Accelerating Low-Carbon Solutions

Accelerating Low-Carbon Solutions

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Please join me in welcoming obviously to the stage show. We have Julia and Sarah joining me. I'm going to let them both do a little bit of an introduction of what they both do, and then we can talk a little bit more about clean tech. So I'll let you go first, Julia. Of course. So good evening, everyone. I think we're the last indeed, before the actual date.

So I work for Breakthrough and we were founded by Bill Gates in 2015 at the Paris Cup, where essentially our mission is to how do we accelerate the transition and the deployment of technologies that we need to reach net zero in order to reach net zero. And we know that that will take a lot of technological transformation. And also in order to be able to improve the business case so that those technologies actually reach the market by 2050 and even before. So how do we do this? As we support cutting edge research, We have a program called Fellows where we support researchers with grants. We invest in companies where we have a few funds, where we've invested in over 120 companies, and then we also invest in support in first of a kind projects and I'm sure we'll talk about.

So and this is with Catalytic Capital that Ryan Marie sort of mentioned it, how do you blend that type of finance? But it's not just about capital, it's all about how do we have the right regulatory environment. So we've got a policy team and it's also about the partnerships. As Fabio was saying, we're certainly not going to deliver in our climate goals alone. So think about us as about technology,

capital, policy and partnerships. Yeah, that's the theme of the night partnerships, for sure. I'm Sarah Macintosh. I run an initiative called Clean Tech for UK, which is a policy advocacy initiative which brings together a group of investors and their associated portfolio companies. And we work together to advocate really to champion clean tech innovators and to make sure that we have the best policy environment for them to succeed. Can you tell us a little bit more about why you founded Clean Tech UK and why why it came to be? Yeah, sure. So we we were founded last year and to say that breakthrough energy is part of our coalition. It's also philanthropically funded

through Breakthrough energy, and it's a coalition of investors that all felt that they perhaps weren't didn't have enough of a policy voice to represent the startups and the investors within the sector and felt very strongly that it was very important to get their views across and have their expertise explained. The real lived experience, which I think sometimes doesn't. The policymakers and government doesn't always really have the ability to fully understand that. So we brought together this group. We use their expertise, the evidence to look at the investment year on year. And I think we already heard earlier that clean tech is a really good story for the UK.

It's a really important story, but it's not the headline numbers that we've we've seen, which is 2.6 billion was invested last year from venture capital alone. But that's not the full story. There is definitely at an earlier stage preference. So when it gets to commercialisation first of a kind, we're definitely seeing that that companies are struggling at that stage to raise funding.

So we yeah, we think it's really important to advocate to make sure that companies can go right from the start of the journey all the way through. Amazing. And what do you how did you build the coalition? Where are you now? How many partners do you have and what one you're in? Kind of where are you? Yeah, so we started with a coalition of six investors, six founder investors, three were part of that. And we've gradually built their coalition over time to 11 now, and collectively they have around more than 6 billion in the various funds and they all bring their portfolio companies when we need expertise from sort of living on the ground. And we're continuing to think about

building that. So we'll probably bring in more scale up companies and more investors over time. And why at Breaker did you are you partnering and why is this so important from your perspective? Sure. Sure. So I mean, Sarah has a lot of sister organisations, so there's clean tech for Europe, clean tech for France, we've got clean tech for Nordics. There are many across across Europe. And the genesis came from us speaking in

the early days with policymakers and particularly politicians who were saying we have to legislate and regulate on really hard topics around decarbonising industry or setting up specific regulations and mandates. But the challenge that we have is that we hear really loudly those companies that don't want to transition or that. In a transition with some government funding. But we're not hearing sort of who are the positive voices, those venture capitalists that actually have invested in companies that really believe in their story and the entrepreneurs who are building up these factories, building up the jobs of today, but also the jobs of tomorrow. And the other thing that was happening was we felt like there was government regulating for for for technologies and for companies, but they didn't have a frontier. They didn't have a view on what are these new technologies that are actually emerging, you know, what is long duration energy storage or what is going to be how do you do low carbon cement in different ways than only using carbon capture.

