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“I don’t think that there has been a slam dunk case on a company that we’re excited about yet.”
At San Francisco Climate Week, everyone wanted to talk about artificial intelligence.
“I was looking through all of the events on SF Climate Week, and it seemed like every single one of them had AI somewhere in the name,” joked (sort of) Rohan Nuttell of OpenAI last week, while moderating a panel called AI for Climate.
Sure, with over 300 events, there were opportunities for climate nerds to learn about carbon dioxide removal or sustainable fashion or grid infrastructure. But AI was inescapable. I heard from companies using AI to monitor flood risk, model forest carbon sequestration, and help utilities identify vulnerabilities from climate threats. I even learned about a company using AI to decarbonize pet food.
Yet one notable section of the climate world wasn’t buying the hype: Investors. In my one-on-one conversations with venture capitalists and other financiers throughout the week, the prevailing approach was wait and see. It was a striking departure from the rest of Silicon Valley, where 6-month-old AI startups are getting multi-billion-dollar valuations.
“I think there are very few large business opportunities that have single-handedly been unlocked,” Sophie Purdom, managing Partner at climate tech VC Planeteer Capital, told me, with regards to AI. “Maybe they make it better or faster or whatnot. But I don’t think we’ve seen a whole lot of new large markets that have suddenly been uniquely unlocked in climate.”
One problem is that AI can mean anything from “we have a machine learning algorithm” to “we use a large language model to help write your climate grant applications,” as this company does. But that distinction is important. Generative AI, which takes in reams of data and spits out brand-new content (think ChatGPT or DALL-E), is what’s been driving the AI hype machine since OpenAI released ChatGPT in November 2022. Eventually, generative AI could have powerful climate implications — think the development of novel EV battery chemistries or synthesis of new, more climate-friendly proteins.
But not quite yet, Shawn Xu, a partner at climate tech VC Lowercarbon Capital, told me.
Xu said he was left disappointed after a Climate AI hackathon that Lowercarbon hosted with OpenAI last year. “To be honest there was a lag between the number of interesting AI engineers and founders who wanted to go build real climate applications coming out of that hackathon.”
In the last couple of months though, Xu has been excited to see AI companies proposing “foundational models” for sectors like materials science and biology. These are generative models trained on large datasets that can perform a wide variety of tasks, like a ChatGPT for meteorology or architecture that could build weather models or design green buildings. “But I don’t think that there has been a slam dunk case on a company that we’re excited about yet,” Xu said.
This doesn’t mean that Lowercarbon and other climate tech investors are avoiding AI investments. There are plenty of well-funded climate tech companies using increasingly powerful machine learning models and algorithms to analyze patterns in large datasets and predict outcomes. It’s just that this isn’t exactly new. Companies across many industries have been using this type of predictive AI for much of the last decade. Now incorporating generative AI in the form of large language models is becoming relatively common too.
“Anything that’s solving workflow inefficiencies, anything that’s helping you get context from somewhere else, anything that’s helping you understand more data,” are well understood applications of AI that Juan Muldoon, a partner at climate software VC Energize Capital, told me he’s excited about.
“I think you’re going to see it materially impact long-running operational costs for [energy] projects,” Scott Jacobs, co-founder and CEO of the sustainable infrastructure investment firm Generate Capital, told me. “It’s just another use of technology replacing humans.”
That doesn’t always make for a particularly flashy business. Muldoon cited one of Energize’s portfolio companies, Jupiter Intelligence, which “takes very, very large amounts of climate, weather, and terrain data to be able to more accurately predict asset level risks associated with particular climate events,” he explained. “So that’s a data AI company. But it’s not really marketed that way.”
Maybe that’s because in this era, the term is almost self-evident. As an old editor once told me, writing that a tech company uses “machine learning” or “AI” to perform data analysis can be as mundane and obvious as advertising that a company uses “the internet.” But as generative AI moves beyond advanced chatbots and towards the type of broader foundational models that Xu is most excited about, investment could heat up.
Xu told me that Lowercarbon has made a yet-unannounced investment in a company that gathers vast amounts of earth observation data, which could hopefully one day be used to create a “foundational model for earth science.” This model could potentially do things such as generate custom maps to track natural disasters or the climate risks to crops and built infrastructure. Xu says a company like this would be “a holy grail.”
Yet the main holdup to some of these “holy grail” companies is that we often lack not only enough data but a comprehensive understanding of how to characterize that data, said Clea Kolster, partner and head of science at Lowercarbon.
