VC is remaking education to save the planet
Hello, friends. Our editor tells us we get too wordy in these intros, so your Protocol Climate team is abstaining from references to Cinco de Mayo and Karl Marx’s birthday and getting down to business. No fun here! (OK, maybe a smidge.) Today, we’re talking about Stanford’s billion-dollar climate school, how the solar trade war is screwing utilities, and all the VC deals fit to print.
Venture capital’s next frontier
As the Barenaked Ladies once sang, “If I had a billion dollars, I’d buy you a school.” Sorry, what’s that? I’m misremembering the lyrics? Well, close enough.
There are very few people on Earth who could decide to endow an entire school, and many of them are in Silicon Valley. One has decided to do just that. On Wednesday, Stanford dropped a bombshell: Its first new school in 70 years will be centered on climate research and received a $1.1 billion nest egg from John Doerr, Kleiner Perkins’ chairman, who has an estimated net worth of $12.7 billion. It’s a sign of the tech industry’s growing interest in climate as the definitive problem to solve.
The new school is focused on “gigaton scale” solutions. If you care about a habitable climate, it’s all about the gigatons, baby. (We’re doing ‘90s music references today.) Humanity is currently dumping about 36 gigatons of greenhouse gas pollution in the atmosphere each year, a rate that will exhaust our carbon budget for a safe climate in about a decade. Arun Majumdar, the Stanford Doerr School of Sustainability’s founding dean, told Protocol that faculty and students will focus on researching and building solutions that meet that scale.
- “We’ve got to take things to scale, at the gigaton scale, or the billion-people scale,” he said.
- That includes technology like wind turbines and solar panels that are ready to go right now and have the potential to shave gigatons off the world’s emissions. In this case, it’s all about researching creative policies to scale them up.
- Majumdar said the school will also do cutting-edge research looking for “breakthroughs and innovations that could change the ballgame in the next 10 to 20 years.” That could be carbon dioxide removal, nuclear fusion or even techniques to improve crop yields amid worsening weather.
- This intentionality about big solutions is important, especially if our past mistakes are any indication. “We are living in the 21st century with the unintended consequences of how we developed in the 20th century,” Majumdar said. “Things went to scale, and we didn't quite pay attention to the CO2 emissions, to the plastic waste, to the shortage of water and mineral resources, etc. Now, we have to pay attention.”
Does that sound familiar? Silicon Valley is obsessed with scaling up things, whether it's app downloads or saving the planet. Doerr even published a book about climate change last year called “Speed & Scale.” There’s obviously no denying we do need to scale climate solutions rapidly to stave off planetary heat death. Still, the School of Sustainability's focus feels very of-the-moment when it comes to how the tech industry is prioritizing climate change.
- Bill Gates’ Breakthrough Energy — which Majumdar advises — is specifically interested in investing in solutions that can scale up to remove half a gigaton of carbon dioxide from the atmosphere (or prevent it from getting there).
- Frontier, the $925 million fund for carbon dioxide removal, is also focused on buying services from companies that can be part of a half-gigaton scale portfolio.
- “Gigatons rule everything around me” is what I’m saying.
- Corporate VC arms poured $23.2 billion into climate startups last year, easily a record influx of cash that blew the previous high out of the water.
- Venture capital getting involved in climate education is a new wrinkle, though. Stanford is no stranger to VC; the university is synonymous with Silicon Valley. Whether the school hones in on the Valley’s favorite solutions and techno-optimism will be fascinating to watch in the coming years, though. Stanford’s press office didn’t respond to follow-up questions about what input Doerr would have on the school’s research and education programs.
The school will court everyone interested in solutions, including fossil fuel companies. Divestment from fossil fuels has become a hot-button issue on college campuses around the world, but while a number of institutions have taken their pensions and endowment money out of such investments, many universities continue to work with oil and gas companies. That will include the Stanford Doerr School of Sustainability. (Full disclosure: It also includes Columbia, where I teach.)
- Majumdar himself holds a professorship named for Jay Precourt, a longtime fossil fuel executive. Precourt has an energy institute with his name on it that will become part of the school. The research institute also counts a number of oil majors among its funders.
- “[If] we are now trying to remove how many tens or hundreds gigatons from the atmosphere and manage all of that, this is going to be … all hands on deck,” Majumdar said. (For clarity, most estimates peg the need for carbon dioxide removal at 10 gigatons per year or less. It could certainly add up to hundreds in the long run, though!) “Anyone who's willing to be part of the solution, who can take it to scale can partner with us? We will partner with [them].”
- Big Oil is no stranger to getting up in education’s business. How that affects innovation and the solutions that school focuses on will be just as fascinating as the role venture capital plays.
The solar industry soap opera claims a victim
Major players in the U.S. solar industry have been shouting from the rooftops that a Commerce Department investigation has been wreaking chaos for the last month. This week, their fears came true: The Indiana utility company NiSource announced it will delay two scheduled 2023 coal plant retirements until 2025 because of “uncertainty” in the solar panel market.
