How the magical triangle drives the energy transition
A Prophet's Adversity Is A Wizard's Opportunity
By 2050, 10 billion people will call Earth home, challenging us to meet basic needs while fighting climate change. In his 2018 TED Talk, "How will we survive when the population hits 10 billion?", Charles C. Mann, author and journalist, already offered a bold framework, that’s just as relevant to tackling the energy transition – And when it comes to me, as an early-stage investor in energy-tech startups, I firmly stand in the Wizard’s camp.
Why? Because there is boundless potential for innovation to drive the energy transition. I depict it as a "magical triangle" where three key stakeholders — corporates, startups, and investors — interact to accelerate decarbonization and drive systemic change. Each stakeholder plays a distinct role, and as it is the way of a “magical triangle”, their collaboration is essential to maximize joint success. Let’s have a deep dive into their roles (inspired by Charles C Mann):
THE INCUMBENTS: CORPORATIONS
Corporations, particularly those in energy-intensive industries (e.g., energy, transport, manufacturing), are under increasing pressure to decarbonize. They must adapt to governments, enacting stricter regulations on emissions and market expectations from consumers, investors, and supply chains demand sustainability commitments. But corporates are key to scaling innovations, having the infrastructure and customer base necessary to deploy new technologies at scale. While many corporates invest in internal R&D, they increasingly rely on external partnerships to innovate faster. Partnerships with startups allow them to integrate cutting-edge solutions, such as renewable energy platforms or AI-based grid optimization tools.
Early-on partnerships with startups and investors are critical to overcome challenges, such as cultural inertia, risk aversion, and legacy systems that slow their ability to adopt and scale new technologies step by step instead of one giant leap later on. Corporate venture arms often co-invest with early-stage funds, ensuring alignment between innovation and market deployment.
THE INNOVATORS: STARTUPS
The role of startups in the energy transition is determined as the innovation engine itself - developing breakthrough technologies and business models that corporates need to meet decarbonization goals. They are literally made to take and mitigate risks in developing and commercializing novel technologies like advanced energy storage while maintaining the agility to navigate emerging markets that didn´t exist a decade ago and which they sometime even create. Startups rely on partnerships with corporates for scale and with early-stage investors for funding and strategic guidance.
What startups lack in market access, know-how and capital can be found in corporate accelerators or innovation hubs that have become common pathways for startups to engage with corporates and investors, providing market access, scale, and funding for, while they deliver the innovation needed to meet decarbonization goals.
THE ENABLER: EARLY-STAGE INVESTORS
As Enablers, early-stage investors are pivotal in providing the capital and strategic insight needed to bridge the gap between innovation and large-scale deployment. They deploy funds into high-potential startups, balancing risk and reward. By identifying emerging technologies with market fit, they fuel the creation of scalable solutions. Investors often fund pilot projects, feasibility studies, and early commercialization efforts, helping startups prove their viability to corporates and regulators. Beyond capital, investors provide mentorship, connections, and strategic guidance to startups, helping align technological innovation with market needs.
Investors face their own challenges, such as the long timelines typical in energy-tech innovation and policy risks. However, they often act as catalysts, encouraging corporates to adopt solutions by financially derisking startup cooperation.
Although misaligned incentives, slow corporate decision-making, policy uncertainty and the capital-intensive nature of energy infrastructure poses risks for all parties alike, the energy transition presents a $4 trillion annual investment opportunity, according to the International Energy Agency. Collaboration within the magical triangle can unlock new industries, create jobs, and drive economic growth while addressing climate change.
Sounds smart in theory, eh? It´s easy for me to talk about it. What´s really smart is going out your door and stepping on the road like:
Startup | Corporate | Investor
- Shit2Power | EGLV | Better Ventures
- Everyone Energy | GLS Bank | HTGF & neoteq
- Greenflash | Schalke 04 | FundX
Acting as wizards
The energy transition is a defining challenge of our time, but it is also a defining opportunity. We have the privilege and responsibility to act as Wizards — championing innovation, nurturing groundbreaking startups, and accelerating the shift to a sustainable energy future. Call me Gandalf, but I believe the energy transition is not a threat to growth — it is growth itself.