“We’ve seen a lot of pitches on AI for chemistry,” she told me. And while AI could spit out new atomic and molecular combinations for use in novel battery cells, “the amount of those new things that are actually going to be good is probably very small until you actually start to have a better understanding of how many of these materials work in different structures and environments.”
Even if scientists and researchers get a better handle on the datasets they’re working with, Purdom told me she’s generally skeptical of investing in companies that use AI to do basic R&D, citing the buzzy example of AI being used in critical minerals exploration and extraction “The competency of the prospecting and the R&D approach seems distinct to me from the actual value extraction, physical resource extraction part of the business,” she told me. The same could be said of using AI for battery design or protein development. “I have seen few examples where the platform approach of just the research and identification part is where there’s been a big standalone business.”
Not to say everyone takes that point of view. Bay Area-based KoBold Metals, an AI-enabled minerals exploration company, has raised over a billion dollars, with Bill Gates’ climate tech VC, Breakthrough Energy Ventures as a leading investor.
But overall, the potential for novel applications of AI in the climate space is still largely being figured out. And in these early stages, many climate investors are treading carefully.
“I have talked to a number of these AI companies,” Jacobs told me. “They’re talking about climate impacts and they have real value propositions that they’re going after. Great! But they don’t have real success stories yet.”
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The nonprofit laid off 36 employees, or 28% of its headcount.
The Trump administration’s funding freeze has hit the leading electrification nonprofit Rewiring America, which announced Thursday that it will be cutting its workforce by 28%, or 36 employees. In a letter to the team, the organization’s cofounder and CEO Ari Matusiak placed the blame squarely on the Trump administration’s attempts to claw back billions in funding allocated through the Greenhouse Gas Reduction Fund.
“The volatility we face is not something we created: it is being directed at us,” Matusiak wrote in his public letter to employees. Along with a group of four other housing, climate, and community organizations, collectively known as Power Forward Communities, Rewiring America was the recipient of a $2 billion GGRF grant last April to help decarbonize American homes.
Now, the future of that funding is being held up in court. GGRF funds have been frozen since mid-February as Lee Zeldin’s Environmental Protection Agency has tried to rescind $20 billion of the program’s $27 billion total funding, an effort that a federal judge blocked in March. While that judge, Tanya S. Chutkan, called the EPA’s actions “arbitrary and capricious,” for now the money remains locked up in a Citibank account. This has wreaked havoc on organizations such as Rewiring America, which structured projects and staffing decisions around the grants.
“Since February, we have been unable to access our competitively and lawfully awarded grant dollars,” Matusiak wrote in a LinkedIn post on Thursday. “We have been the subject of baseless and defamatory attacks. We are facing purposeful volatility designed to prevent us from fulfilling our obligations and from delivering lower energy costs and cheaper electricity to millions of American households across the country.”
Matusiak wrote that while “Rewiring America is not going anywhere,” the organization is planning to address said volatility by tightening its focus on working with states to lower electricity costs, building a digital marketplace for households to access electric upgrades, and courting investment from third parties such as hyperscale cloud service providers, utilities, and manufacturers. Matusiak also said Rewiring America will be restructured “into a tighter formation,” such that it can continue to operate even if the GGRF funding never comes through.
Power Forward Communities is also continuing to fight for its money in court. Right there with it are the Climate United Fund and the Coalition for Green Capital, which were awarded nearly $7 billion and $5 billion, respectively, through the GGRF.
What specific teams within Rewiring America are being hit by these layoffs isn’t yet clear, though presumably everyone let go has already been notified. As the announcement went live Thursday afternoon, it stated that employees “will receive an email within the next few minutes informing you of whether your role has been impacted.”
“These are volatile and challenging times,” Matusiak wrote on LinkedIn. “It remains on all of us to create a better world we can all share. More so than ever.”
A battle ostensibly over endangered shrimp in Kentucky
A national park is fighting a large-scale solar farm over potential impacts to an endangered shrimp – what appears to be the first real instance of a federal entity fighting a solar project under the Trump administration.
At issue is Geenex Solar’s 100-megawatt Wood Duck solar project in Barren County, Kentucky, which would be sited in the watershed of Mammoth Cave National Park. In a letter sent to Kentucky power regulators in April, park superintendent Barclay Trimble claimed the National Park Service is opposing the project because Geenex did not sufficiently answer questions about “irreversible harm” it could potentially pose to an endangered shrimp that lives in “cave streams fed by surface water from this solar project.”