NiSource drew a direct line from the Commerce Department investigation of Southeast Asian solar panel manufacturers to the extra two years of coal generation. In the company’s quarterly earnings call, it told investors that “uncertainty” in the solar market has knocked multiple solar projects off schedule by six to 18 months. Those projects were on track to replace the Midwestern utility’s coal operations.
- The rest of NiSource’s coal units, including the Michigan City Generating Station, remain on track for retirement by 2028 (must be nice), and the company is nevertheless on track to achieve its goals of reducing its overall Scope 1 greenhouse gas emissions by 90% by 2030.
Should you care? Yes. I mean, why else would I even be writing this? But seriously, NiSource may lack the name recognition of PG&E or ConEd, but it has historically been one of the most ambitious utilities in terms of transitioning from coal to renewables. And it’s really stood out among its more-reluctant-to-decarbonize Midwestern peers. In other words, if NiSource is struggling to get renewables installed due to the Commerce Department investigation, you can bet it’s the tip of the iceberg of utility woes.
The NiSource mayhem shows the Biden administration is fighting itself. While the president has been vocal about his desire to speed up the renewable transition, the Commerce Department’s investigation is hamstringing that goal.
- In February, the tiny — and by all accounts struggling — California-based Auxin Solar asked the Commerce Department to investigate solar companies operating out of Cambodia, Malaysia, Thailand and Vietnam, which currently supply roughly 80% of the panels in the U.S.
- Auxin alleged that Chinese companies were dodging U.S. tariffs (which have existed for over a decade) by building panels in Southeast Asia using Chinese materials and Chinese intellectual property, and sought “fair pricing.” The department took up the request in late March, and the resulting investigation is expected to last roughly a year.
- Chaos has since ensued. Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, said the investigation would “have a chilling effect on the solar industry.” While no further duties would be imposed until the investigation wraps up, the uncertainty of what could result has effectively halted solar panel imports.
Ironically, the uncertainty could also undermine the Commerce Department’s own climate push. As we covered mere weeks ago, Commerce Secretary Gina Raimondo directed the department to integrate climate considerations into its policies, strategic planning and programs as a part of the Biden administration’s “whole-of-government climate efforts.”
- The department has to follow through on this investigation since it’s the law and all (and since the investigative body is separate from political considerations). But the timing is certainly less than ideal.
- A Commerce Department spokesperson told Protocol that “imported solar cells and panels remain important to advancing current efforts — and Commerce is committed to holding foreign producers accountable to playing by the same rules as U.S. producers.”
- Mattea Mrkusic, policy lead for the climate policy shop Evergreen Action, said the case is in direct conflict with the department’s commitments. “Resolving this case is no doubt the biggest impact the Commerce Department could have on climate change mitigation,” she told Protocol.
A MESSAGE FROM PWC
M&A and workforce reorganization can create a wealth of opportunities for companies seeking rapid growth, transformation and market expansion. In fact, 47% of executives say pursuing corporate M&As, joint ventures and alliances is their top growth driver in 2022. Unfortunately, nearly half of executives say talent acquisition and retention challenges are the biggest obstacle.
Make it rain
Group14 Technologies, which manufactures silicon battery materials, raked in $400 million in series C funding, led by Porsche.
Sealed, a home weatherization and electrification company that says it will eat the cost of decarbonizing if it doesn’t cut energy waste, raised $29.5 million, led by the property tech investor Fifth Wall, with contributions from Robert Downey Jr.’s FootPrint Coalition and CityRock as well.
The community-scale clean energy company Encore Renewable Energy secured a $20 million senior loan from Lacuna Sustainable Investments and Javelin Capital.
Sensible Weather, a climate risk analytics platform that provides users weather guarantees for major events, raised $12 million in its series A funding round led by Infinity Ventures.
The industrial electrolyzer company Advanced Ionics closed its initial financing round with a $4.2 million investment led by Clean Energy Ventures; the company says its technology can produce hydrogen for less than $1 per kilogram.
Scoot Science, an ocean analytics and forecasting startup, raised $4.1 million in its seed round, led by Third Kind.
— Lisa Martine Jenkins
Turns out launching rockets may not be great for wildlife. Government documents show the piping plover population has declined near SpaceX’s Starbase.
Russian oil and Europe may not mix. The European Commission is weighing a Russian oil phase-out as the war in Ukraine continues.
Big Coal loves EVs? It’s not quite Kim K. and Pete Davidson hot-and-heavy, but apparently it’s a thing, with coal giant Alliance Resource Partners inking a deal to become a shareholder in Francis Energy, an EV charging company.
The supply chain claims another victim. Volkswagen is the second-largest manufacturer of EVs on the planet. And it’s also sold out of them.
You can buy a nuke on Wall Street. OK, you can’t actually buy one. But NuScale, a next-generation nuclear reactor company, is now a publicly traded company.
— Brian Kahn
A MESSAGE FROM PWC
ProEdge can help you conduct a skill gap analysis across your organization and gain insights you can leverage to develop forward-looking plans while taking into account the needs of the entire enterprise, including individuals, teams and functions. In an M&A scenario, an upskilling program like ProEdge can also be used to uncover employees’ skills that weren’t utilized before.
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