Catalyst with Shayle Kann

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2023 climate tech venture investment trends Jan 11, 2024

Show notes

Venture and early-stage investment in climate tech in 2023 was down 30% from 2022, according to market intelligence firm Sightline Climate. But is that a bad thing?

In this episode, Shayle unpacks the findings of Sightline’s 2023 Climate Tech Investment Trends report with Kim Zou, co-founder and CEO of the firm, which also produces the popular CTVC newsletter. (Shayle is an adviser to Sightline, and Kim was also previously a partner at Energy Impact Partners where Shayle works.) Kim argues that smaller deal sizes suggest that the climate tech space is actually maturing.

The data focus on venture and early-stage capital, rather than non-equity financing, which actually expanded in 2023, another sign that climate tech finance is becoming more sophisticated.

Shayle and Kim also cover topics like:

Why food and land use fell out of the top three verticals (and why heavy industry took its place).
Major funding rounds, acquisitions, and bankruptcies in 2023.
The role of generalist investors moving into climate tech.
Zou’s predictions for investment trends in 2024.

Recommended Resources:

Latitude: Exclusive: Non-equity funding for climate tech is taking off
Latitude: Clean energy capital is getting pricier
Catalyst: Financing first-of-a-kind climate assets

Sign up for Latitude Media’s Frontier Forum on January 31, featuring Crux CEO Alfred Johnson, who will break down the budding market for clean energy tax credits. We’ll dissect current transactions and pricing, compare buyer and seller expectations, and look at where the market is headed in 2024.

Sign up for Latitude Media’s newsletter to get updates on the tech and business frontiers of the climate tech industry.

Catalyst is supported by Antenna Group. For 25 years, Antenna has partnered with leading clean-economy innovators to build their brands and accelerate business growth. If you’re a startup, investor, enterprise or innovation ecosystem that’s creating positive change, Antenna is ready to power your impact. Visit antennagroup.com to learn more.

Catalyst is brought to you by Atmos Financial. Atmos is revolutionizing finance by leveraging your deposits to exclusively fund decarbonization solutions, like residential solar and electrification. Market-leading savings rates, cash-back checking, and zero fees. Get an account in minutes at joinatmos.com.

Fixing the messy voluntary carbon market Jan 04, 2024

Show notes

The voluntary carbon market is a mess. Oil majors, big tech, and many other industries purchase voluntary credits hoping to offset their carbon emissions. But years of reporting have revealed major problems in the industry, from worthless credits to outright fraud. Amid allegations that many of its credits might actually worsen global warming, the CEO of the largest issuer of credits, Verra, resigned last year.

And so perhaps it’s no surprise that the market for traditional offsets like renewable energy credits and avoidance credits shrank in recent years. Yet the market for a newer type of credit, carbon removal, is actually growing.

So what’s behind this bifurcation in the market? And are the voluntary carbon markets fixable?

In this episode, Shayle talks to Ryan Orbuch, partner at Lowercarbon Capital. He leads the firm’s carbon removal work. Ryan argues the market is fixable with major reforms, like overhauling incentives and ditching the idea that the voluntary carbon market can offset buyers’ emissions with as many cheap credits as needed.

Shayle and Ryan cover topics like:

The bad incentives underlying the problems with the current market.
The role of credit-rating agencies in the market.
Ryan’s ideas for designing a better market from scratch, including ex-post payments, modular protocols, and a feedback loop for improving supplier methods.
The potential challenges with these approaches, like financing prior to payment and uncertainty in credit delivery as protocols change.
Companies that are pioneering some of these approaches, like Isometric’s new protocol for the bio-oil geological storage technique used by Charm Industrial.

Recommended Resources:

The New Yorker: The Great Cash-for-Carbon Hustle
UC Berkeley: Reducing Emissions from Deforestation and Forest Degradation (REDD+) Carbon Crediting
CDR.fyi
Isometric: Aligning incentives

Sign up for Latitude Media’s newsletter to get updates on the tech and business frontiers of the climatetech industry.