So that's how the genesis came back is from us, is really thinking about we need to to help structure that ecosystem. And also we didn't want breakthrough energy ventures to be alone, right? There is a there's a very vibrant and future looking. Venture capital community here. You know, there's there's many in the coalition. There's even more.

We started off at Clean Tech four for Europe with six coalition members from venture funds. Now we've got around 30 that cover Europe. But the journey didn't start just with the money. In that sense, it shouldn't just be investors. And so what we wanted to do was then bring in the story of companies that have raised 50 million or more, which we call scale ups. And then that also wasn't the only part

of the story. So then are clean tech for Iberia now, has banks and has universities, and that's also. So it's about bringing the ecosystem together and it's really about sort of when there's a particular policy, for example, what should be the UK's response to the IRA or at the European Union, This net zero Industry Act is really to get a community of those who are investing, a community of those who are leading sort of on the technology edge, which doesn't mean that there aren't also large corporates, but from our perspective we really wanted to help structure that voice so that it's positively impacting regulation, both in terms of removing the red tape, but equally saying how you actually build a business case for these companies in these technologies to work. And Sarah, what do you feel like since you're trying to address some of the unique challenges that are here in the UK? What are some of the kind of challenges for clean tech here specifically? I said the biggest challenge is probably not unique to the UK.

Actually. I think we're seeing actually not just in the UK but across Europe, a bit of a challenge to to get enough capital to commercialise some of these projects. They are big infrastructure project tend to be big infrastructure hardware projects that require a lot of CapEx and this risk involved and you know, at the moment people are not, not well informed to to take those risks. So I think that's the first thing.

And then I would say perhaps more specific to the UK is the challenges around the grid. You know, the wait times, I know National Grid are trying to address that, but the waiting times to get on the grid is far too long. You know, we're not going to meet our decarbonisation targets unless we really change that. And planning is a really big problem in this country. Trying to build anything is really challenging and quite frankly, we can't wait 7 to 10 years to build some pylons or or whatever else we need. We need to crack on with it. So how does the kind of the coalition

and the founding members, how can the different the the ones that have been brought on, how do they work together to kind of address some of these challenges? And what are the different unique perspectives that each of the different partners can bring? Yeah, So I think that we work really well together to try to to live out the experience that they're feeling on the ground and provide a collective voice to say, Look, government, these are the challenges we're finding, this is the impact we're having. So for example, we have a great innovative company here, but we're not growing as quickly as we could be. We're not providing as many jobs as we could be because of planning or capital or whatever.

So I think that we just we managed to raise these issues with government. We come with a united voice and we make the arguments very simple. Gillian I think I would add on that. Yeah. I mean, I'd say it's about sort of bringing multiple voices as well to the table, which is what the clean tech for for UK Coalition has done, you know, when some of these more sort of oriented policymakers discussions around what are some of the challenges. Sarah brought together a group where we had investors by like breakthrough energy, but we also had funds that are addressing the growth stage.

So just climate or decarbonisation partners, those being sort of more focused on the growth stage. There were also some some some actual companies scale ups that are saying, here's the challenges that we have. If we want to build up a manufacturing facility to do X, Y and Z.

The challenge that we have is there's a business case in the UK, in the US, where we know what is going to be a tax credit, but if you're operating out of the UK, then there are challenges related to guarantees that we might. Not be able to get for for the manufacturing and the performance challenges with regards to loans and actually the cost of those loans or challenges to get equity. And so the idea is really to bring that coalition in multiple voices to be able to give a proof point, to actually say, here is are some examples of what you need to double down on. So permitting for for sure. As Sarah was saying, how do we address

