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New Wave | Hugo Rauch | Substack
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🌊 Orchestrating the Energy Transition
Why the biggest opportunity in energy may not be inventing new technology, but making the entire system work better.
We’re joined by Julia Padberg, Partner at SET Ventures, one of Europe’s longest-standing specialist energytech investors. SET has been investing in the energy transition since 2007 — long before power became one of venture capital’s hottest markets.
In this episode, we unpack what nearly two decades of energy investing teaches you about building enduring venture returns — and why Julia believes the energy transition is increasingly an integration challenge, not a technology challenge.
As more investors rush into power, SET is taking a different approach: staying disciplined on valuations, backing companies that own critical customer interfaces, and looking for the orchestrators capable of connecting software, hardware, assets and capital.
We also dive into one of the most interesting emerging models in climate venture: blended capital. Companies such as Decade Energy and Enrise can use infrastructure financing for physical assets while venture capital funds the technology and operating company — potentially allowing them to scale physical infrastructure without destroying venture-level returns.
In our conversation, we covered:
→ How do you build a venture firm that lasts? Why SET’s longevity comes down to specialization, network, discipline and becoming a trusted partner to both founders and LPs.
→ Why everyone suddenly wants to invest in power. Energy security, electrification and sustainability are converging — but more capital also means higher valuations and more competition.
→ Why SET doesn’t chase the hype. Entry valuation still matters in a European energy market where unicorn exits remain relatively rare.
→ The real bottleneck in the energy transition. Julia argues that we already know how to make solar panels, batteries and EVs cheaper. The next challenge is coordinating millions of distributed energy assets.
→ Why orchestration could create the biggest companies. The winners may be businesses that combine software, hardware, financing and services into one simple customer proposition.
→ Can flexibility markets become overcrowded? Julia explains why the absolute volume of flexibility needed could continue increasing as intermittent renewable generation grows.
→ The rise of blended capital models. How venture-backed companies can separate their technology stack from their capital stack using SPVs and infrastructure financing.
→ Why infrastructure capital can actually increase venture returns. Rather than forcing VCs to fund batteries, solar or charging infrastructure, asset financing can remove one of the biggest constraints on scaling.
→ Where AI fits into energy. From biodiversity monitoring around wind farms to infrastructure operations, Julia sees opportunities for AI to replace expensive legacy systems with cheaper, more intelligent solutions.
→ Energy security is becoming an investment category. Cybersecurity, physical infrastructure monitoring and decentralised energy systems are moving higher on the agenda.
→ Europe’s fragmentation is both a problem and a moat. Different regulations, grids and market structures make expansion harder — but companies that learn to navigate that complexity can build powerful competitive advantages.
→ Why European startups don’t always need to internationalise immediately. In enormous energy markets such as Germany, owning a large portion of the value chain can create very large businesses without expanding into ten countries from day one.
And Julia leaves us with three lessons from a decade of investing:
1. The energy transition is an integration challenge.System integration and great business models can matter more than another silver-bullet technology.
2. Value capture matters as much as value creation.Creating value for the energy system isn’t enough — the best businesses position themselves at critical interfaces where they can actually capture it.
3. The best founders make complexity feel simple.Customers don’t want to understand every layer of the energy system. They want a solution that saves money, removes friction and makes saying yes obvious.
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