Our work in Energy
Accelerating the net-zero carbon transition.
A working thesis as we seek to understand and build in this area.
Areas for venture creation:
Climate Change has already happened
The global climate has already risen in temperature by close to 1ºC so far: even if we stopped all economic activity, it’s likely that temperatures would continue to rise. We’ve only made minor progress to transition away from carbon-emitting sources and even climate champions such as Germany have decided to continue burning coal until 2038 to protect the jobs of miners.
As a result, the key role for scientific venture to play will be investing in companies that will help society limit the impact of climate change, and adapt to the harsher climate that has the potential to markedly disrupt the global socioeconomic system.
Attacking from all fronts
One of the overriding issues surrounding how we produce and consume energy is the dogmatism between stakeholders at every level over which technology should “win”. However, it’s our position that there is no panacea technology that will fix everything—rather, the transition will be from a mix of hydrocarbons to a mix of renewables and low-carbon fuels. The true winners in this space will be the companies that enable the transition across various stages of the value chain.
We’ve grouped these across four themes that each tackle a key component of the emerging climate crisis.
Decarbonisation of the world’s energy supply is essential. From the coal 🙁 being burned for power and process heat, the natural gas heating our hot water to almost every form of transport.
Electrochemical storage is a key enabling technology to replace internal combustion engines with electric motors and improve flexibility of the grid. However, the improvement in cell performance driven by electronic devices is slow, due in part to a lack of meaningful breakthroughs in battery technology.
Portfolio company Holy Grail are working to debottleneck materials science research with the vision to produce batteries that can compete with hydrocarbons on every performance metric. They’ll also produce their own batteries so that they’re readily added into the global supply chain, avoiding the mistakes of past technology-push approaches in battery tech.
One of the biggest impacts in reducing carbon emissions in the past few decades has been the simple act of switching from incandescent to LED lighting. Analogously, improving building insulation is a key driver in increasing energy efficiency, but selecting the wrong materials can result in lower development yields at best, and tragedy at worst.
Portfolio company Thermulon have developed a novel process to produce high-performance insulation that’s carbon-negative and incombustible.
Heat is essential to many of the processes we use to produce power, synthesise industrial products and even baking bread. The process is inherently inefficient, with 51% of the input energy lost. Waste heat recovery offers the opportunity to use that wasted energy for other applications, but the current state of the art requires large capital investment and requires high-grade heat.
Eltiera has developed a way of transforming that waste heat into electricity, with no moving parts and a compact design. Their advantage comes from designing a product that doesn’t require high-risk materials science R&D, but instead on an application that can readily be manufactured.
This is a politically-charged issue, but with the damage already done to the composition of the Earth’s atmosphere, an engineered effort to repair it is necessary. Many have made the argument that it isn’t the place of humankind to engage in engineering the Earth’s atmosphere—but we already have been for centuries, albeit unintentionally.
Concerns have also been raised that repairing the climate will permit the worst polluters to continue doing so, especially in the context of a carbon tax. Whilst this may have been a valid concern in decades past, global inaction has made it imperative to take all available options as soon as possible, without dependency, and as a matter of existential importance. But perhaps more importantly, if we can find ways of making environmental mitigation a scalable, viral and above all profitable activity, we might lessen the immediate burden placed on altruistic behaviour change.
Currently the only approach that has found political and commercial acceptance is direct air capture of CO2. Despite significant funding into DAC, producing synthetic fuels in this way is yet to be proven to be scalable and is only profitable where it is used to enhance oil recovery. Let that sink in – the only profitable implementation of carbon capture leads to greater carbon output.
Our position is that repairing the climate represents an arbitrage opportunity which can be exploited through traditional industries such as agriculture and energy. Creating or repairing ecosystems in a self-replicating or extremely scalable way can be the basis of turning low-value assets into high value assets. Barren stretches of land, sky and sea become fertile, high-yielding production sites, in many cases subsidised by governments eager to increase growth, create a national competitive advantage, improve wellbeing and to hit carbon targets simultaneously: the macroeconomic holy grail.
The climate change that has already occurred threatens global populations balancing mechanisms that have meant that areas are safe from flooding, fires and other natural phenomena are being lost.
Similar to how the Thames Barrier was installed to prevent the risk of tidal surges flooding London, technology will be vital to ensure that humanity can adapt to a more hostile world.
A Sustainable Future
With the exception of a mass depopulation event or economic retreat, we believe that searching for opportunities within these lenses represents the best possible chance of controlling the risk of human extinction due to climate change.