the lack of growth capital? So that really being on the fundraising track for companies, how do we address these heavy infrastructure projects that come with the first of a kind risk so that meaning more that they're venture capital risk, like sustainable aviation fuels or long duration energy storage, And then how do we bring sort of more demand? So a lot of what the coalition is also thinking about is like, how do we de-risk these projects, but also how do we create more demand? And so that's a lot about what Sarah and the team are sort of focused on, which is how do we have those multiple perspectives and then make that relevant for policymakers where of course there will be an election year this year. So how do you also make that relevant for for some of these political decisions that will be made? So to talk about this in practice. Sarah, do you want to share a little bit about maybe a case study example of how you put this into place and something that you've worked on? Yeah, sure. So talk talked last year. We you know, we were very focused on some of the planning and permitting and the grid issues. So so we did a few things and starting with a letter to government over the summer where we asked for them to fast track fund and focus, which was really about addressing the challenges to the grid, addressing the challenges to planning and really focusing in on the policy and the sentiment of the policy to encourage the sector. And then we did a deep dive report into

the power sector. We looked at the levels of investment, we looked at what was happening with the electricity system operator, what was happening with National Grid, looking at bringing some of the innovators into the story and about what they have to offer that offer. So people like reactive technologies who help grid inertia, people like Piccolo, who manage flexibility and C power, who are a hydrogen battery. And we took them to government and we did a roundtable and a detailed report just to help to bring these things to life.

Wow. Well, that's that's a good one. Do you have also, Julia, anything you wanted to share about? We also earlier in the earlier conversation, heard a little bit about sustainable aviation fuel and how you were working together with the Green Finance Institute. Can you talk a little bit about maybe how that has worked as well? Sure.

I think Maria said it well. I think it's about sort of bringing the those who are developing the project, those who are defining the policies and those who are ready to invest or not ready to invest to understand what are the challenges if. And so we worked with the Green Finance Institute really to try and address a huge potential, which is in the UK where there's huge leadership, there's a 10% mandate for by 2030 for sustainable aviation fuels. Right? And that's a huge mandate. But as we know, mandates do not mean final investment decisions, right? So the whole articulation was around bringing the entire value chain and those who were actually investing either from a debt perspective or investing providing equity or those insurance companies and understanding who in the value chain from a financial perspective is ready to take on what type of risk. So we looked at safe projects and then we said, okay, well, what is a final investment decision related risk? Is it feedstock? Is it power supply? Is it going to be offtake? And how do we sort of manage those risks? And then thinking about from a government perspective, Department for Transport is thinking about revenue based schemes, and it's also thinking about how it might support from a CapEx perspective. So this the importance of these

dialogues of how do you have Okay, you've got a mandate, but what does that mean actually in terms of infrastructure? And then what are the risks associated and then bringing the different parties to the table to understand, again, what is the role of public funding and then what type of blended finance might there be and what type of other de-risking mechanisms, including on the offtake side to bring the airlines and bringing many others to essentially see how do you create a business case? Because these first of the kind are going to be really hard. So it's about how you structure these first of a kind project so that the first of a kind becomes, at some point, project finance ready, and then that becomes the second of the kind and the third of a kind. And then it's become mainstream, like what happened with renewables, right? That's essentially what we're trying to tackle. And to Sarah's sort of, you know, important contribution, which is to say it's great. There's a huge, vibrant innovation community, but you need that community to deliver an impact, which is only going to do that through scaling. So after listening to both of those and the lessons that you learn from both of those cases.

Any examples? How can the what can the UK do now to kind of make sure that it's remaining and and competitive and really bolstering the clean tech innovation here? You want to start doing you can go first. Sure. Of course. So I think what the coalition put together, you know, Fast Track Fund and Focus seems like a pretty good sort of starting point in Europe that was translated in speed, simplicity and scaling. The point is, I think there's there's sort of a regulatory element. I think we've touched upon that and making sure that the policies there and also that the is creating the business case. Then there's the whole financial piece and making sure that there's actually perhaps smarter use or tailored or targeted use of public funding in order to de-risk, in order for there to be mobilisation of the private sector financing. Then I think there's a really important

