Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Podcast

The Hardest Working $27 Billion in the IRA

Inside season 2, episode 7 of Shift Key.

A check.
Heatmap Illustration/Getty Images

It’s potentially one of the most important — but least understood — provisions in the Inflation Reduction Act, and it’s finally out in the world. Last month, the Environmental Protection Agency spent $27 billion to set up new green banks across the country.

These new lending institutions could direct billions of dollars to supercharging decarbonization nationwide, financing new solar farms, geothermal projects, EV chargers, and more. They’ll also recycle their funding indefinitely, meaning they will likely last longer than any other provision in the law.

On this week’s show, Rob and Jesse bring you a user’s guide to these new green banks and what they might mean for decarbonization. The episode features two conversations: First, Rob speaks with Jahi Wise, the former director for the Greenhouse Gas Reduction Fund program at the Environmental Protection Agency. Second, Rob and Jesse chat with Dawn Lippert, the founder and CEO of Elemental Impact, a climate tech investment and nonprofit organization. Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University.

Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.

You can also add the show’s RSS feed to your podcast app to follow us directly.

Here is an excerpt from our conversation:

Jesse Jenkins: We’ve talked for a long time about this “valley of death” that companies face as they reach that scale-up phase where they’re coming out of the phase where they’re trying to just prove the technology works and de-risk it and into the phase where they have to deploy at scale and need project financing for that, or they need to build factories to get to economies of scale to produce their product at a competitive cost. And that burns a lot of capital, both, direct equity investment in the company and project finance and loans to get projects built and online. Is that the real gap that you’re seeing right now?

It seems like we’ve had such a big wave of venture capital coming into this space over the last few years that there are a lot of really well capitalized companies through series A or B, but now they’re … you know, if they were stood up two, three, four years ago, now they’re coming into this new phase. Is that where you’re trying to position your fund? And maybe more broadly, the green banks that were supported by GGRF?

Dawn Lippert: Yes — I think, overall, yes. And it’s nuanced. So what we’re seeing is, we published a report earlier this year that there’s essentially this financing gap, if you can think of it that way, or the valley is at least $150 billion, where companies are going from exactly what you said of venture capital-backed and then need other kinds of financing.

And then on the other side of the gap, there’s actually a lot more financing than ever.

Jenkins: Yeah, tons. Infrastructure funds and others, right?

Lippert: Yes, absolutely. And so it’s really about building this bridge and being really smart about that. So I would say there’s a couple of things. One is that we see three main issues to crossing the bridge. One is capital. We’ve talked about that, and I’ll talk about a little bit more. The second is project expertise — companies going from technology companies to project companies. I would say that’s one of the key things that we see as being a real challenge and also a huge opportunity.

And Rob, you talked about talent coming into this space. That tidal wave really changed in 2018 when the skies turned orange over San Francisco. We just saw so much talent coming in from tech, and it just hasn’t stopped. It really kept flowing. But this project expertise of operational expertise — how you develop, how you permit and get entitlements, how you structure the financing, but also just do the actual construction of projects — we need to build so many things. That’s where we see a huge need. And we did a recent analysis with our partners at Vibrant Data Labs and found that only about less than 30% of companies in climate right now have project expertise or deep project expertise on their team to build stuff.

So that’s a place where Elemental has leaned in a ton where we were dropping CFOs and fractional CFOs and developers and residents and all kinds of folks to help fill that gap. But there’s a huge amount of work that needs to be done there.

This episode of Shift Key is sponsored by …

Watershed’s climate data engine helps companies measure and reduce their emissions, turning the data they already have into an audit-ready carbon footprint backed by the latest climate science. Get the sustainability data you need in weeks, not months. Learn more at watershed.com.

As a global leader in PV and ESS solutions, Sungrow invests heavily in research and development, constantly pushing the boundaries of solar and battery inverter technology. Discover why Sungrow is the essential component of the clean energy transition by visiting sungrowpower.com.

Antenna Group helps you connect with customers, policymakers, investors, and strategic partners to influence markets and accelerate adoption. Visit antennagroup.com to learn more.

Music for Shift Key is by Adam Kromelow.

Green

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Energy

Data Centers Have Solved Their Speed-to-Power Problem — With Natural Gas

“Old economy” companies like Caterpillar and Williams are cashing in by selling smaller, less-efficient turbines to impatient developers.

Pipelines and a turbine.
Heatmap Illustration/Getty Images

From the perspective of the stock market, you’re either in the AI business or you’re not. If you build the large language models pushing out the frontiers of artificial intelligence, investors love it. If you rent out the chips the large language models train on, investors love it. If you supply the servers that go in the data centers that power the large language models, investors love it. And, of course, if you design the chips themselves, investors love it.

But companies far from the software and semiconductor industry are profiting from this boom as well. One example that’s caught the market’s fancy is Caterpillar, better known for its scale-defying mining and construction equipment, which has become a “secular winner” in the AI boom, writes Bloomberg’s Joe Weisenthal.

Keep reading...Show less
Blue
AM Briefing

Geothermal Chill

On billions for clean energy, Orsted layoffs, and public housing heat pumps

Gavin Newsom.
Heatmap Illustration/Getty Images

Current conditions: A tropical rainstorm is forming in the Atlantic that’s forecast to barrel along the East Coast through early next week, threatening major coastal flooding and power outages • Hurricane Priscilla is weakening as it tracks northward toward California • The Caucasus region is sweltering in summer-like heat, with the nation of Georgia enduring temperatures of up to 93 degrees Fahrenheit in October.

THE TOP FIVE

1. Two deals worth billions highlight a bright spot for clean energy

Base Power, the Texas power company that leases batteries to homeowners and taps the energy for the grid, on Tuesday announced a $1 billion financing round. The Series C funding is set to supercharge the Austin-based company’s meteoric growth. Since starting just two years ago, Base has deployed more than 100 megawatts of residential battery capacity, making it one of the fastest growing distributed energy companies in the nation. The company now plans to build a factory in the old headquarters of the Austin American-Statesman, the leading daily newspaper in the Texan capital. The funding round included major investors who are increasing their stakes, including Valor Equity Partners, Thrive Capital, and Andreessen Horowitz, and at least nine new venture capital investors, including Lowercarbon, Avenir, and Positive Sum. “The chance to reinvent our power system comes once in a generation,” Zach Dell, chief executive and co-founder of Base Power, said in a statement. “The challenge ahead requires the best engineers and operators to solve it and we’re scaling the team to make our abundant energy future a reality.”

Keep reading...Show less
Green
Ideas

China Can’t Decide if It Wants to Be the World’s First “Electrostate”

The country’s underwhelming new climate pledge is more than just bad news for the world — it reveals a serious governing mistake.

Xi Jinping.
Heatmap Illustration/Getty Images

Five years ago, China’s longtime leader Xi Jinping shocked and delighted the world by declaring in a video presentation to the United Nations that his country would peak its carbon emissions this decade and achieve carbon neutrality by 2060. He tried to rekindle that magic late last month in another virtual address to the UN, announcing China’s updated pledge under the Paris Agreement.

This time, the reaction was far more tepid. Given the disastrous state of American climate policy under President Donald Trump, some observers declared — as the longtime expert Li Shuo did in The New York Timesthat China is “the adult in the room on climate now.” Most others were disappointed, arguing that China had merely “played it safe” and pointing out the new pledge “falls well short” of what’s needed to hit the Paris Agreement’s targets.

Keep reading...Show less
Yellow