The science is settled. Human activities that emit greenhouse gasses (GHG) are warming the planet and causing devastating climate change. Current GHG emissions levels must be halved by 2030 and net-zero GHG emissions must be reached by 2050 to contain global warming at a sub-catastrophic level. As fossil fuel-based energy production is a leading cause of GHG emissions, clean energy technologies play a vital role in a sustainable future for the planet.
The cost of solar and wind energy has fallen considerably over the past decade and no longer yields a significant cost disadvantage compared to fossil fuels. Next-generation renewable technologies such as waste-to-energy, advanced biofuels, fusion energy, geothermal, wave, and tidal, etc. are still at a nascent stage but can be expected to follow similar declining cost principles as they scale. Next-generation advancements in energy storage is also vital in matching the intermittent supply of renewable energy with inflexible demand. As these new technologies scale, carbon capture technologies and energy optimization solutions could still play an important role in reducing GHG emissions from traditional energy production over the next decade.
The Covid-19 pandemic has made consumers more open to shifting behavior toward environmental protection.
In a April 2020 survey, 48% of respondents said that the pandemic had made them more concerned about the environment.
Environmental activists are urging governments to pass Covid-19 stimulus packages that invest in a ”Green Recovery”.
Several ClimateTech-Energy startups adapted to the Covid-19 pandemic by offering new services to customers.
Bloom Energy: Started offering healthcare facilities a new temporary power solution with its proprietary solid oxide fuel cell technology.
LanzaTech: Produced hand sanitizers and disinfectants from ethanol byproducts of its biorefinery operations.
BBOXX: Offered discounts to support underprivileged households.
Innowatts: Claimed that its artificial intelligence (AI)-based grid management solution was able to accurately predict large fluctuations in electricity demand during lockdowns.
At the same time, some ClimateTech-Energy startups experienced business hardships due to the pandemic.
NRG’s Petra Nova carbon capture and storage (CCS) facility and Hydroster’s proposed compressed air renewable energy storage facility in Australia were shut down as the pandemic rendered them uneconomical.
Oxford PV’s plans to commence production at its new facility were postponed by one year due to Covid-19-led shipping delays.
The ClimateTech-Energy sector is dominated by the Next-Generation Renewable Energy and Energy Storage and Transmission segments; both contain the highest number of startups in the industry and have also received the most funding out of the top 60 highest funded startups in the sector (as of February 2021).
Overall, there are comparable numbers of startups at the pre-seed and seed stages and the early and growth stages. However, a majority of the startups in the Next-Generation Renewable Energy and Energy Storage and Transmission segments are in the pre-seed and seed stages, whereas, most of the startups in the Carbon Capture, Utilization, and Storage (CCUS) and Energy Optimization and Management Software segments are in the early and growth stages.
The capital intensive nature of the industry has led many ClimateTech-Energy startups to raise significant funding at very early stages of their operations. The top 60 highest-funded ClimateTech-Energy startups raised an average of USD 219 million in combined pre-seed and seed funding as of February 2021.
This appetite for cash has prompted many ClimateTech-Energy startups to seek public funds fairly quickly, sometimes even while the business is still at conceptual stages. As of February 2021, nine of the 60 highest-funded startups in the industry were publicly listed—mostly through unconventional methods such as reverse mergers and over-the-counter (OTC) listings.
Pond Technologies focuses on converting carbon dioxide emissions into algae-based commercial products. The company’s technology converts carbon dioxide into oxygen, facilitating various algae strains (such as chlorella, spirulina, astaxanthin, etc.) and algae-based products, such as nutraceuticals, animal feeds, natural fertilizers, and biofuels.
The Canadian company also offers a modularized algae-growing platform made of large vessels known as bioreactors, which can be deployed at industrial facilities to capture and recycle carbon dioxide emissions. As of April 2021, a bioreactor was priced at USD 1.9 million per unit, and the company was quoting five units to be sold in the UK, US, EU, and Asia.
Pond Technologies operates under three segments: 1) nutraceuticals, 2) technology services, and 3) oil and gas production. As of December 2020, the nutraceuticals segment was the company’s sole source of revenue. The modularized carbon capture solution for industrial facilities falls under the technology services segment (which did not generate any revenue in 2020). The company generated total revenues of USD 4.8 million in 2020 (USD 3.5 million in 2018), although it has yet to make a profit, running an operating loss of around USD 3.3 million in 2020.
In February 2018, Pond Technologies was listed on the TSX Venture Exchange, raising USD 8.7 million. The company’s most recent funding event raised USD 1 million in a post-IPO equity round in July 2020.
Carbon Capture, Utilization, and Storage (CCUS):
Renewables: NextGen Solar, Wind, Hydro:
Renewables: NextGen Bioenergy:
Oil and gas and other fossil fuel energy companies are increasingly adopting ClimateTech to meet their sustainability commitments. While these initiatives are still mostly conventional renewable energy generation projects such as solar and wind, some companies, especially oil and gas supermajors, are also gradually exploring next-generation ClimateTech solutions such as carbon capture, utilization, and storage (CCUS) and advanced biofuel refining. In many cases, however, these initiatives are aimed at reducing in-house greenhouse gas emissions as opposed to the broader commercialization of the technology.
The electric vehicle (EV) batteries and energy optimization and management software segments are also home to a considerable amount of incumbent companies. Diversified electronics companies such as LG, Panasonic, and Samsung dominate the EV battery industry while Tesla and Volkswagen have announced plans to move battery production in-house.
Top smart meter companies such as Landis+Gyr and Itron complement their smart metering solutions with legacy energy optimization and management software. Diversified technology companies like General Electric and Cisco also provide similar solutions globally.
The Northern Endurance Partnership (NEP) is a pact between BP, Eni, Equinor, National Grid, Shell, and Total to develop offshore infrastructure to transport and store carbon dioxide emissions in two of the UK’s highest emitting industrial clusters, Teesside and Humber. BP leads the partnership and is expected to operate the sites once they are completed.