focuses on distributed energy systems and uses AI and machine learning to improve their service. They have the support of Google, Equinor Technical Support Teams, and NVIDIA.

Business Model

NeedEnergy has a SaaS-based business model where they charge their clients an annual fee. There are three tiers based on the size of the solar solution/microgrid and the size of the gas microgrid.

• Tier 1: For plants bigger than 2MW, they charge between US$15k-30k.

• Tier 2: For plants in the range of 20kW-2MW, they charge between US $1k-6k.

• Tier 3: For subscription based on meters, they charge an annual fee of US$40 per meter.

When NeedEnergy trades energy through their platform, NeedEnergy charges between 15% to 40% depending on the contractual arrangement. They also provide standing smart meters at no upfront cost, but charge a monthly fee of US $10 for the connection and meter for the length of the relationship, which they expect to be over 15 years.

NeedEnergy’s clients include microgrids, prosumers, captive power plants, and energy developers. So far, NeedEnergy has generated over US $200,000 in revenue.

Market Opportunity

NeedEnergy currently serves Microgrid and Captive Power Plant Owners. The potential market size is $218 billion, and the available market size is $1 billion. According to the International Energy Agency and the World Bank, there is a need for 2000 mini-grids each year for the next 5 years, resulting in a market value of $197 billion. This translates to 245GW of new energy assets, which means 172,000 new microgrids with a 1MW capacity.

NeedEnergy charges $1,250 per year for a 100kW Microgrid and $6,000 per year for a 1MW Microgrid. Their SAM is $1.03 billion for digital services only. They face competition from Virtual Power Plant Startups and retailers, but they do not have a focus on Africa. NeedEnergy’s plan is to merge their trading with existing utility-scale trading platforms to expand their reach. NeedEnergy faces risks such as changing regulations, infrastructure ownership, talent loss, and lack of financing. To mitigate these risks, they will acquire necessary licenses and permits, bring in talent with regulatory expertise, partner with VCs and technology companies, collaborate with regional power pools, participate in educational programs, and seek government incentives.

Traction

• Total funding: $158,000

• Techstars Energy Accelerator class of 2023

• 216 smart meters currently operating

• Operating 3 Microgrids which are number 68 Ridgeway North a commercial mall with 14 tenants, Aspire Heights 152 households and Highlands Park the second biggest shopping mall in Zimbabwe

• Working with Cavagna a smart metering partner where NeedEnergy will see 3000 smart meters onboarding into our platform

• Operational and generating revenue with their MVP

Founders

Leroy T Nyangani: Co-founder & Team Lead

• BEng. in chemical engineering

• Solar farm project developments with MAN and Wartsila there Leroy understood the procedure in dealing with the utility from grid connections, grid capabilities, connection points, and the

Desire Masunda: Co-founder & Operations Lead

• BCom in financial management

• 9 years in oil and gas downstream services in the logistics, finance, and operations office at the Puma Energy country HQ office

• At Puma Energy, Desire understood the energy industry, permits regulations pricing, and supply chain including deep relations in the industry

Daleroy Sibanda: Co-founder and Technology Lead

• Dual MSc: mechanical engineering/ mechatronics, robotics &automation engineering

• 9 years as a trader 5 in energy trading at Morgan Stanley

• Part of the Meta renewable energy project development team for its data centers

The team comes with great experience ranging from solar farm project developments and systems, power and energy trading, downstream oil and gas energy services and consultant work with the leading utilities in the world plus the support they have from the likes of Google, Equinor and NVIDIA.

Why Now?

In South Africa and Zimbabwe, there are frequent power cuts lasting 16 hours and 8 hours. This is similar to the situation in the rest of Africa, where over 800 million people do not have access to energy. To meet their energy needs, businesses and individuals are relying on microgrids and captive power plants. NeedEnergy has successfully deployed its first microgrid and has seen a growing demand for its services. The use of technology like IoT, GSM communication, and data analytics has led to a 28% increase in AI and data applications in the energy sector. Startups like NeedEnergy, StaemaCo, and SparkMeter are using these applications to provide energy solutions in both off-grid and on-grid setups. In terms of regulations, Zimbabwe has introduced a net metering policy, while South Africa is testing energy trading between solar installations and the distribution grid in Cape Town and Joburg. NeedEnergy sees this as an opportunity to create an energy market for prosumers. Additionally, there are relaxed licensing requirements for smaller projects in both Zimbabwe and South Africa. The cost of renewable energy, particularly solar, is decreasing every year, making it the most affordable option for deployment, especially in emerging markets with high financing costs.

Support NeedEnergy

• Investors - NeedEnergy would love to connect with VCs who have an impact focus, have invested in Virtual Power Plant Startups, Africa or Global focus

Quarter 3 Funding Report

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Will the climate tech funding downturn come to an end soon? Here are the top three findings:

🚀 Finally, funding rebounds this quarter

After two consecutive quarters of decline, climate tech funding is finally on an upward trajectory again. Q3'23 is set to be one of the strongest quarters, reaching levels last seen in 2021.

📉 Number of deals is on a decline

While funding numbers have increased, deal activity has declined. This discrepancy can mainly be attributed to several exceptionally large deals this quarter, including four deals each exceeding $1 billion.

🌍 Funding is up across all regions

Funding has seen a positive increase in all major regions. Interestingly, Europe has taken the lead over the US in both funding and deal activity this quarter.

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