Financing first-of-a-kind climate assets Dec 21, 2023

Show notes

There’s a hole in the finance world. Fighting climate change means scaling up lots of new technologies, but financing those first-of-a-kind (FOAK) projects is incredibly difficult. New technologies involving things like sustainable aviation fuel, geothermal, and direct air capture can take a decade or more to scale up. But venture capital is too expensive for FOAK projects, while infrastructure finance is too risk-averse.

So what solutions could solve the FOAK financing problem?

In this episode, Shayle talks to longtime climatetech investor David Yeh. David has spent over 20 years in climatetech, including in roles at the Obama White House, Generation Investment Management, and the World Bank.

They cover topics like:

Different approaches to FOAK, like off-balance sheet, structured finance, catalytic capital, and government programs.
Examples of companies that solved the FOAK problem
Code switching between venture capitalists and infrastructure financiers. (Try using the word “innovative” with traditional bankers).
David’s checklist for FOAK entrepreneurs.

Recommended Resources:

Bloomberg: Grant From Bill Gates-led Fund Will Make Green Jet Fuel As Cheap As Fossil Fuels
CTVC: What the FOAK?

If you want more news and analysis like this in your inbox, subscribe to Latitude Media's newsletter and Canary Media's newsletter.

Catalyst is a co-production of Latitude Media and Canary Media.

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What do you do with a 100-hour battery? Dec 14, 2023

Show notes

It’s time to get specific. In the power industry “long-duration energy storage” could mean anything from 4 to 10 to 100 hours of energy. But Form Energy’s Mateo Jaramillo argues that batteries in the ballpark of 100 hours hit a sweet spot, and that sweet spot deserves its own term: multi-day storage.

In the 15 minute to 12 hour range, lithium-ion batteries shine, effectively displacing natural gas peaker plants that run less than 5% of the year. But they don’t displace higher-capacity generation. Nor do they meet the needs of the grid during significant weather events, like heat domes, Nor'easters and freak Texas winter storms that can last upwards of 75 hours. And for that, Mateo says we need multi-day storage.

Form Energy’s iron-air batteries made headlines back in 2021 for promising to deliver tens of hours of storage at a low cost per kilowatt hour. (Energy Impact Partners, where Shayle is a partner, invests in Form Energy.) So what role could multi-day storage play on the grid?

In this episode, Shayle talks to Mateo about real-world examples from Form’s experience with utilities like Xcel and Georgia Power. They also cover topics like:

The strengths and limitations of lithium-ion batteries on the grid today, and why Mateo thinks lithium-ion is here to stay.
The competitive landscape for mulit-day storage, including iron-air, carbon capture and storage, hydrogen, and transmission.
What role multi-day storage plays for utilities beyond balancing renewables, such as meeting load growth and resilience goals.
Plus: Shayle’s idea for bitcoin mining on a barge.

Recommended Resources:

Canary Media: Form Energy closes its biggest deal yet for long-duration energy storage
Carbon Copy: A groundbreaking long-duration battery nears industrial scale
Wall Street Journal: Old West Virginia Steel Mill Becomes a Green-Energy Powerhouse

If you want more news and analysis like this in your inbox, subscribe to Latitude Media's newsletter and Canary Media's newsletter.

Catalyst is a co-production of Latitude Media and Canary Media.

Update: What the new Treasury rules mean for EV supply chains Dec 07, 2023

Show notes

The U.S. Treasury proposed guidance last Friday that would significantly restrict what battery parts and materials can qualify for incentives in the Inflation Reduction Act. The rules label China and several other countries as “foreign entities of concern.” These rules will prevent materials and parts sourced from those countries, starting in the next few years, from counting toward the IRA’s electric vehicle tax credits.

The new rules are meant to push battery companies to develop supply chains outside the control of Chinese officials and companies, which control much of the world’s battery industry. They come following a first batch of guidance released this year by the Treasury, which the IRA tasked with developing specific rules for implementing the law.

So what does the new guidance mean for battery supply chains?

