10 Top Green Energy Companies in the UK 2021

| Lucy Wilson

The high-growth cleantech and green energy sector is a diverse ecosystem of startups and scaleups working to protect our planet. From electric vehicles (EVs) and renewable energy companies to insect-based protein for your pets, the UK is home to a whole host of exciting companies developing innovative clean technologies to slow climate change.

In our annual equity market update, we stressed the need for purpose-driven businesses like these during the coronavirus pandemic. Whilst the arrival of COVID-19 did temporarily reduce global fossil fuel consumption and CO2 emissions, we’ve already seen these aggressively bounce back to—and now surpass—pre-lockdown levels. In fact, data from the International Energy Agency shows that global carbon emissions were 2% higher in December 2020 than in the same month in 2019. 

The need for green technology is clear and, thankfully, we’re not the only ones who think so. In March, the launch of the Circular Electronics Partnership (CEP) saw Microsoft, Dell, Amazon and Google join forces to help build a circular economy for electronics by 2030. That same month, Uber’s EV-only ride service launched in London, shortly after Heineken announced it’s been turning surplus beer into green energy in its Manchester brewery. Meanwhile, in Glasgow (home of COP26), Costa is trialling the use of blockchain technology to make it easier for its customers to caffeinate responsibly.

But it’s not just big firms getting involved in the green revolution. Investors too are putting their weight behind the movement, with increasing numbers of Silicon Valley VCs now racing to back clean energy ventures (no doubt taking note of Tesla’s recent trillion-dollar valuation), in what’s being called ‘cleantech 2.0’. And similar trends are being seen outside of San Francisco too. 

Over the past year, dozens of cleantech startups have listed in the US, many via SPACs, including London-based electric car unicorn Arrival, which was acquired by CIIC Merger Corp and is now listed on the Nasdaq. Joining Arrival in the herd of UK unicorns, fellow cleantech Britishvolt surpassed the billion-dollar valuation mark in September this year. The EV battery producer is expected to float on the London Stock Exchange at some point in 2022.

So which of the UK’s sustainability startups should you be looking out for next? In this article, we explore investment trends in the UK cleantech sector, and the high-growth green energy companies that raised the most funding in 2020. We also take a closer look at the ongoing UK energy crisis, how it came about, how tariffs are being affected, and the impact of the crisis on energy and power companies across the country.

UK cleantech sector: headline figures 

Of the 34k+ high-growth UK companies now tracked on the Beauhurst platform, there are currently 978 operating in the cleantech, greentech, or green energy space. Of these, 89 are academic spinouts (9%), three times the overall proportion of spinouts among ambitious businesses in the UK (3%). The UK’s cleantech innovators are spread across the country, but are especially concentrated in London (247), the South East (134), and Scotland (109).

Regional distribution of uk cleantech companies

Regional distribution of UK cleantechs

High-growth UK cleantech companies are relatively early-stage, with 46% classed as Seed and 28% as Venture, within Beauhurst’s ‘stage of evolution’ framework. In comparison, just 10% are currently at the Growth stage and 12% at Established stage, whilst 5% are inactive (albeit not ‘dead’) or in administration/liquidation, the Zombie stage.

Stage of evolution breakdown of uk cleantech companies

Stage of evolution breakdown of UK cleantechs

Since 2011, the UK’s cleantech and sustainability sector has raised more than 2.5k equity fundraisings, worth a total value of £5.29b. Of these, 903 were announced rounds (totalling £3.61b), whilst 1,598 of them—64% of all cleantech deals—were unannounced funding rounds (totalling £1.68b). Together, UK cleantech startups have also secured at least 2.3k innovation grants over the past decade.

Cleantech investment trends

Announced equity investments into uk cleantech companies 2011-Q3 2021

Between 2011 and 2020, announced equity investment into high-growth cleantech companies saw significant growth, in both number and value. In fact, just 55 deals were secured by green energy startups 10 years ago, amounting to £180m. But by 2020, yearly deal numbers had risen to 105, whilst the amount raised peaked in 2019 at £632m—more than double the year before (£308m). 

This was largely down to green energy supplier OVO Group’s massive £200m raise with Mitsubishi, in February 2019. In comparison, 2018’s largest announced equity deal was a £60m round, secured by renewable electricity and gas company Bulb. The total amount of funding raised in 2020 remained very high, however, at £624m. The pandemic failed to deter several large funding rounds, including clean energy storage company Zenobe’s £150m deal in November.

By the end of Q3 2021, a record 112 deals with UK cleantech companies had already been announced. And whilst the amount raised this year (£475m) is yet to reach the heights seen in 2019 and 2020, it’s on track to surpass them by the end of Q4. The biggest round of 2021 so far has been Flexion Energy’s £150m fundraising with GLIL Infrastructure, completed in July.  

