July Cleantech Roundup: Cheap Solar, Scooter Funding, fuel from manure, and More!
Clean Energy Trust’s cleantech roundup highlights interesting cleantech news and perspective, from policy changes to technology updates and investment news.
Cleantech News
The Los Angeles Department of Water and Power is in the process of procuring new solar plus storage for $38 per megawatt-hour, with solar under $20 on its own. These new record low bids are from 8 Minute Energy, which is known for extremely aggressive bids but is still an eye-popping figure ($38 per megawatt-hour for solar plus storage is cheaper than the new build costs for combined-cycle natural gas). Increasingly, new solar and wind development is being proposed with storage projects — because the storage is now cheap enough that it can make sense, and also because it helps protect the long term economics of a project (being able to offer a future commitment that the power will be available when needed is something power markets compensate asset owners for). Link
Scooter companies continue to receive large investments, with European companies Wind and Dott both raising at least $30 million in Series A rounds. If you were wondering, scooters are not going away. Both companies point to their scooter hardware as a competitive advantage. I’m skeptical on that front — while the first scooters deployed by scooter companies were ricketty, they’ve come a long way in a short time period. Certain hardware improvements could have a significant impact (namely swappable batteries) — and in general, durable hardware will be a key issue for profitability, but I think this will end up as a commodity-ish market. That doesn’t mean the companies themselves won’t be profitable, but I imagine it will be due to their network effects rather than their individualized scooter hardware tech. Link (Wind). Link (Dott)
Rob Day argues that cleantech venture investing is making a comeback, based on a recent report on cleantech investments from Cambridge Associates. Certainly, this is a good thing if it pans out, although this data may be a bit skewed some by the funds included in the analysis (which may include some private equity funds financing renewable energy deployments rather than new cleantech technologies and businesses). Either way, the story is better than it was a decade ago; Rob’s piece is worth a read: Link (Rob Day). Link (Cambridge Associates Report)
Ford and VW are collaborating to share electric vehicle and autonomous vehicle technology. It’s essentially too expensive for automakers to invest substantially in both EVs and AVs, so they are making tradeoffs and striking deals like this. Add to this the fact that AVs have been slower to come to market than many originally predicted, whereas EVs are a nearer-term growth opportunity so automakers are trying to prepare accordingly. Link
Rating agencies are working to be more transparent about how they incorporate climate risk in their analysis in response to pressure from investors (many coastal cities that are likely to be heavily impacted by climate change have excellent bond ratings) and concerns that state and local governments are unprepared for climate change. Moody’s, for example, recently bought a company that measures the physical risks of climate change. I expect mega growth for the Climate risk data/modeling/analysis/planning software tools niche. And, even as climate change is a partisan political issue right now, this acquisition is another data point on how capital markets and the private sector are moving to plan for the impacts of climate change, regardless of government intervention. Link
Global clean energy investment sunk to its lowest level since 2013 in the first half of 2019, decreasing 39% from the previous 6-month period. China, which accounts for the largest single market for clean energy investment, was a major driver of the decreased investment in the sector. One small bright spot — while investment in utility-scale generation projects was down 24%, small-scale solar systems (under 1MW) were actually up 32% in the first half of the year globally.
AMP Americas recently raised $75 million in order to open new facilities in the Midwest. The Chicago based business turns cow manure into renewable natural gas. This gas is then used in trucks that run on compressed natural gas, and ends up being cheaper and more environmentally friendly than diesel —a great example of a business that solves a real problem (or more than one) — utilizing a waste product farms need to dispose of as a feedstock to produce fuel. Link
Ohio passed some really bad energy legislation. While there are many reasons to support existing nuclear plants, as this bill ostensibly does, the bill also guts the energy efficiency standard for the state, which saves consumers money (First Energy, who is receiving the lions share of bailout funds from the bill and spent $50 million on its passage, has a long history of opposing energy efficiency programs). It is interesting that such an ugly bill was passed amidst a lot of other forward-looking energy legislation in other states; I expect this legislation will become the textbook example for ‘what not to do’ when passing state energy legislation. Link
“Transition Bonds” help polluting companies make investments to become more sustainable over time. The point here would be for a company in a carbon-intensive industry raise a bond specifically for increasing their sustainability since they aren’t able to float “green bonds” today — will be interesting to see if this catches on and whether it is utilized effectively or abused. Link
Environmental, Social, and Governance (“ESG” — aka “impact”) money market funds grew 15% in the first half of 2019. Link
Fun Video
Here’s an explainer video from NREL on Perovskite Solar Cells. Link
Not Cleantech
Mary Meeker’s 2019 Internet Trends Report: There are a bunch of summaries of the report floating around the web, but I recommend going to the source and flipping through the (very dense) deck — I guarantee you will see data in there that will make you say “WOW.” Link