This episode features two conversations with Sam Jaffe, senior director of business development at Addionics. The first is a short update on last week’s proposed rules. The second is a longer conversation Shayle had with Sam in April about the first batch of rules, which focused on which battery ingredients count as “constituent materials” under the IRA. Both discussions are relevant to understanding what’s happening now.

In this update they cover topics like:

Defining what counts as a material controlled by a foreign entity of concern, such as percentage ownership in a joint venture
Key loopholes in law, such as licensing arrangements and small percentages of low-value materials, like cathode binder and electrolyte salts
The parts of the supply chain most significantly affected by the rule, such as Chinese graphite, Indonesian nickel, and Congolese cobalt
Upcoming deadlines in 2025 and 2026, and whether onshored or friend-shored facilities can begin supplying materials before then

Recommended Resources:

Canary: The US EV industry now faces a choice: Tax credits or Chinese batteries
Heatmap: It’s Suddenly a Mystery Which EVs Will Qualify for a Tax Credit in 2024

EV charging on both sides of the pond Nov 30, 2023

Show notes

For those of us in the U.S., Europe's strong electric vehicle market might offer a glimpse into the future of EV charging. In 2022 the electrification haven of Norway had a whopping 166 plugin-in electric vehicles per 1,000 residents. Germany had 20 per 1,000 residents and Europe’s largest fleet, based on reporting by Euronews. That’s far ahead of the U.S., which averaged 8.6 in 2022, according to Argonne National Laboratory.

So, it stands to reason that these countries must have insights into how to get all these vehicles charged. And Europe does indeed have a lot to teach the U.S. — but it turns out the lessons might actually go both ways.

In this episode, Shayle talks to Nick Woolley, CEO and co-founder of charging management company ev.energy, which operates in both the U.S. and Europe. (Shayle’s firm Energy Impact Partners is also an investor in ev.energy.)

They discuss topics like:

EV adoption rates and charging patterns by region
The fragmented European charging networks and Europe’s unique roaming programs that facilitate interoperability
The difference between customers who have off-street parking and their own charging infrastructure, and those who instead have to scavenge for charging
The pros and cons of Europe’s unbundled electricity markets, as compared with vertically integrated markets in the U.S.
Carrots, sticks, and compliance for managed charging, also known as V1G
The challenges of implementing vehicle-to-grid charging, or V2G

Recommended Resources:

Catalyst: Can the V2X dream become reality?
Catalyst: The journey to monetizing distributed energy resources

Sign up for Latitude Media’s Frontier Forum on January 29, featuring Crux CEO Alfred Johnson, who will break down the budding market for clean energy tax credits. We’ll dissect current transactions and pricing, compare buyer and seller expectations, and look at where the market is headed in 2024.

The cost of nuclear Nov 16, 2023

Show notes

Nuclear construction costs in the U.S. are some of the highest in the world. Recent estimates put it at more than $6,000 per kilowatt, as measured by overnight capital cost. But high costs are a problem for new small modular reactors (SMRs) too, killing what was going to be the country’s first small modular reactor before it got built.

On the other hand, South Korea has some of the lowest costs in the world. Estimated overnight capital costs for reactors in South Korea are closer to $2,200 per kilowatt. And then there are countries like China, France, and the United Arab Emirates that fall between those extremes.

So why the wide range in costs?

In this episode, Shayle talks to Dr. Jessica Lovering, co-founder and executive director at the Good Energy Collective, a non-profit that researches and promotes policies that support nuclear power. A former director of energy at the Breakthrough Institute, she also authored a comprehensive study of nuclear construction costs in 2016.

Shayle and Jessica talk about things like:

What goes into the cost of construction and South Korea’s secret sauce for low-cost nuclear reactors
Why Jessica thinks we should manufacture and regulate reactors like large aircraft
Driving down costs with modularity, small reactors, passive safety features, and more construction
Why changing regulations might be necessary, but not a silver bullet
Why the pro- and anti-nuclear camps talk past each other — and why Jessica says she’s somewhere in between

Recommended Resources:

Energy Policy: Historical construction costs of global nuclear power reactors
National Academy of Engineering: Chasing Cheap Nuclear: Economic Trade-Offs for Small Modular Reactors
Joule: Evaluating the Role of Unit Size in Learning-by-Doing of Energy Technologies
Science: Granular technologies to accelerate decarbonization
Canary: Future of small reactors at stake as NuScale deal flops

If you want more news and analysis like this in your inbox, subscribe to Latitude Media's newsletter and Canary Media's newsletter.

