March Cleantech Roundup: Electric Delivery Vehicles | Data Center Efficiency | Coronavirus Emission Impacts
Clean Energy Trust’s cleantech roundup highlights interesting cleantech news and perspective, across industry, technology, policy, and investing.
Note: Obviously, news of the novel coronavirus pandemic that has tragically killed tens of thousands and impacted the global economy looms large. This roundup focuses on the cleantech space and is not primarily focused on coronavirus news (although we’ll touch on it as it is relevant), but that should not in any way imply the crisis does not deserve our attention and efforts. With that caveat, here’s what I found most interesting in cleantech over the past month:
Electric delivery vehicles are all the rage. Electric Bus manufacturer Proterra is moving into providing electric vehicle components for delivery trucks for Daimler, who is also an investor in Proterra. Commercial fleets like delivery vehicles are going to be an exciting early adopter segment for EVs, where their high utilization and standardized delivery routes can be a good fit for the vehicles which have higher up-front costs but lower overall operating costs. This has prompted moves from many major players to make deals and investments in the space: Daimler and Proterra, UPS and Arrival, Amazon and Rivian, FedEx and Chanje. I would intuitively expect consolidation at some point in a new and crowded space down to a couple of major players; it will be interesting to see how the affiliations between delivery companies and these electric vehicle delivery startups may influence the broader market and potentially lead to a multitude of established brands. Link
Substantial potential for micro-mobility solutions to replace car trips. A study from the Chicago Council on Global Affairs found that scooters and micro-mobility solutions could replace up to half of car trips in Chicago (those less than 3 miles). This makes intuitive sense to me, although one caveat is that a bunch of those car trips are to buy supplies you can’t stick on a scooter. It is common for people to own cars in Chicago but only use them to buy groceries and to visit family or friends in the suburbs, neither of which a scooter is likely to be practical for. I don’t think that undercuts the point the study is making though — namely that a lot of trips by car could be supplanted by other means. Even the trips to the grocery store or home depot or the suburbs could be chipped away at, through delivery services, ride-hailing, and eventually, autonomous vehicles that can ferry supplies to your door (check out Starship Technologies and Nuro for potential glimpses into the future) — these all pair well with micro-mobility solutions.
Personal automobiles are effective all-in-one devices for many consumers (the single transportation solution for shopping, for going to work, for traveling around the country or around the block); as such, I think it is easy to get locked into the frame that there’s going to be one technology solution that will replace personal automobiles (i.e. a self-driving car that does everything your personal automobile does, but better). That’s probably not the right way to think about it. It is more likely than 10 or 15 solutions are going to end up replacing personal automobiles — a bike or scooter when it’s nice out, a weather-protected scooter/car hybrid when it’s not, public transit, ride-hailing, a Zoom conference instead of an in-person visit, Zipcar, delivery robots, autonomous mini shuttles, intercity rail, maybe an air taxi, etc… And the solutions reinforce one-another — as consumers have fewer and fewer edge cases where they need to own a vehicle, on the margin people will increasingly choose not to own one. Personal mobility in the future is very likely to be a multi-solution affair. Link
Data centers are more energy-efficient than commonly understood. Research from Northwestern’s Eric Masanet found that while computing output at data centers grew six times between 2010 and 2018 around the world, energy consumption only rose six percent. As we continue to rely more and more on cloud infrastructure, optimizing the efficiency of computing will continue to be a big opportunity space for innovation. Link
COVID 19 Related Cleantech News
Sequoia was quick to focus on COVID-19, blogging about how venture-backed companies should prepare for it. Link
BNEF’s Michael Leibriech published a wide-ranging and detailed analysis of COVID-19’s impact on the energy sector and emissions more broadly, which I found to be thoughtful. He concluded the piece with this summary:
COVID-19 is causing a massive drop in emissions this quarter, perhaps as much as 20%; after that, emissions will rebound, but remain significantly down until a vaccine enables a full recovery; even after that, they may well remain depressed for some years by an economy again hobbled by a colossal mountain of debt; and in the longer term, the stickiness of some of the new behavior, business models and technologies will certainly accelerate the transition to a low-carbon economy. Out of this terrible period, some good will come. Link
The Phase 3 Pandemic disaster relief bill (the CARES Act) did not include tax credit extension for wind and solar or climate provisions for bailed out airlines; neither did it include money to buy oil for the Strategic Petroleum Reserve. Look for both of these policy ideas to make a comeback in the debate over Phase 4 (or Phase 5) legislation. Given their different constituencies we’re likely to see both together at some point as a compromise, or neither at all (I’d guess both together, at some point). Link
New York Grid operators are living on-site in order to avoid infection risk and safeguard the ability to operate the system. Link
Policy News
Virginia passed a 100% clean energy mandate by 2045 at the beginning of the month. Within 3 weeks, Dominion Energy (the state’s primary utility) asked regulators to change its long-term plans — namely, they will no longer be considering building new natural gas plants. This is a great example of how directly long term policy impacts long-term capital allocation decisions — even if new clean energy standards will not have a significant impact on the day-by-day energy mix for years or decades, they heavily influence it indirectly. Link
The Grain Belt Express Transmission line was re-affirmed as legal by the Missouri Supreme Court. It’s been an epic NIMBY battle and is still not quite over because the Missouri legislature keeps flirting with passing a law specifically to block this infrastructure project. It is a reminder of the power of NIMBY (Not In My Back Yard) opposition. This project provides useful infrastructure that is sited almost exclusively in low-population areas and enables Missourians to acquire cheaper power, but there are a handful of landowners who will go to the end of the earth to try and stop it. Link
Oregon was going to pass a cap-and-trade bill, but Republican legislators fled the Capital. Oregon and a few other states require a majority of elected representatives in person to produce a quorum, so recently legislators have leveraged this procedural hurdle to disappear when there is legislation that has the votes to pass otherwise. I’m guessing this type of behavior isn’t going to age well but handicaps the state’s ability to pass legislation until they can get this rule changed. Link
Other News
As the Federal Government has moved to send money directly to citizens, challenges with implementation have brought renewed focus to digital currency and digital financial infrastructure. Robert Hackett discussed this recently in Fortune’s weekly newsletter on financial technology and cryptocurrency. Link
Munich based Lilium raises $240 million in an internal round to continue the development of electric air taxis. Link
Multiple states passed legislation this year to support new electric vehicle charging infrastructure planning and investment. Link