Trimble wrote these frustrations boiled after “multiple attempts to have a dialogue” with Geenex “over the past several months” about whether battery storage would exist at the site, what sorts of batteries would be used, and to what extent leak prevention would be considered in development of the Wood Duck project.
“The NPS is choosing to speak out in opposition of this project and requesting the board to consider environmental protection of these endangered species when debating the merits of this project,” stated the letter. “We look forward to working with the Board to ensure clean water in our national park for the safety of protection of endangered species.”
On first blush, this letter looks like normal government environmental stewardship. It’s true the cave shrimp’s population decline is likely the result of pollution into these streams, according to NPS data. And it was written by career officials at the National Park Service, not political personnel.
But there’s a few things that are odd about this situation and there’s reason to believe this may be the start of a shift in federal policy direction towards a more critical view of solar energy’s environmental impacts.
First off, Geenex has told local media that batteries are not part of the project and that “several voicemails have been exchanged” between the company and representatives of the national park, a sign that the company and the park have not directly spoken on this matter. That’s nothing like the sort of communication breakdown described in the letter. Then there’s a few things about this letter that ring strange, including the fact Fish and Wildlife Service – not the Park Service – ordinarily weighs in on endangered species impacts, and there’s a contradiction in referencing the Endangered Species Act at a time when the Trump administration is trying to significantly pare back application of the statute in the name of a faster permitting process. All of this reminds me of the Trump administration’s attempts to supposedly protect endangered whales by stopping offshore wind projects.
I don’t know whether this solar farm’s construction will indeed impact wildlife in the surrounding area. Perhaps it may. But the letter strikes me as fascinating regardless, given the myriad other ways federal agencies – including the Park Service – are standing down from stringent environmental protection enforcement under Trump 2.0.
Notably, I reviewed the other public comments filed against the project and they cite a litany of other reasons – but also state that because the county itself has no local zoning ordinance, there’s no way for local residents or municipalities opposed to the project to really stop it. Heatmap Pro predicts that local residents would be particularly sensitive to projects taking up farmland and — you guessed it — harming wildlife.
Barren County is in the process of developing a restrictive ordinance in the wake of this project, but it won’t apply to Wood Duck. So opponents’ best shot at stopping this project – which will otherwise be online as soon as next year – might be relying on the Park Service to intervene.
And more on the week’s most important conflicts around renewable energy.
1. Dukes County, Massachusetts – The Supreme Court for the second time declined to take up a legal challenge to the Vineyard Wind offshore project, indicating that anti-wind activists' efforts to go directly to the high court have run aground.
2. Brooklyn/Staten Island, New York – The battery backlash in the NYC boroughs is getting louder – and stranger – by the day.
3. Baltimore County, Maryland – It’s Ben Carson vs. the farmer near Baltimore, as a solar project proposed on the former Housing and Urban Development secretary’s land is coming under fire from his neighbors.
4. Mecklenburg County, Virginia – Landowners in this part of Virginia have reportedly received fake “good neighbor agreement” letters claiming to be from solar developer Longroad Energy, offering large sums of cash to people neighboring the potential project.
5. York County, South Carolina – Silfab Solar is now in a bitter public brawl with researchers at the University of South Carolina after they released a report claiming that a proposed solar manufacturing plant poses a significant public risk in the event of a chemical emissions release.
6. Jefferson Davis County, Mississippi – Apex Clean Energy’s Bluestone Solar project was just approved by the Mississippi Public Service Commission with no objections against the project.
7. Plaquemine Parish, Louisiana – NextEra’s Coastal Prairie solar project got an earful from locals in this parish that sits within the Baton Rouge metro area, indicating little has changed since the project was first proposed two years ago.
8. Huntington County, Indiana – Well it turns out Heatmap’s Most At-Risk Projects of the Energy Transition has been right again: the Paddlefish solar project has now been indefinitely blocked by this county under a new moratorium on the project area in tandem with a new restrictive land use ordinance on solar development overall.
9. Albany County, Wyoming – The Rail Tie wind farm is back in the news again, as county regulators say landowners feel misled by Repsol, the project’s developer.
10. Klickitat County, Washington – Cypress Creek Renewables is on a lucky streak with a solar project near Goldendale, Washington, getting to bypass local opposition from the nearby Yakama Nation.
11. Pinal County, Arizona – A large utility-scale NextEra solar farm has been rejected by this county’s Board of Supervisors.