Invoice Gates on his high-risk local weather investments, and spurring innovation to save lots of the planet
Breakthrough Energy Ventures last month grabbed headlines with the news that the fund had raised another $1 billion to be invested in promising, scalable solutions for climate change.
At the same time — and with less attention — the Bill Gates-led initiative has been expanding into new programs that should help pull other levers that support clean tech innovation and adoption.
Breakthrough Energy Ventures, which started as a promise made at the UN climate talks in Paris, has evolved into an umbrella organization called Breakthrough Energy. It includes the VC fund as well as BE Catalyst, BE Fellows, BE Sciences, BE Policy and Advocacy, and BE Ventures Europe and BE Solutions Canada, which involve partnerships between governments, companies and investors.
In a recent GeekWire interview with Bill Gates about his upcoming book, “How to Avoid a Climate Disaster,” we discussed Breakthrough Energy’s progress and objectives.
The initiative aligns with concepts in the book, namely that to implement green technologies and reduce greenhouse gas emissions to zero by 2050, there needs to be innovation that drives down the price of the new tech, shrinking what Gates calls “green premiums.” That will require investments in research and development, government policies that support the technology, and the creation of reliable marketplaces to purchase the tech.
Listen to the full conversation in the podcast above, or subscribe to GeekWire in any podcast app, and continue reading for excerpts related to climate investments.
Gates on fundraising for climate investments: “I was talking to a lot of philanthropists today about ways that they could give either through Breakthrough or off on their own. I’m talking with Jeff Bezos, we’re gonna do some things together. He’ll obviously do a ton of stuff that’s on his own, which I applaud.
Breakthrough Energy is an umbrella. The first really big piece was that Ventures piece and part of the reason I’m being so ambitious now about these other pieces is that’s gone so well. I mean literally for the second fund, I didn’t have to make a single phone call to raise the fund. Enough people volunteered to join new and enough people stayed in that we’ll be well over $1 billion without any distraction to me.
So my time is spent with that science team talking through the companies, talking through the policy things that will help enable those companies, what kind of demonstration projects would the companies like to see us drive forward, and figuring out the right partnerships there.”
Gates explained the creation and structure of BE Ventures, which has an unusual “patient capital” approach that makes investments over a 20-year period, as opposed to the conventional goal of a return on investment within five years: “I’m willing to fund very high-risk stuff. I’ve got an amazing technical team at Breakthrough Energy Ventures. A lot of ideas come in, many of which don’t look that strong, but we found over 40 companies to finance in that first fund. That’s better than I expected.
The list of potential investments for the second fund that just got announced a few weeks ago, it’s very large and the quality of those looks to be every bit as good as what we have in the first fund.
I was very worried when I made the commitment in 2015 as part of the Paris talks where countries agreed to double their energy R&D budgets. My part of the deal was creating something that was not typical venture, but something attuned and 100% focused on climate change with the deep management team, a very deep science team, far far more than any venture firm ever would put into their science capabilities, and yet only focused on companies that can have a dramatic impact on climate change. It’s a very novel construct.”
How the success of BE Ventures led to BE Catalyst and BE Fellows, a program that sounds something like an incubator that funds promising researchers: “Partly because [Venture] has gone so well, that’s why I’m adding at an earlier stage a thing called Fellows where we finance, give gifts to people before they’re ready for seed funding.
And then this thing called Catalyst, which is about the demand for innovation — not just the supply of innovation — which will buy things that have high green premiums, but therefore create a market and start it down the learning curve [lowering the costs].
We hope to recreate for all these product areas what happened with wind and solar and lithium-ion batteries for passenger cars.”
How personal experiences illustrated the need for BE Catalyst, which funds commercial stage demonstration projects and brings together developers, buyers and financiers: “Catalyst comes out of the fact that as I was going to buy down all of my emissions [to offset his carbon footprint] — like buying green aviation fuel and buying direct air capture through people like Climeworks — there really is no catalytic funding. So I became the biggest customer of the biofuel supplier and I realized, boy, we are gonna need a lot more buyers in order to get this thing on the learning curve like Germany and Japan did for solar energy.
Catalyst version zero was my buying down my emissions, not just in a brute force way, but in a way that it was advancing technologies whose price can come down very dramatically.
How BE Catalyst can support government investments and policy: “[It’s] helping governments figure out which of their green hydrogen projects or green cement projects really are going to hit a dead end at a certain cost, and which ones really are on the path to being cheap enough to have low green premiums.
We have a depth of expertise that governments, in general, don’t see all the things going on in the rest of the world…. [Catalyst can help create] some sort of overall plan of all the different efforts that are bringing some money to have a seat at the table and accelerate those efforts.
Catalyst is new — we’ll get governments and companies on board. Someday we may say to consumers, ‘Hey are you willing to pay hundreds of dollars to something that gets rid of your emissions in this very catalytic way by getting products on to the learning curve.’ We’re not at the point where we’re doing that.”
PREVIOUSLY: In ‘How to Avoid a Climate Disaster,’ Bill Gates charts a difficult course that might just be doable
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