After a series of fits and starts, climate-related technologies are finally getting traction with the investor community. Burned first by failed investments in the early 2000s, and then by backlash to the Solyndra debacle in 2011, major venture capitalists and private equity funds have largely stayed on the sidelines with respect cleantech opportunities. Until now.
According to financial data company PitchBook, investors are now marshaling billions of dollars to tackle climate change. A confluence of recent trends including extreme weather disasters, an international push for net-zero emission targets, and new tech breakthroughs have brought incentives for climate related incentives to critical mass.
PitchBook reports that global investors have closed as many climate-focused funds already in 2021 as were raised during the previous five years combined. PitchBook quotes Steph Speirs, co-founder and CEO of Solstice, a solar energy startup, as saying, “Today's enthusiasm for climate tech represents a turnabout for an investment thesis that many considered a fringe strategy just a decade ago.” New market dynamics are also a factor. In 1977, one solar energy watt cost around $81, according to Our World in Data. That price plunged to 38 cents by 2019. "Even if you do not believe in climate change, you cannot dispute the economic argument for deploying renewables," Speirs said.
As a result, more traditional venture firms, CVCs and private equity firms are creating funds that specialize in climate solutions. This is great news, both for cleantech companies seeking to raise capital and for downstream customers looking to finance projects with decarbonization as an objective.
Read the complete PitchBook article here.
Or, in the words of blogger and journalist David Roberts: “Clean electrification is the entrée. Everything else is a side.” Roberts says the key to hitting net-zero emissions by 2050 is to immediately begin reducing emissions and maintain a rapid pace of reduction for the coming three decades.
He says we can think of the work required in two parts. Job One is to rapidly push fossil fuels out of the system. Job Two is to develop new ways to continue rapidly reducing emissions from 2030 onward. Job Two is important. But Job One is the main thing.
What does Job One consist of?1. Replacing fossil fuel power plants with renewable energy, batteries, and other zero-carbon resources;
Or as Roberts puts it: electrify everything!
Read his post here.
On July 14th, U.S. Secretary of Energy Jennifer M. Granholm announced the U.S. Department of Energy (DOE)’s new goal to reduce the cost of grid-scale, long duration energy storage by 90% within the decade. This is the second target within DOE’s Energy Earthshot Initiative, aiming to accelerate breakthroughs that store clean electricity and make it available anytime, anywhere.
Long duration energy storage – defined as systems that can store energy for more than 10 hours at a time – would support a low-cost, reliable, carbon-free electric grid. Cheaper and more efficient storage will make it easier to capture and store clean energy for use when energy generation is unavailable or lower than demand – for instance, so solar-generated power can be used at night or nuclear energy generated during times of low demand can be used when demand increases.
Read the press release here.