Some investors have been particularly active in the UK’s cleantech innovation space, with crowdfunding platforms Crowdcube and Seedrs facilitating 77 and 44 announced equity deals, respectively. Scotland’s national economic development agency, Scottish Enterprise, comes in third with 27 deals, followed by IP Group with 23, and Cambridge-based co-investment fund SyndicateRoom with 21.

top investors into uk cleantech (by number of announced deals, 2011-Q3 2021)

Top investors into UK cleantechs

How the 2021 energy crisis has affected UK businesses

A combination of factors, including extreme weather conditions and post-COVID economic ramp-ups in Europe and Asia, have caused a shortage in natural gas stockpiles over the past year. Prompting a surge in the cost of wholesale gas and electricity, this has had a dramatic impact on energy companies and households across the globe. 

In the UK, wholesale gas prices have risen by 250% since the start of 2021. Meanwhile, in August, the UK’s wholesale electricity price surpassed £100 per megawatt-hour (MWh) for the first time since its inception in 1990. Household energy bills have reached record highs as a result, with the energy regulator Ofgem announcing that these are likely to increase further next spring.   

Due to the pricing cap on tariffs in the UK, however, energy suppliers have been unable to pass the full extent of price increases onto customers. This has led to the closure of 18 energy companies since the start of September, including Utility Point and People’s Energy, and impacted around 2m households. Ofgem has appointed the likes of British Gas, Shell Energy and E.ON as new suppliers for affected households. This has enabled incumbent energy providers in the UK to increase their market share, shifting the balance away from challenger brands. 

Meanwhile, with major high-growth firm Bulb now also on the brink of collapse and seeking emergency funds, reports suggest the Government has accelerated its contingency plans. OVO Energy, Octopus and Shell Energy have all been in talks with the firm in recent weeks, but a takeover is now considered unlikely. One of the biggest names in UK green energy (serving around 1.7m households) and among the country’s fastest-growing companies, Bulb sources electricity from solar farms, wind turbines and hydropower. It provides customers with green gas and offsets emissions with various carbon reduction energy projects. 

The energy crisis has heightened calls to speed up the switch to renewable energy in the UK. The country is particularly vulnerable to fluctuations in gas prices, with many households relying on gas for cooking and heating, and 50% of the UK’s electricity still being produced by gas-fired power plants. But there are plenty of innovative cleantech startups now emerging, ready to take the helm in the UK’s energy transition.

Top clean energy generation companies

The cleantech industry can generally be divided into two verticals: clean energy generation and energy reduction technologies (although a handful of businesses do fall into both). Clean energy generation companies make up 37% of the UK’s high-growth cleantech sector. These businesses are working to combat climate change by reducing our reliance on fossil fuels through renewable sources. These include solar energy, wind energy, geothermal, hydropower, biomass and biofuels, and now fusion.

Rank Top 5 Clean Energy Generation Companies Amount Raised in 2020
1
Tokamak Energy
£67m
2
First Light Fusion
£18.7m
3
Recycling Technologies
£8.69m
4=
Bramble Energy
£5m
4=
LAT Water
£5m

1. Tokamak

Tokamak Energy was spun out of the Culham Centre for Fusion Energy (CCFE) in Oxford. It’s working to advance the development of clean energy production through fusion (the joining together of hydrogen atoms), using devices that combine plasma in a magnetic field along with superconductors.

To date, Tokamak Energy has secured £123m in equity fundraisings, across 10 rounds, and at least £11.4m in innovation grants. The green energy company’s January 2020 raise, totalling £67m, is being used to accelerate its plans to build a fusion reactor by 2030.

2. First Light Fusion

First Light Fusion is researching a new approach to inertial confinement fusion (ICF) for power generation. Unlike other sources of renewable energy, such as wind power or solar power, fusion can produce baseload power regardless of the weather.

Spun out from the University of Oxford in 2011, First Light Fusion has so far raised £53m in equity investment, across seven rounds. It secured a £18.7m round in December 2020, from Oxford Sciences Innovation, follow-on investor IP Group, and Australian fund Hostplus, at a pre-money valuation of £49.9m. The money is being used to make 23 new hires, upgrade resources, and accelerate existing workstreams.

3. Recycling Technologies

Spun out of the University of Warwick in 2012, Recycling Technologies has developed modular technology that can convert mixed plastic waste into feedstock for new plastic production. The company wants to create a circular economy for plastic, to reduce greenhouse gas emissions and ocean waste, by installing its chemical recycling technology at existing waste sites.

Recycling Technologies has so far raised at least £23.3m in equity investment, across 13 funding rounds, plus more than £6m in innovation grants. In March 2020, it secured a £8.69m equity fundraising from Mirova and Finland-based fund Neste, at a pre-money valuation of £33.7m. This latest funding enables the green energy company to start building its technology on a commercial scale in Scotland.