point which is around collaboration, particularly around collaboration of having large corporates who can be off takers or large corporates who work alongside and have a lot of knowledge around industrialisation. And so thinking about this innovative collaboration between more of the private sector of how we can, how we can scale. So there's a lot of sort of recipes and of course it needs to be sort of sector based, but it starts with there being the right targets, the right business case and then the right sort of backing when it comes to capital regulation and and demand and collaboration. Is there anything you want to add? Yeah, I think I would add policy planning people. So policy you've already mentioned the regulation, but I think there's something here around setting the right ambition and the right sentiment for investors, for people to know where we're going.

We've seen this flip flopping from the current government hasn't really done much to for the policy sentiment or the or setting the ambition right. And then there's the planning. We need to sort that out. And then there's the people. Right. We need people with the right skills. I think I mentioned earlier was the

whole Port Talbot debacle. And if you don't bring people along with this and you don't have plans, I mean, they have years to put plans in place to train these people. Yeah. You know, they're really high skilled, valuable people, and we've just left it too late. So people Jeff and I totally double down on the people side. I mean, these technologies are made by people and sort of making sure that there's not only the right type of entrepreneurial spirit, the right type of education, but also the the skills and the reskilling. So totally aligned on the three P's as well. Well, the first session, John, also

tried to end on an optimistic note. I think we I want to end this on an optimistic note. So what what are the technologies that you are the most excited about right now that you think are going to be the best future technologies that we should all be focused on? So I start off. So I think the way that we look at it,

that breakthrough is first you need to electrify. I mean, that's the cheapest option. So we're thinking about, well, okay, it takes two to tango. You've got renewables, but then you need long duration energy storage. So and then you need innovative grid

technology. So we get super excited all of a sudden when you think about the different storage and long duration energy storage technologies. Second is if you can't electrify, then you need to think about green molecules. So I get super excited when I start to see about projects and companies that are developing.

You know, hydrogen, geologic hydrogen is also a sort of a game changer. But also then how do you use that hydrogen to make green ammonia, green fuels? And if you can't deal with that, which I mean, and I think sorry, the other point is that there's also a need to sort of manage the carbon budget because we are on a trajectory that is not 1.5 compatible. So thinking about the carbon management piece and thinking about I get super excited when we start to talk also about direct air capture and those technologies. And then then there's another piece, which is why How do we find ways just not to produce CO2 in the first place? And so I also get super excited when I sort of see new technologies related to cement.

I don't know why, but, you know, and being able to produce cement without CO2 and there's some really cool startups in our ecosystem, but abroad are just making CO2 without the the limestone. And so I get super excited. I'm an optimist. Hot, right? Yeah. Yeah. And I would say, you know, we heard earlier around we've got the oldest housing stock in Europe. So I really think perhaps I'm quite excited by some of the stuff going on in the energy efficiency space. So building management, building new houses, you've got people like top Hat doing prefabricated smart houses. You've got people like Eric's who are

creating smart bricks to help not only with climate but also with how to control mode. And so I find find that pretty exciting. And then I'm really looking forward to seeing how the small modular reactors go for nuclear. Well, those are all very exciting about all of those. One last question. What can this. Audience do to help make the UK and

Europe more competitive in the clean tech space? You start, I think. Well, I think first of all, please come and talk to me about maybe joining us or, you know, thinking about reiterating the messages that that come out from us. So please do think about that. And then, of course, investment and

talking to government, I guess. And I'd say really speak up. I think there's it's really important to sort of show that there are positive cases. And when there aren't positive cases, really also to speak up about sort of how do we have addressed transition and how do we create an environment where there's more of a business case where it's actually it is a global race? At the end of the day, it's not just going to be the UK. The decarbonize is, so how do we create out of the UK global leaders that can then go, you know, sell those technologies. But equally how in the UK you can actually do a lot to have your electorate, your policymakers, address the issues that you have in the UK that also can be addressed through to good policymaking.

2024-04-28 22:59

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