Support the development of a mature vendor and supplier ecosystem10 Developing a collaborative supplier ecosystem can benefit both industrial companies and equipment suppliers (including manufacturers and installation/maintenance services providers). Industrial companies can gain insight into advanced electrification technologies and trusted suppliers, enabling more informed investment and procurement decisions. At the same time, suppliers can gain market clarity for low-to-medium processes where bespoke installations are required, while better tailoring their offering by understanding demand volume, location and timing to ensure timely availability of equipment and services. Such a collaboration can foster new partnerships, expand and strengthen supply chains, establish design and installation standards, and reduce costs through economies of scale. Challenges addressed Clean power availability and price Limited financing support Risk aversion for new technologies Examples –L&G and Octopus Energy Investment in Kensa Group:11 Legal & General Capital and Octopus Energy invested in the Kensa Group, a manufacturer of ground-source heat pumps. This investment supports production expansion and aims to increase the installation of ground-source heat pumps to 50,000 units per year by 2030. –Iberdrola investing in heat storage technology from Kyoto Group: Iberdrola joins the Kyoto Group as a strategic investor and business partner in an alliance to accelerate the decarbonization of heat in industrial processes with Heatcube, Kyoto’s thermal energy storage solution. Streamline access to private finance and investment support To address high upfront capital costs associated with electrification projects, strategies such as blended finance, off-balance sheet instruments and heat/energy-as-a-service (HaaS/EaaS) models could be used. These financial tools can also attract additional infrastructure investors and public sources, facilitating access to previously unattainable commercial debt. By adopting these approaches, projects can optimize their financial structures and reduce investment risks. Challenges addressed Clean power availability and price Limited financing support Risk aversion for new technologies Examples –Catalyse blended financing – Pentagreen Capital:12 A joint venture between HSBC and Temasek, Pentagreen Capital is a debt financing platform dedicated to accelerating the development of sustainable infrastructure in South-East Asia. The venture aims to finance projects that might not have access to traditional financing and provides risk mitigation for both project developers and financiers. –Enel X’s offering portfolio is focused on power supply throughout innovative solutions as enablers to consumption electrification:13 EaaS solutions allow businesses to outsource energy management and infrastructure investment, sustain electrification path of clients and help companies manage high upfront costs by providing energy services through a subscription-based model. Business and market enablers2 Industrial Electrification: Strategies and Policies for Europe 7

Industrial Electrification 2024