4= Bramble Energy

Bramble Energy designs and manufactures low-cost hydrogen fuel cells, using printed circuit board (PCB) materials. The company was spun out from UCL and Imperial College London in 2015, and set out to supply businesses with cost-effective and scalable renewable energy sources.

It has raised £5.89m in equity fundraisings so far, across three rounds, plus at least seven innovation grants. The renewable energy company secured its latest £5m deal in August 2020, at a pre-money valuation of £3m. The round saw involvement from BGF Growth Capital, alongside several follow-on investors, including IP Group, Parkwalk Opportunities EIS Fund, and UCL Technology Fund.

4= LAT Water

LAT Water develops and implements renewable energy technologies for desalination and wastewater treatment. By the end of 2020, the company had secured £5.57m in equity investment, across two funding rounds, alongside numerous innovation grants.

LAT Water raised a £5m investment in April 2020, from environmental investment fund Earthworm, at a pre-money valuation of £12.4m. The money is being used to fund the expansion of the renewable energy company into international markets, with units so far being installed and operating in the UK and China.

Top energy reduction technology companies

Alongside clean energy providers, 26% of the UK’s high-growth cleantech companies are currently operating in the energy reduction space. These businesses instead focus on making the energy industry more efficient, helping customers to reduce their carbon footprint and minimising the negative environmental impact of non-renewable energy use.

Rank Top 5 Energy Reduction Technology Companies Amount Raised in 2020
1
Carbon Clean Solutions
£30m
2
Enertechnos
£5m
3
Moixa
£4.6m
4
Propelair
£4.22m
5
SaveMoneyCutCarbon
£3.65m

1. Carbon Clean Solutions

Carbon Clean Solutions develops CO2 capture and carbon separation technology for the industrials and gas industries. Through its modular design power plants, the company aims to help large-scale emitters become carbon neutral and leverage the growing value of captured carbon.

By the end of last year, it had raised £34.3m in equity investment, across four funding rounds, and at least £3.35m in innovation grants. Carbon Clean secured two equity deals in 2020, to grow the team and expand its technology to heavy industry. The first of these was in February, totalling £12.4m, whilst its latest £17.6m raise in July saw involvement from multiple funds, including follow-on investors Chevron Technology Ventures, Marubeni, and WAVE Equity Partners.

2. Enertechnos

Enertechnos has developed a new electrical transmission cable using capacitance technology which minimises energy losses. The Capacitive Transfer System (CTS) can transport electrical energy more efficiently from power plants to end consumers than the high-voltage wires used in traditional power grids. It can also be applied to other sustainable projects, such as wind farm repowering, EV adoption, and smart grids.

The energy efficiency startup raised six rounds of equity funding between 2015 and 2020, totalling £8.36m. It secured a £5m fundraising in May 2020, at a pre-money valuation of £27.2m, to expand the company’s engineering, commercial sales, and marketing teams.

3. Moixa

Moixa provides a range of energy storage systems for residential and commercial use, including AI energy-management software, and smart batteries which optimise solar energy and can be added to existing solar panels. 

Over the past decade, Moixa has raised £23m in equity investment across 10 rounds, and at least 19 innovation grants, worth £4.94m in total. In July 2020, the company secured a £4.6m equity deal with existing investors, including Japanese fund ITOCHU. The investment is supporting Moixa’s continued international expansion in Japan, Europe, and the US, plus its partnership with Honda to deliver smart EV charging software.

4. Propelair

Propelair has developed a low water-flush toilet system which can be installed onto existing drains, significantly reducing the water usage of commercial buildings. The green energy company has secured six rounds of equity financing to date, totalling £16.5m, and over £1m in innovation grants for its sustainability tech.

It raised two fundraisings in 2020, including a £1.22m investment in June, via Seedrs and the Government’s Future Fund. In December 2020, Propelair secured a £3m deal, led by impact investment fund Earth Capital, at a pre-money valuation of £7.9m. This latest round is funding further product development, as well as Propelair’s expansion into water-stressed markets across the Middle East, Australia, Hong Kong, and Singapore.

5. SaveMoneyCutCarbon

Founded in 2012, SaveMoneyCutCarbon markets itself as a single go-to platform for companies and households wanting to reduce their energy and water consumption. It offers energy usage analysis and advice, sustainability consultancy services, energy-saving project installation for businesses, and supplies a wide range of eco-friendly products for trade and the home.

The clean energy company has secured £8m in equity fundraisings, across nine rounds. It raised its latest investment in May 2020, at a pre-money valuation of £13.7m. The £3.65m deal with Barclays’ Sustainable Impact Capital fund is being used to accelerate the company’s plans to grow nationally and beyond.

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