At the recent Square Peg 2023 AGM, Square Peg Partner, James Tynan, hosted a fireside chat with Neara’s Chief Commercial Officer, Jack Curtis. They discussed the latest developments at Neara, and how the company is contributing to the climate tech space.

JT: What pulled you into the energy space?

JC: I was originally focused on the ‘dirty’ side of power at Goldman Sachs dealing with oil, gas and coal. I was there at the time when the first hypescale of renewables took off, catalysed through one of my clients FirstSolar. They had manufactured, at the time, the cheapest solar panel on Earth, and that really drove the beginning of the solar cost reduction trajectory. I moved across to that, and essentially for the next 10 years, I lived the journey of renewable energy going from being the most expensive energy generation on the planet, to now being the lowest cost. Over that time, you didn’t just see the technology scale, and the evolution and economics drive down, but an entire ecosystem around it. The cost of financing around clean energy went down, the risk premium, the debt and equity providers plummeted. And so you saw this whole constraint shift from how are we going to replace this carbon footprint because there is nothing economically viable, to something that is the most economically viable today.

JT: What does Neara do?

JC: If you look at the constraint in the energy transition today, we’ve been on this journey towards energy generation not being cost-prohibitive. You also have massive policy tailwinds and massive retail and institutional commitment. But now you have this massive constraint in the network, where there are tons of renewables who want to connect, tons of governments and private sector institutions who want to fund and enable them, but the grid does not have enough available capacity. So in any major market around the world who has a major energy transition policy, this is the number one constraint. 

Neara is a software platform that works with heavy enterprises and governments to create 3D digital models of their energy infrastructure. We do this by taking enormous amounts of data from things like LIDAR and satellites, running them through AI models which then produce a digital model of the network. Our software also has actual tools you can use to do engineering grade analysis on so you can do that work from a desk and not on the field. 

What’s really unique about us is that our models are behavioural, underpinned by a very sophisticated physics engine that results in very defensible machine learning algorithms trained on proprietary assets and data. This lets us not just simulate what something looks like, but also simulate what the infrastructure will actually do in the physical environment. 

JT: How does Neara compare to other technology companies looking to do similar things?

JC: Neara’s gateway use case for every major customer we work with, particularly within the extreme weather context, is to help them locate their physical locations of the infrastructure. And we’re effectively able to do this because our machine learning models have been trained on more proprietary data than any other model in the world. This helps us maintain a pretty strong MOAT. 

And when we compared ourselves to a competing 800 pound software gorilla, their software was really good at locating network assets, but also identifying redundant assets, more so than actual assets. They were subsequently spending more time down-selecting these redundant assets than they were saving time sending hundreds of people into the field to identify assets. And this is only where it starts. Once you know where all these assets are, you need to simulate how these assets will react. This was easier in a steady state mode, but now you have externalities that happen weekly and a massive diversification of electrification. 

These network models therefore can’t just look like something once. It needs to be a living, breathing model that can take in massive amounts of complex data from dozens of data sources, aggregate and reconcile them all, and turn it into an efficient presentation of infrastructure in present and future state. 

JT: How does Neara help not just deal with extreme weather events when they come, like floods, but prevent power from shutting off?

JC: We enable our partners to digitise how events like floods are managed and reacted to when they occur, which has massive implications from a cost point of view because you don’t have numerous people running around, but also obviously from a safety point of view and from an ability to keep power on longer and shut it down at the last minute, while enabling them to turn on power faster.

We also work to solve the problem preventatively by working with partners like Tomorrow.io who can feed us very accurate weather data so we can simulate what can happen to an asset when it happens, both from an event driven context and in a longer cycle climate context, if for example, the the climate is 1 degree hotter 5-10 years from now. 

We can then identify where all the weakness prone areas of the network are pre-emptively. Because what often happens is that you don’t usually have systematic infrastructure-wide failure, you have individual points of weakness that will create massive downstream cascading failure. So what infrastructure companies have historically done because they don’t have the analytical capabilities, is 2-3x their investment in the entire infrastructure redundantly because they don’t know what’s going to fail. 

But Neara can identify, with much greater precision, what will fail so partners can remedy those areas in advance, so when the events do still occur, the damage is a lot less. They can then respond to it much more efficiently, and help them rebuild a more resilient climate infrastructure, more effectively, and at a lower cost profile. 

JT: The energy transition feels stuck. There’s more energy capacity sitting on the sidelines in renewables projects within the US, than the entire US grid. We see the same thing here in Australia, so what is happening?

JC: It’s a homogenous issue. For a decade, we’ve been waiting for renewable energy costs to come down, and lobbying relative governments around the world for the right policies. Now that we have it all, how do we actually execute on it? 

The challenge is that the biggest meter mover would be to take coal and other fossil fuels out of the system and replace them with renewables. But really, the single point of failure that every single transition policy around the world relies on, is to build major new transmission projects that would connect new renewable energy zones to the grid. This is because these energy sources aren’t entirely proximate to where you want them to be. 

However, you have massive supply chain constraints, labour shortages and social licence that hold up these major projects. These projects will therefore take 5-10 years to build and cost $5-$10 billion in capital expenditure, only not to be completed on time or maybe at all.

JT: How does Neara help in this Issue?

JC: We see major new transmission projects as an important part of the solution - we need more electricity infrastructure to connect. However, it’s hard and a heavy lift. We do a lot of work in digitising the process, making them more transparent, integrative and cost-efficient. We do a lot of work around social licence to provide a very accurate, visual licence of what the infrastructure will look like, to diffuse a lot of the fear around heavy infrastructure crossing over into landowners’ backyards.

JT: There’s been evidence that, just with Neara’s software, you were able to double network capacity. How does Neara do that, and what does that mean?

JC: All networks have been run with a meaningful level of redundancy because they weren’t able to analyse where all the inefficiencies resided. What we were able to do is look at every single assumption with how networks were run, one of them being how hot you can run a powerline. 

Heat is a function of how much current is running through a line, so if you have too much heat it sags and electrocutes things. What we did with one of our customers, Essential Energy, is look at every single one of their 1.8 million power lines and optimise the heat temperature at which it could be run, and also simulate the upstream and downstream relationships it has with the rest of their lines. 

You just couldn’t do that historically, and because of that, they were able to increase the heat capacity of their network by up to two times, effectively doubling the available capacity. That is equivalent to building two major transmission projects within Australia, which would take 10 years and cost $15 billion.