⚡️$100B clean hydrogen debate

Weekly debrief for 3/13/23

March 13, 2023

Hey friends,

Welcome to this week’s debrief on climate tech, business, and policy.

I’m sending this on a Monday instead of Thursday. Later than usual, but A LOT has happened over the past week, so it works out.

Today’s newsletter unpacks:

  • The divided heating systems of the US

  • Clean hydrogen’s potential for $100B subsidies with questionable impact

  • $150M for clean energy marketplace, $25m for infrastructure compliance automation, and $18m for geothermal engineering.

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📊 CHART OF THE WEEK

Natural gas and electricity are the two most common options for home heating in the United States. However, rural areas often rely on propane or fuel oil due to limited access to natural gas pipelines.

The prevalence of these heating sources across the country varies significantly, driven by factors such as local climate, electricity prices, and safety concerns. In areas with warmer winters, electricity is more commonly used, while natural gas is prevalent in heavily populated urban areas such as New York, California, and Illinois.

Political affiliations also play a role, with Democratic strongholds often facing opposition to ditching fossil fuels, while Republican strongholds in the South and rural areas stand to gain the most from switching to electric heating, particularly heat pumps. In some cold regions, residents have been skeptical about the effectiveness of electric heating and heat pumps in keeping them warm.

🎯 NEWS THAT MATTERS

Key insights and trends across key climate sectors like energy, transportation, food, and more.

📈 BUSINESS

  • SVB's financial woes began when it announced the need to raise $2.25 billion, causing a frenzy among investors that resulted in a massive bank run.

  • Customers withdrew $42 billion of deposits by the end of the next day. According to some experts, the panic was fueled by venture capitalists. Customers who stayed with SVB are uncertain about when they will be able to access their funds.

The climate capital stack is more diverse (and complex) than the typical venture-backed startup, so the climate space may be insulated from this specific event. But SVB is also the second largest bank collapse of all time, the first since Washington Mutual in 2008, and claims to finance 60% of community solar nationwide, according to Heatmaps.

  • The U.S. Treasury Department and IRS are working on implementing a tax credit to promote the production of clean hydrogen.

  • But they face opposing arguments from stakeholders, with some warning against overregulation that could make clean hydrogen too expensive to produce, while others emphasize the need to avoid regulations that would undermine the environmental benefits of the credit.

  • Solar panel recycling could help reduce waste, pollution and costs while boosting circular economy.

  • Only 10% of US panels are recycled, but companies like SolarCycle are offering solutions by extracting valuable materials like silver and copper, and reusing functional panels.

  • The industry is expected to grow significantly, but more recycling facilities are needed to handle an estimated 3,000 football fields worth of retired panels by 2030.

🏛 POLICY & POLITICS

  • American and European officials are working on a limited trade deal allowing European firms access to benefits from the Biden administration’s new climate law. They plan to focus on critical minerals for electric vehicle batteries, which would benefit Japanese and UK companies too.

  • The bill imposes strict conditions on cars that qualify for tax credits, creating friction for non-American automakers. Negotiations hope to avert a subsidy war, ensuring EU companies can offer lithium, nickel or other materials to North American EV makers.

  • Municipalities in the US are building solar farms on top of landfill sites, with support from the Inflation Reduction Act (IRA). Backers of the scheme include the US Environmental Protection Agency, which notes that despite thousands of landfills across the country, solar installations have not grown at the same rate as the wider industry.

  • But building on landfills requires a ballasted system that avoids disturbing the waste underneath, as well as tracking settlement patterns to ensure panels remain level. The IRA offers additional tax credits for brownfield sites, as well as for renewable energy projects sited in or benefiting low-income communities.

  • The US Department of Energy is set to release $6b through its Industrial Demonstrations Program to accelerate decarbonization projects in energy-intensive industries such as iron, steel, aluminum, and cement.

  • The funding is part of President Biden's net-zero economy goal by 2050 and his Bipartisan Infrastructure Law and Inflation Reduction Act. The program will help reduce carbon emissions and provide American manufacturers with a competitive advantage in the global clean energy economy.

  • The Department of Energy is seeking first-of-a-kind or early-stage commercial-scale projects to fund through the Industrial Demonstrations Program.

🚀 SOCIETY & IMPACT

  • Reactivate, a joint partnership between Invenergy and investment firm Lafayette Square, is aiming to provide low-income communities with solar power through community solar projects in Illinois.

  • The company is offering a share in solar projects for low to moderate income subscribers, with the projects expected to deliver $12m in savings over 20 years and power 1,200 households.

  • Subscribers must earn below 80% of the area median income. Solstice Power Technologies, which manages subscriptions, is working to gain subscribers through community organizing and partnerships with local business, government, and nonprofit entities.

  • The US EPA announced $250 million in funding for state and local governments to develop plans to reduce greenhouse gas emissions and advance environmental justice.