Catalyst is a co-production of Latitude Media and Canary Media.

Mailbag episode! Interest rates, carbon dioxide removal, load growth, and more Nov 09, 2023

Show notes

It’s about that time again. You sent in great questions for Shayle, and in this episode we’re tackling them with the help of Sarah Golden, vice president of energy at GreenBiz. Together Shayle and Sarah cover topics like:

Load growth and whether data-center demand is good or bad for decarbonization.
The crash in photovoltaic module prices and what it means for the solar industry.
The impact of interest rates on climatetech.
The challenges of siting carbon dioxide pipelines.
Why there’s no clear winning technology for carbon dioxide removal.
European energy companies acquiring U.S. companies.
Why Shayle is bullish on the macro grid, despite the slow pace of interconnection and transmission buildout.

Plus: volcanoes, Frankenstein, and Shayle’s childhood with geodes.

Recommended Resources:

Catalyst: Navigating the electrification gauntlet
Canary: The US offshore wind industry faces a moment of reckoning
S&P Global: Cancellation of Navigator CO2 pipeline raises critical issues for several industries
Catalyst: Growing the carbon dioxide removal market

The Volts crossover episode Nov 03, 2023

Show notes

Some technologies grab the spotlight even beyond #energytwitter, and some fly under the radar. Which ones are getting more attention than they deserve, and which aren’t getting enough?

This is the episode you never knew you needed: Shayle talks to Volts host David Roberts about the most underhyped and overhyped trends in climatetech right now. David has written about clean technology for the past two decades, first at Grist and then at Vox. He now writes a newsletter and hosts a podcast of the same.

Together, Shayle and David cover topics like:

Why this new wave of thermal storage technology is different.
Small modular reactors and why David and Shayle disagree on how much hype they deserve
Why rising interest rates are starting to become a big problem for climatetech.
The Inflation Reduction Act and how people still don’t grasp how big of a deal it is.
Plus: electric stovetops, mineral bottlenecks, and networked geothermal.

We want your climatetech questions for Shayle’s Ask Me Anything episode! Email questions to us at catalyst@latitudemedia.com. You can also tag us on Twitter or LinkedIn with the hashtag #AskCatalyst. Or you can leave us a voicemail at 919-808-5832.

Recommended Resources:

Volts: What's the deal with district energy?
Volts: Fine, we're doing gas stoves
Catalyst: Solving the conundrum of industrial heat
Catalyst: Strong opinions on small modular reactors

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The market for microgrids Oct 26, 2023

Show notes

The electrification gauntlet is this: The more we electrify, the more we ask of the grid. New demands on the grid are coming right as it’s facing some of its biggest challenges, like interconnection delays, transmission congestion, and extreme weather.

But there’s a way to take some of the strain off the grid when it doesn’t deliver what you need – Build your own! Microgrids, as they’re called, are electrical networks that can function independent of the larger grid.

So how do they scale? And what counts as a microgrid, anyway?

In this episode, Shayle talks to Tim Hade, co-founder and chief development officer at Scale Microgrids. (Scale was a launch sponsor of Latitude Media, which co-produces this show. This interview is independent of that sponsorship and was scheduled prior to Scale becoming a sponsor).

Tim and Shayle talk about the state of the microgrid market. They discuss topics like:

Why microgrid switchgear is a major bottleneck right now
Whether the Chinese supply chain for microgrid parts will bounce back, or new manufacturing will spring up in Europe and the U.S. to replace it
The effort to standardize microgrids to increase adoption

Recommended Resources:

Canary: Puerto Rico’s first community-led microgrid is ready to launch
Canary: A giant solar microgrid is coming to New York City’s JFK airport

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