Will Entrepreneurs Save Us from Global Climate Change?

by Bob Shively, Enerdynamics President and CEO

“Producing large-scale, reliable, affordable, and carbon-free energy is one of concept_business.jpgthese key global problems. The swords that cut this Gordian Knot: breakthrough technologies built and deployed by entrepreneurial companies with global scope.” ~ Reid Hoffman, LinkedIn founder[1]

This week more than 150 world leaders are meeting in Paris to discuss action on climate change at the so-called COP21 (which stands for the 21st Conference of the Parties). The leaders are attempting to craft an agreement that will commit the various countries of the world to take action in addressing climate change. Some observers question whether politicians can truly come to agreement that will result in meaningful action before it is too late. As Microsoft founder Bill Gates notes: “It takes years to develop new sources of energy, and decades to make them a significant part of our energy mix.”[2]

Instead of waiting for regulatory initiatives, Gates and a number of other highly successful entrepreneurs including Jeff Bezos, Richard Branson, Vinod Khosla, George Soros, and Mark Zuckerberg have formed the “Breakthrough Energy Coalition”[3]. Reportedly the largest fund ever created to invest in clean energy development, the fund is intended to provide the capital needed to drive innovation from government labs to the market place. The need for such funding is outlined in the coalition’s investing principles:

“The private sector knows how to build companies, evaluate the potential for success, and take the risks that lead to taking innovative ideas and bringing them to the world. But in the current business environment, the risk-reward balance for early-stage investing in potentially transformative energy systems is unlikely to meet the market tests of traditional angel or VC investors – not until the underlying economics of the energy sector shift further towards clean energy.”[4]

The Breakthrough Coalition Concept:

blog infographic 12.2.15

Areas for investment include electricity generation and storage, transportation, industrial use, agriculture, and energy system efficiency. Investments will include new technologies as well as innovations that enable current technologies to become more efficient, scalable, or cheaper. For potential recipients of investment, “the key differentiating factor must be a credible pathway to rapid scaling – providing affordable energy to the greatest number of people without overburdening essential resources including land use.”[5]

What makes the new coalition different from other sources of capital?  Investors in the coalition state they are committed to long-term patient investment motivated not only by the desire to make money, but also to address the critical need to transition our energy systems. Will the result be the end to concerns over global climate change?  Of course there is no way to know, but there is room for optimism when some of the best business minds in the world are spending their money to try.


 

Footnotes:

[1] http://www.huffingtonpost.com/entry/green-technology_564f6d2fe4b0258edb315f71

[2] See Gates’ paper Energy Innovation available at http://www.gatesnotes.com/Energy/Investing-in-Energy-Innovation?WT.mc_id=11_30_2015_05_EnergyRD_BG-TW_&WT.tsrc=BGTW&linkId=19160797

[3] http://www.utilitydive.com/news/bill-gates-heads-largest-ever-public-private-partnership-to-fund-clean-ener/409994/

[4] http://www.breakthroughenergycoalition.com/assets/resources/breakthrough-energy-coalition-investment-principles.pdf

[5] ibid

About Enerdynamics

Enerdynamics was formed in 1995 to meet the growing demand for timely, dynamic and effective business training in the gas and electric industries. Our comprehensive education programs are focused on teaching you and your employees the business of energy. And because we have a firm grasp of what's happening in our industry on both a national and international scale, we can help you make sense of a world that often makes no sense at all.
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