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Irina Slav

Irina Slav

Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.

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New Energy Tech Is Hot Among Billionaires

Billionaires are spending more on renewable energy, storage, and battery technology. A group of them even set up a US$1-billion fund, Breakthrough Energy Ventures, to encourage research in these areas, aiming “to make sure that everyone on the planet can enjoy a good standard of living, including basic electricity, healthy food, comfortable buildings, and convenient transportation, without contributing to climate change.” One big reason for this is that there is more technology to invest in.

“In the last few years, the number of technologies ripe for investment has expanded dramatically,” Wood Mackenzie’s director for energy storage, Ravi Manghani, told CNBC. “It’s no longer just three or four technology verticals.”

Thanks to this expansion in research areas, investors with a focus on a cleaner energy future have a much wider choice of investment targets. However, the Breakthrough Energy Ventures fund is not just throwing money around. The fund, which features among its founders Bill Gates, Richard Branson, Jack Ma, Michael Bloomberg, and Jeff Bezos, has set four investment criteria.

The criteria include a focus on companies that can make a marked impact on global emissions—the potential to reduce at least 0.5 gigatons of greenhouse gases annually—as well as ones that are also attractive for other investors besides the fund. Scientific feasibility at scale is another criterion, mostly because of the longer time it takes to bring a cleaner energy technology form the lab to market. The last one is dubbed “Filling the gaps” meaning the fund is more likely to invest in research and development areas in the wider clean technology space that have stayed out of the spotlight.

To date, according to CNBC, the fund has invested in 14 companies working in areas that are familiar to those following the energy space: battery and grid storage, geothermal power generation, and fusion. Related: Trump Battles For Key Oil & Gas Projects

The fund is just one instance of a technology industry that’s been at the forefront of the renewable revolution. Another recent instance of this support for cleaner sources of energy was the Renewable Energy Buyers’ Alliance aiming to encourage more companies to switch from fossil fuel-sourced electricity to the output of wind, solar, and other renewable sources. This, in turn, would motivate the expansion of generating capacity and eventually reduce the share of fossil fuels in the energy mix, the founders of the alliance say.

Yet if Big Tech is behind cleaner energy, Big Banking seems to be still loyal to fossil fuels, or maybe it simply likes the faster returns. A recent report from a group of environmental organizations dubbed Banking on Climate Change found that even though investment in renewable energy has been rising, so has investment in fossil fuels from some of the largest banks in the world—the biggest lenders in the United States.

According to the report, the top lenders in the world had invested as much as US$1.9 trillion in the oil and gas industry between 2016 and 2018. The biggest fossil fuel supporters among these were all American banks, including Wells Fargo, JP Morgan, Citi, and Bank of America. These top oil and gas spenders were followed by RBC and Barclays.

The authors of the report argue this is undermining the fight against climate change. However, the existence of initiatives such as the Breakthrough Energy Ventures fund and the Renewable Energy Buyers’ Alliance suggest that renewables are not yet ready to completely replace oil and gas. This replacement will happen gradually even if the pace of tech improvements in the area accelerates.

Oil and gas will continue to be with us for quite some time and not just because the largest banks in the world are investing in them, but because the world’s growing population and equally growing affluence in many parts of the world will drive growth in energy demand that cannot be satisfied with renewables only.

By Irina Slav for Oilprice.com

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  • Lee James on April 01 2019 said:
    "Renewables only" will emerge fairly soon in select areas. For Hawaii it's a choice between burning oil for electric power or developing wind and solar energy. Idaho, which has 50% hydro already looks to do the rest with clean energy rather than coal.

    Obviously 100% renewable energy is not going to happen overnight. But we do need to have scalable options at the ready, if and when we wake up about oil dependency and the national security implications of climate change and world funding of petro states like Russia and Iran.

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