PitchBook, the gold standard for information on venture capital, says investors are ready to finance the transition to a zero carbon emissions world. Today.
By REG CROWDER
https://www.maritimesustainabilitynews.com/
If you’ve been following the writing of Microsoft’s co-founder Bill Gates
[https://www.gatesnotes.com/] you will have heard two fairly sensible observations about the transition to zero carbon emissions by 2050:
(1) The transition will require a lot of capital investment, although much of that money was going to be spent anyway, even if the world continued to be heavily dependent on fossil fuels.
(2) A lot of the technology that is needed to complete the transition in a way that makes economic sense has already been developed and is ready to be put to work. BUT a lot of innovative new technology ALSO remains to be developed to reach the objective by the target date and at a cost that the world economy can survive.
So, that leaves me asking where the rest of the money and innovation will come from. MUCH TO MY SURPRISE there is a good answer to that.
Bottom line: PitchBook, the gold standard for information on venture capital, says investors are ready today to finance the transition to a zero carbon emissions world. I was relieved to discover that the analysts at PitchBook and I are worrying about a lot of the same things.
Late last year the Lawrence Livermore National Laboratory announced a successful experiment relating to nuclear fusion. I spent some time looking beyond the headlines and discovered there was less there than met the eye. A clue was that while a few politicians described the results of the experiment as a “breakthrough,” the scientists characterized the achievement as a “milepost.”
No problem with the scientists. They were respecting the data. I’m comfortable with that. The politicians were warming us up for more subsidies for fusion power research. I’m uncomfortable about that. But I’m not going to launch a campaign to stop them. Yet.
My own suspicion is that by 2050 fusion won’t be commercially producing enough electricity to charge my smartphone. One time.
I started worrying that the public might think that the campaign against global warming is on the cusp of being won and that fusion power would miraculously swoop in and fix everything. Then, PitchBook published two analyses, “Fusion ‘breakthrough’ won’t overshadow renewable energy sources” by senior analyst John MacDonagh and “Nuclear fusion need not apply: Planet-saving tech is ready to scale” by senior editor John Thorne. I will quote from both.
MacDonaugh notes that investors in renewable energy startups are putting only a modest portion of their capital into fusion, relative to other approaches:
“Over the last five years, we have tracked 43 deals in fusion startups totaling $4.5 billion. This compares to overall funding levels of $38.6 billion for the entire clean energy vertical, with the solar photovoltaic and grid-scale battery technology segments representing the largest investment areas in the vertical.”
In other words, the people responsible for investing capital in order to deliver financial returns high enough to justify risk-taking and innovation are mostly betting on non-fusion alternative energy technologies. For the moment the spotlight seems to be on solar generation and battery-based energy storage.
Thorne notes that even if things go well commercial fusion is decades away. And we can’t wait that long:
“The task at hand is upending the global energy system, so more moonshots are certainly merrier. But the climate is not waiting, and dozens of other clean energy technologies are ready for prime time. Moreover, politicians finally seem ready to spend money to accelerate their deployment.
“Venture investors say the primary challenge for climate-tech startups is no longer deep-tech breakthroughs. It's time to scale. But how do they do it? New business models, big-name partnerships and gigatons of software.”
One of my personal heroes, R. Buckminster Fuller had some things to say about how to bring about that kind of change:
“You never change things by fighting the existing reality.
To change something, build a new model that makes the existing model obsolete.”
— Reg Crowder is editor-in-chief of Maritime Sustainability News. Beyond that, he has written the NVCA SmartBrief, published by SmartBrief in partnership with the National Venture Capital Association, since it was launched in 2014. [https://www2.smartbrief.com/rest/sign-up/EC90EF39-E560-458F-82E9-15A63E17EF5A]
Twitter: @RegCrowder
Mastodon: reg_crowder@mastodon.world
LinkedIn: https://www.linkedin.com/in/regcrowder/
—
Sources:
“Fusion ‘breakthrough’ won’t overshadow renewable energy sources,” John MacDonagh, https://pitchbook.com/news/articles/nuclear-fusion-solar-wind-analysis
–
“Nuclear fusion need not apply: Planet-saving tech is ready to scale,” James Thorne, “https://pitchbook.com/news/articles/climate-outlook-2023-vc-startups
–
“Q3 2022 Clean Energy Report,” John MacDonagh, https://pitchbook.com/news/reports/q3-2022-clean-energy-report
–
Photo credit: Solar panels on white roof: https://commons.wikimedia.org/wiki/File:Photovoltaik_Dachanlage_Hannover_-_Schwarze_Heide_-_1_MW.jpg — This file is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license. — https://creativecommons.org/licenses/by-sa/3.0/deed.en
—