The goal of Breakthrough Energy is to make sure that everyone on the planet can enjoy a good standard of living, including basic electricity, healthy food, comfortable buildings, and convenient transportation, without contributing to climate change. Our strategy links cutting-edge, government-funded research to patient, risk-tolerant capital so that more clean energy innovations get to market faster.
The Breakthrough Energy Coalition created Breakthrough Energy Ventures, an investor-led fund, to build the new, cutting-edge companies that will deliver on that promise.
Like the Coalition, the Fund brings together individuals with the capital, the commitment, and the relationships to navigate the exceptionally complex process of developing and deploying breakthrough energy technologies. Our goal is to generate a financial return on our investments, each of which will have the potential of significantly reducing greenhouse gas emissions. We know that doing so requires creativity and flexibility, and we are eager to operate in novel ways to help pioneer energy solutions for the future.
Our first investing principle is to leverage innovation as broadly as possible. We don’t limit ourselves to early- or late-stage companies; to small, medium, or large enterprises; or to particular geographies or technologies.
One of the biggest challenges to investing in solutions to climate change is scale: things like agriculture, housing, and transportation that emit greenhouse gases operate at scales vastly larger than other human activities. As a result, fully deploying new technologies will take decades, not years. Given this timeline, it is critical not just to respond to today’s circumstances but also to anticipate tomorrow’s urgent needs.
After careful analysis of the energy-related trends shaping our world and consideration of the Fund’s core criteria for investment, we have identified five areas of focus to guide our initial strategy.
Over the past 10 years, the cost of wind and solar power has plummeted, providing some of the least expensive power in world history. The challenge is that wind and solar power are intermittent; they don’t work when the wind isn’t blowing or the sun isn’t shining. What opportunities does the ultra-cheap availability of these resources offer?
The rate of increase of the middle class, in absolute numbers, is approaching an all-time high. This will lead to significant increases in consumption on several fronts. There is a direct correlation between per capita GDP and per capita energy use. This pattern is clearly visible in satellite images of countries at night: the richer an area, the brighter it blazes. There is also a strong relationship between income and diet. As wealth increases, so does the consumption of calories and meat. The global cattle industry is a leading producer of greenhouse gases. If cows were a country, they would be the world’s third largest emitters. How can we help vast numbers of people lead middle-class lifestyles without changing the climate?
More than 200,000 people in the world move to cities every single day. As the middle class grows, this trend will accelerate, and the demand for power will accelerate with it. Just a decade ago, more people lived in rural than in urban areas. In 30 years, however, 7 in 10 people on the planet will live in cities. The changes required in the built environment will be massive. How can we build future mega cities without pouring greenhouse gases into the atmosphere?
Continually expanding network capabilities present an enormous opportunity to use energy more efficiently. A system of self-driving vehicles, for example, will be able to move cars around in ways that are more efficient and use less energy than today’s transportation systems. A building that knows what temperature it is outside can adjust its energy consumption accordingly. What other opportunities for efficiency and reducing emissions does an increasingly sophisticated network create?
For decades, the energy industry has been worried that the world will run out of fossil fuels. Given current projections, however, the energy sources that create climate change today are likely to stay available and inexpensive. The market will continue to favor fossil energy until clean energy is cheaper. What will it take to make clean energy as affordable?
Due to the massive scale of human energy consumption, progress in small increments isn’t enough. We will only invest in technologies with the potential to reduce at least half a gigaton of greenhouse gases every year, about 1 percent of projected 2050 global emissions.
We do not have the resources to solve the entire global energy challenge on our own. We will only invest in companies that we believe can ultimately attract additional investment investors.
Because the time to market in clean tech is so long, it is important to vet projects carefully at an early stage. We will only invest in projects that our technologists deem scientifically feasible at scale.
Clean tech is a somewhat neglected space, but certain aspects of it have attracted significant interest already. We will focus on areas and on enterprises to which we can add value through our patience, flexibility, and global network.
Based on our analysis of the key megatrends shaping the world in the next 50 years and our core criteria, we have identified five promising areas of focus to guide our initial investment strategy:
→ Grid-scale storage
→ Liquid fuel
→ Alternative building materials