by Sanghoon Lee, Yonsei Global MBA ’25, Seoul, South Korea (Fuqua Exchange)
This article was written in response to a class discussion in the EDGE Seminar class at Duke University’s Fuqua School of Business in Fall 2024. This article voices one student’s perspective and does not necessarily represent the views of Duke University.
On September 18, 2024, in the EDGE seminar, Janice Tran, CEO of Kanin Energy, spoke about her career working in energy and her experience as a founder. Her startup, Kanin Energy, works with industrial customers to improve their efficiency by turning waste heat into power. Although this technology isn’t new, it’s still not widely used due to high capital costs and other factors. Her presentation gave me a fresh look at the energy industry, especially from the perspective of a startup working in the complex world of energy infrastructure and investment.
Energy innovation in Korea: Learning from global examples
One of the key points Ms. Tran focused on was the potential for waste heat recovery technology, which has yet to be fully utilized in my home country of Korea. While many companies in Korea have already invested in solar and wind energy, waste heat recovery remains an untapped opportunity. In industries like manufacturing, where Korea has a strong presence, this technology could help cut energy costs and reduce greenhouse gas emissions.
However, as Ms. Tran pointed out, even in markets where this technology could be useful, adoption has been slow due to the high initial costs and reluctance to invest in new infrastructure. This is where government policies, tax incentives, and partnerships between the public and private sectors can make a difference. If Korea implemented similar policies, it could reduce barriers for energy startups and help larger industries invest in waste heat recovery and other energy-saving technologies.
Korea’s energy sector is highly regulated, and energy startups are rare. Strict regulations and limited financial support make it hard for new companies to enter the market. Listening to Ms. Tran made me reflect on the differences between Korea and other countries, and how her experience could offer valuable lessons for future energy ventures in Korea.
The importance of finding new ways to finance energy projects
Kanin Energy not only develops technology but also helps businesses adopt it without requiring large upfront capital costs. Instead, Kanin installs the technology and shares the profits with the client, making it easier for businesses to move toward clean energy solutions.
As a banker, I understand how critical creative financing is, especially in sectors like energy that require significant upfront investment. Kanin’s financing model is particularly relevant to Korea, where banks are often cautious about funding energy projects due to regulatory risks and the uncertainty of the global energy market.
The model Kanin Energy uses could help Korean banks and investors rethink how they support energy startups. Revenue-sharing models and other financing strategies could allow startups to grow, reduce risks, and contribute to a cleaner, more sustainable future. This would help Korea’s energy industry move away from its reliance on fossil fuels and towards a more diverse and eco-friendly economy.
The role of banks in supporting energy startups
From my experience working at Industrial Bank of Korea (IBK), I’ve seen how important it is for banks to play a role in nurturing early-stage companies. In Korea, where energy startups face many financial and regulatory hurdles, the backing of banks and investors is crucial. Ms. Tran’s experience reinforced for me the idea that early-stage funding, combined with innovative business models, is essential for the success of energy startups.
As someone working in the banking sector, I feel a responsibility to push for more support for startups in the energy space. Korea’s transition to clean energy depends not only on government policies but also on whether the financial industry is willing to back new ideas and technologies. If we adopt new models, like financing energy projects through revenue-sharing, we could unlock significant potential for innovation in Korea’s energy sector.
As Korea works towards a more sustainable energy economy, we must embrace both technological innovation and creative financing to support the growth of energy startups. We need to rethink how those of working in banking can better support startups, especially in capital-intensive sectors like energy, which take time to show returns. By providing flexible financing options and supporting new business models, we can help drive the energy transition forward, one startup at a time.
References
[1] CMS Law. “Renewable Energy in South Korea.” CMS Expert Guides. (2023). https://cms.law
[2] International Energy Agency (IEA). “Korea Energy Master Plan: Outlook and Policies to 2035.” IEA. (2014). https://www.iea.org
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