You probably heard the massive news yesterday (even Barack Obama tweeted about it, you guys): Bill Gates and a bunch of fellow tech titans announced the launch of Breakthrough Energy Ventures: a billion-dollar clean energy investment fund that every energy manager should know about! Read on to learn how to unlock this shiny new funding source for your next energy project.
What is Breakthrough Energy Ventures?
Following last year’s foundation of the Breakthrough Energy Coalition, Bill Gates announced the founding of Breakthrough Energy Ventures (BEV), a 20 year venture capital fund made up of Breakthrough Energy Coalition members.
The aim of the fund is to invest “patiently” in the commercialisation of emerging technologies that reduce emissions in electricity generation and storage, transport, industrial processes, agriculture, and energy efficiency.
Who’s investing?
Joining the Microsoft co-founder to direct BEV are fellow titans of the tech industry including Jack Ma (Alibaba), Hasso Plattner (SAP) and renowned investors John Doerr and Vinod Khosla. BEV will also benefit from a star-studded A-list of initial investors, including Jeff Bezos (Amazon), Richard Branson (Virgin Group), Reid Hoffman (LinkedIn) and Masayoshi Son (SoftBank). Collectively, they are worth almost $170 billion, although only a fraction of this amount will be invested into the 20-year fund.
What’s the energy efficiency connection?
The Breakthrough Innovation Landscape
The Breakthrough Innovation Landscape In order to know where to invest to have the greatest impact against emissions creep, the board has mapped out what they are calling the Breakthrough “Landscape of Innovation.” This landscape is comprised of 5 key areas, called “Grand Challenges”, which represent the biggest contributors to global greenhouse gas emissions. Two of them are directly related to energy efficiency, and inform 55 “Technical Quests”, each with several different “Investment Pathways”:
Grand Challenge: Electricity
How can we deliver reliable, affordable zero-carbon electricity to the world?
Most of the innovation potential in the area of electricity involves driving down costs and improving quality of technologies we already use, such as making them more intelligent and efficient. Although BEV places the emphasis of this challenge on innovating renewable energy generation, an encouraging focus is also placed on finding new and better ways to use, transmit, control and store electricity.
Interesting Technical Quests for energy managers:
- Ultra-Low-Cost Electricity Storage
- Low-GHG, Reliable, Distributed Power Solutions
- Next-Generation Ultra-Flexible Grid Management
Grand Challenge: Buildings
How can we eliminate emissions from our homes, offices, hospitals, and schools?
Combined emissions from buildings contribute nearly 20% of global greenhouse gas emissions, so the mission here is to design and build the next generation of buildings smarter, cheaper and more efficient.
The technical quests for this challenge are divided in innovating small-scale efficiencies in heating, cooling, windows, lighting and appliances, and tackling large-scale problems such as building level electricity, thermal storage and next-generation building management.
To take the example of building energy management, here’s what BEV has to say:
“Optimal building energy management approaches represent a significant opportunity for major emissions reductions through more efficient building operation. Through the development and deployment of next-generation sensors, controls, and energy management systems into new construction and retrofit applications. Although these technologies and systems exist today and are improving rapidly, they must become dramatically more affordable in order to be adopted at scale.”
Check out these additional relevant technical quests for energy managers:
- High-Efficiency, Non-HFC Cooling & Refrigeration
- High-Efficiency Space/Water Heating
- Building-Level Electricity And Thermal Storage
- High-Efficiency Envelope: Windows And Insulation
- High Efficiency Lighting
- High-Efficiency Appliances And Plug-Loads
- Technology-Enabled Design Of Efficient Buildings And Communities
How can I access funds for my energy breakthrough?
Investment Criteria
According to the official BEV website, your innovation must meet four criteria in order to get the goods:
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- Climate impact – The key figure to remember here is half a gigaton – BEV will invest in technologies that have the potential to reduce greenhouse gas emissions by at least 0.5 GtCO2. (N.B. A gigaton of carbon dioxide equivalent (GtCO2eq) is a unit used by the UN climate change panel, IPCC, to measure the effect of a technology or process on global warming.)
- Other investments – Has your company or energy efficiency startup already attracted capital from other sources? Then it has a better chance of getting funding from BEV. If you are just getting started with your energy project, you are better off looking for seed money here.
- Scientific possibility – Is your energy breakthrough still in the idea stage? No worries. Just make sure there is an existing scientific proof of concept – in other words, if you can actually show how your work can be “meaningfully advanced” – you have a chance to make the BEV cut. Not quite there yet, or need extra cash to make that proof of concept a reality? Here are some energy-related funding sources for you to check.
- Filling the gaps – BEV is trying to fill the “uncertainty” gap that plagues the world of energy innovation. As Gates himself remarked, “People think you can just put $50 million in and wait two years and then you know what you got. In this energy space, that’s not true at all.” With this in mind, BEV is apparently “open-minded” to “anything that leads to cheap, clean, reliable energy“ – as long as it meets the 3 criteria above, of course!
To sum up, what we know so far… isn’t much
Although the Board of Directors already held their first meeting this weekend at the Four Seasons in Seattle, the Breakthrough Energy Venture fund’s management team has yet to be recruited. That process is expected to finish within the next 3 months, according to Gates.
What’s the holdup?
It’s not unreasonable to conjecture that Gates & co. might be waiting to see how the new administration plays out (surprising no one, Trump decided to double down on doubting the reality of climate change on the same day as Gates’ BEV announcement).
In the meantime…
Now that you know all about the Breakthrough Energy Venture fund and what it means for energy managers, let’s agree to keep a collective eye on it to learn more about exactly how this capital will be meted out. For now, nobody knows! In the meantime, here’s a guide to energy project finance for money that’s far easier to get your hands on while waiting for those large-scale, long-term private investments like BEV.
After all, take it from Mr. Gates himself, who knows a thing or two about money – governments are still the only ones with the resources (and risk protection) to invest in fundamental research for breakthrough advances that can carry the risk involved. So we put together this handy little guide to how to benefit from those public investment funds:
