By Ryan Kushner
I was fortunate enough to be in Paris for COP21. As many others have reported it felt, and was, historic. The two-week super-conference started off with the largest gathering of heads of state ever, and concluded with a global agreement that effectively framed the end of the fossil fuel era – quite the bookends for what is now known as the Paris Agreement. The agreement is a big win for innovation in energy, with push force coming from the policy side with a drive to 100% renewables, and pull force coming from a variety of new sources of funding.
New, and Very Large, Funds:
In addition to governments, businesses showed up in a big way at the talks, seemingly feeling the dual forces of avoiding risk and seizing opportunity. There are almost too many funds and commitments to mention, but here are three of the most notable ones:
Mission Innovation – $20 billion committed by 21 governments (including the US, Britain, Australia, Germany, China and Brazil) to cleantech R&D over five years. This doubles the current amount of public money now invested.
Breakthrough Energy Coalition – hard numbers are elusive, but this alliance of billionaires (including Gates, Zuckerberg, Branson, Bezos, Benioff… the list goes on and on) has committed to addressing the Valley Of Death and other classic cleantech startup stumbling blocks, which is summed up well on their site. These guys know traditional VC investment, and are trying to recognize and overcome the delta between apptech and cleantech with big, big dollars. They say they will, “take a flexible approach to early stage, providing seed, angel and Series A investments, with the expectation that once these investments are de-risked, traditional commercial capital will invest in the later stages.”
Portfolio Decarbonization Coalition – $600 billion in assets under management, including two of the world’s largest institutional investors, Allianz and ABP, committed to “mobilizing a critical mass of institutional investors committed to gradually decarbonizing their portfolios.”
The Baked-in Economics Of Cleantech:
The official language from the Paris Agreement can be found here – it’s pretty heady and hard to decipher, but it declares that, in effect, we will be at net zero emissions around 2050. While the agreement is non-binding, the real power of the COP is that it sends a massive, global market signal about where countries, companies and philanthropists will be directing money and policy.
As big and historic as the Paris Agreement is, however, to some degree it’s simply wind at the back of the basic, baked-in economics behind cleantech.
“Electricity from renewable sources including hydropower, solar, wind and others will replace coal as the largest source of electricity shortly after 2030. That’s thanks to both future global investment in clean energy power plants, and also a decline in coal power use in developed nations like the U.S. and in Europe. By 2040, there will be 13% more energy generated by clean power than by coal plants, the [IEA] report said. Clean energy already contributed to almost half of the world’s new power generation capacity added last year, the report found.” (from Fortune)
The world will be at 100% renewables, it’s just a matter of time and Paris just accelerated the timeline. (Cleantechnica provides a great roundup of papers on the subject.)
The Road To 100% Renewables Goes Through Hawaii:
Innovation doesn’t fall from the sky – it’s diligently pursued by entrepreneurs, investors, governments, businesses and universities and a mind-boggling system of funding, support and experimentation. If you want to know where the bleeding edge of this innovation is, look to the places that are economically and politically most incentivized to take on the challenge.
Hawaii is one of these places. Hawaii’s Governor in June 2015 signed into law a 100% renewable portfolio standard and Hawaii’s residents pay 3 to 4 times as more for energy as in the continental U.S., which has spurned a massive wave of solar installs (the most in the country) and associated challenges.
We’re on the front lines of turning these challenges into opportunities. Based in Honolulu, Energy Excelerator is a non-profit, mission-driven organization dedicated to speeding the transformation to a clean energy future. This is both a matter of mandate and opportunity – the challenges here are a harbinger of things to come for all grids, thus solutions that work here have the opportunity to scale the world around. Energy Excelerator presently has 43 companies trying to profitably solve the problems that get us to 100% and we award up to one million dollars for new companies looking accelerate.
All this being said, if you’re an entrepreneur or investor in cleantech, these are good days… and Energy Excelerator in Hawaii is a springboard into the future that Paris just cemented.