Bill Gates' Breakthrough Energy Ventures Announces Five Focus Areas At Paris Summit
At the One Planet Summit in Paris, Bill Gates outlined five investment areas for Breakthrough Energy Ventures, an investor-led fund for investment in emerging energy technologies. He announced the venture last year and it boasts an impressive roster of leading venture capitalists and technologists. The timing of Gates’ announcement is significant, when you consider the current administration’s efforts to undermine renewable energy sources and research in science and energy innovation. The current tax plan making its way through both Houses intends to cut research funding and tax credits available to users of renewable energy.
Predictably enough, energy storage is a key focus area for the fund. While lithium-ion will provide power at peak demand, the fund is also exploring alternate chemistries to store energy at other times. Specifically, the firm is looking at energy storage through “heat and compression”. Another area of interest for the venture is liquid fuels. Billionaire venture capitalist Vinod Khosla, who is a member of the fund, led the charge for biofuels at the start of this decade before his bet turned sour in 2014. This time around, his fund has cast a wider ambit and is looking to carbon capture in combination with a new technology called solar fuels (which uses solar energy to convert carbon to liquid fuels. Among other priorities for the firm are building out microgrids and mini-grids in Africa and India as a means of providing off-grid electricity sources, finding out a zero-carbon way to produce concrete and steel, and boosting prospects and use of geothermal energy.
Broadly, the focus areas tick all the right boxes for energy innovation. They incorporate a mix of ideas that are currently radical, such as production of liquid fuels, and easy-to-implement ideas, such as microgrids. In the latter example, the fund’s task has become relatively easier with supportive government regulation in their target markets.
But the key thing to remember are the timeframes involved in these bets. Unlike traditional venture investing, which generally look for returns in a short time period, BEV is invested in energy innovation for the long term. In an interview with the folks at LinkedIn, Gates said that the fund took its pointers from the previous wave of energy investing, which took place at the end of last decade and the beginning of the current one. “The answer (to whether standard venture investing models worked for energy startups) was that we felt we had to change the model to one that would last 20 years,” he said. According to him, the incentives for entrepreneurs would be on impact (as opposed to growing the market for their product and generating profits for investors). “We are not looking forward to making returns in our lifetime,” said Richard Branson, an investor in the fund.
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