June 2021 Cleantech Roundup: SaaS and Carbon Removal | Infrastructure Week | EV Charging Interoperability
This month, we’re talking about how the financial services industry is driving the carbon removal ecosystem forward, whether it is finally about to be infrastructure week, EV charging interoperability, and more!
I’ll Send a SaaS to the World
Bloomberg had a nice piece talking about how Stripe and Shopify are taking the lead when it comes to carbon negative solutions, building on Stripe’s recent announcement of their 2021 carbon removal company commitments. We’ve talked previously about Stripe’s efforts in this space: the company buys carbon offsets from permanent carbon removal companies, typically as the first commercial customer to do so, to help create market pull, buy down the cost of these solutions, and understand which ones are able to get cheaper as they scale up. And, if that wasn’t enough, both companies are sharing their carbon removal playbooks, to make it easier for others to follow them (here’s Stripe’s; here’s Shopify’s).
It’s SaaS to the rescue! Without comprehensive policy supporting carbon removal solutions, these companies are performing a vital service — I wouldn’t have guessed that one of the most impactful climate companies in 2021 would be Stripe!
In the process, the companies are also turning carbon offsets into a financial service offering (a Stripe customer can choose to use some of their revenues to contribute to the offset efforts with a couple of clicks). There are a number of companies nibbling around the offsets space; I think these integrated offerings are likely to have a competitive advantage (in comparison to an offset solution an individual or business needs to reach out to separately to begin purchasing offsets). In similar news, the brokerage Nasdaq acquired a carbon removal marketplace, presumably to integrate into the company’s corporate solutions set.
Is It Infrastructure Week Yet?
Washington is creeping towards a bipartisan infrastructure bill. In the process, it will lose many climate and clean energy provisions, although some are likely to re-emerge in a separate bill that Democrats will push through via reconciliation (which avoids the filibuster).
This has the potential to be fantastic for a lot of different folks: the stakeholders who pushed the virtues of bipartisanship can show they accomplished something, and at the same time it changes what can move through reconciliation since the senators who pushed for the bipartisan deal have a vested interest in both pieces coming to fruition (some stakeholders indicated they would not support the compromise without the reconciliation bill happening, too). That reconciliation bill is yet to be drafted, but one can assume it will expand incentives for renewables (which enjoy broad support) and carbon capture (which is likely to be a priority for West Virginia Senator Manchin, a pivotal vote); larger and more flexible electric vehicle tax credits are likely as well. Link
And on a note of personal hubris, I must say that one of my predictions at the beginning of the year, “An Era of Surprisingly Collaborative Policymaking in DC,” seems to be playing out pretty well. We’re on track to have bipartisan bills on infrastructure and domestic manufacturing/R&D and it’s only June!
Vehicle Charging Infrastructure Marches Towards Interoperability
Charging station providers Greenlots, ChargePoint, EV Connect, and FLO have agreed to enable roaming across their systems, allowing customers to use whatever billing account and mobile app they already have.
As we’ve noted in the past, non-Tesla charging networks are likely going to be required to be interoperable in the future anyways (driven initially by eventual regulations in California); this integration makes sense since it can help drive the adoption and use of the charging infrastructure (none of them benefit from a highly fractured ecosystem). Link
Who Makes What?
Interesting chart of scooter hardware: Who uses which model, and who makes them. One point of differentiation is by continent: the big US players (Bird and Lime) started off buying scooters from OEMs, but are now iterating on their own hardware (with integrated batteries), whereas the biggest European scooter companies (Voi, Dott, Tier) all buy their hardware from OEMs, and all have swappable batteries. The question may be whether hardware innovation and customization matter more, or whether scale and battery swapping win out: either way, both are likely to be focused on reducing operational costs. Link
Hot Investment Tip
Heliogen announced that they are raising $108 million over two rounds to support the demonstration of its concentrated solar approach for process heat and power. A decade ago, there were a number of concentrated solar plays, before it was clear how cheap solar PV could get. Today, there is renewed interest in concentrated solar, because it has potential applications in decarbonizing industrial processes.
Concentrated solar thermal, unlike photovoltaic solar, involves using mirrors to focus the solar energy to heat up a working fluid to very, very high temperatures (like >1,500 degrees Fahrenheit). This can be leveraged for high temperature industrial processes, or to store energy when the sun is not shining. One can imagine a world where solar PV and concentrated solar thermal are both widely deployed, but for very different use cases (sort of like how nail clippers and garden shears are both types of scissors). Link
The Cost of Carbon Policies
The Energy Policy Institute at the University of Chicago (EPIC) is out with a nice chart estimating the costs of climate policy in terms of abatement of CO2. Of course, some of the policies have multiple goals, although the point is to show the cost-effectiveness of different policies.
This chart is, in a nutshell, why every credible economist prefers a carbon tax to a mandate and/or subsidy regime: the subsidies are always going to be more expensive, since while it is fixed, the entities that pay a carbon tax will naturally gravitate to whatever is the cheapest way to fulfill their obligations.
Also, a shout out to behavioral energy efficiency, the only solution on the list that is always cheaper than doing nothing. One of the main players in this space is Clean Energy Trust portfolio company Agentis (for commercial customers) while Oracle (formerly Opower) is the lead firm in residential behavioral energy efficiency. Link
New Midwest Solar Manufacturing
First Solar will be doubling its US manufacturing capacity, building a new factory in Toledo, Ohio (where the company was founded). It’ll be the third First Solar factory in the City of Glass, and is expected to be the largest fully integrated solar manufacturing complex outside of China.
Presumably, the company is responding to growing domestic solar demand, although it will also benefit from a tailwind of the renewed US emphasis on domestic manufacturing (and theoretically the solar tariffs, although those are not likely to play a significant role by the time the factory is in operation). Link
Other News
I was surprised by this BloombergNEF analysis that indicated carbon neutral primary aluminum is cheaper than business as usual today (although recycled aluminum still has a cost premium to be carbon neutral). Link
Charging and fleet management service company Electriphi was acquired by Ford. This follows NextEra’s acquisition of eIQ Mobility last year (which operates in a similar space). Link
Li-Cycle, the largest lithium-ion battery recycler in North America, announced a partnership with Clean Energy Trust portfolio company Renewance to improve end-of-life energy storage system reuse and recycling. Link
We’ve discussed the forced labor and human rights issues tied to silicon manufacturers in China’s Xinjiang province on the roundup over the last couple of months. Recently, the Biden administration moved to ban imports of solar panel materials from one such company — Hoshine Silicon Industry. Link
Next-gen nuclear (advanced modular reactor) company Terrapower will be siting its demonstration reactor at a retiring coal plant in Wyoming. Terrapower is one of two companies developing demonstration plants supported by the Department of Energy, with a goal of having a project up and running by 2027. Link
Seattle is testing a bunch of different elements of zero-emissions last mile delivery, with cargo bikes, standardized shipping pallets from Brightdrop (GM’s electrified commercial delivery arm), and Reef — which on paper manages parking garages, but is positioning itself as a last-mile swiss army knife, with parcel pick up locations, ghost kitchens, delivery services, and in the future, flying taxi landing locations (on the aforementioned parking garages). Link
The Ford F150 lightning, which was the focus of the roundup last month, now has over 100K pre-orders. Link
Climate change may position Michigan as the best place to grow wine in the United States. Cheers to the Midwest! Link