  • Each of the 50 states, Washington, D.C., and Puerto Rico will be eligible for up to $3 million in planning grants, while the 67 most-populated US metropolitan areas are eligible for $1 million in planning grants each.

  • EPA Administrator Michael Regan stated that the grants are an important first step to help communities create innovative strategies to reduce emissions and drive benefits across the country.

  • Carbon credit certifier Verra has pledged to scrap its rainforest protection programme by July 2025 after a Guardian investigation revealed that more than 90% of its rainforest offset credits do not represent genuine carbon reductions. -

  • The non-profit's flawed system, which is used by Disney, Shell, Gucci and other corporations, has been found to put those who buy its offsets at risk of greenwashing.

  • Verra will introduce new rules in its new programme to combat these problems. Human rights issues are also a concern in one offsetting project run by NGO Conservation International and the Peruvian government.

🚀 TECH & STARTUPS

  • Helio Home, a Denver-based startup, offers homeowners a one-stop shop for home electrification by creating a customized net-zero plan that includes everything from insulation and ventilation to solar panels and EV charging. It provides a comprehensive roadmap for customers to follow at their pace.

  • The company has helped more than 100 homes in the Denver area reduce their carbon footprint by an average of 5 to 8 metric tons per year. Other home electrification startups in the US include Elephant Energy, Amply Energy, BlocPower, and Sealed.

  • Uber is considering spinning off Uber Freight as a stand-alone publicly traded company or selling it, according to Bloomberg. The move follows Uber Freight slipping into negative earnings in Q4 2022 and a 43% YoY decline in Q4 revenue.

  • A potential IPO of Uber Freight would mark the first time a digital brokerage firm would be subject to public market scrutiny. A sale would likely come in at around 1x estimated 2024 revenue of approximately $7.85 billion.

  • DroneSeed, part of Mast, uses drones and software to help with reforestation efforts. The company recently acquired Cal Forest Nurseries and Siskiyou Seed to ramp up seed collection and cultivation.

  • The increase in wildfires has intensified the need for more seeds and polycultural cultivation. Mast aims to use data analytics to identify when and where mass seed production events are about to happen. It will then collect more seeds, nurture them in greenhouses with optimized growing conditions, and plant them through drone or hand-planting.

  • Mast issues carbon credits for its reforestation work to help pay landowners and forest managers. Its first project resulted in the issuance of over 150,000 credits that helped pay for the regeneration and monitoring of a 300-acre site in Henry Creek, Oregon. Mast hopes to make credits for reforestation more common on voluntary carbon markets.

💰FUNDING

The latest funding and grants for promising climate tech startups.

Banyan Infrastructure, a platform that automates contractual compliance throughout the loan lifecycle of infrastructure, raised $25m in Series B funding from Elemental Excelerator, Energize Ventures VoLo Earth Ventures, and SE Ventures.

Palmetto, a clean energy marketplace, raised $150m from TPG Rise Climate Fund.

Silfab Solar, a North American photovoltaic (PV) module manufacturing company, raised $125m from ARC Financial and 5 others.

Overhaul, a supply chain integrity technology solution, raised $73m for supply chain visibility and insurance solutions.

Geothermal Engineering, a developer of deep geothermal heat and power projects. raised $18m in private equity funding from Kerogen Capital and Thrive Renewables.

THIS, a plant-based product brand that provides alternative meat products, raised £10m in Series B funding from BGF Ventures and Lever VC.

Cowboy, an ebike company that creates innovative electric bikes for city riders, raised €10m in Series A funding.

Roofit.solar, an integrated solar platform, raised €6.5m in venture funding from BayWa r.e. Energy Ventures and EdgeCap Partners.

Ecosystem Restoration Standard, a certification for nature-based restoration projects on the Voluntary Carbon Markets, raised €5m in seed funding from LocalGlobe and RAISE.

Shifted Energy, who enables electric water heaters to consume excess renewable energy and provide grid services, raised $4.3m in seed funding from Buoyant Ventures, EPIC Ventures, and 3 others.

Heatmap News, a geographical news aggregation focusing on changing the planet, raised $4m in Series A funding from Autumn Road Capital.

Copper Labs, who provides utilities with real-time grid intelligence without the need for extensive (and expensive) overhaul, raised $3m in grant funding from National Renewable Energy Laboratory.

DexMat, a manufacturer of low-carbon nanotube fibers and films, raised $3M in seed funding from Shell Ventures.

😎 COMMUNITY SPOTLIGHT

Must-reads, listens, and cool projects from the climate community 

  •  zooms out on the Anti-ESG debate. It’s easy to get swept up into the political dram of today, but this will probably be a non-issue over time.

  • shared the Prime Mover's Lab's Breakthrough Science Roadmap in his always enjoyable . Knowing when trendy science and tech's impact will be realized can help create a mental model for climate.

➡️ What are you working on? I’d love to share it, just send me the details here.