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The case for funding fusion
Digital technologies have disrupted the structure of markets with unprecedented breadth and scale. Today, there is yet another wave of innovation emerging, and that is the decarbonization of the global economy.
While governments still lack the conviction necessary to truly fight the climate crisis, the overall direction is clear. The carbon price in Europe rose from below $10 to over $50 per ton. Shell was handed a resounding defeat by a Dutch court. The major blackout in Texas at the beginning of the year revealed the fragility of the existing energy supply even in a highly industrialized country. We must urgently invest more into developing and deploying reliable, clean electricity generation technologies to make decarbonization a reality.
Forward-thinking investors understand this. Global investment in low-carbon technologies climbed to $500 billion in 2020, according to Bloomberg. Renewable energy accounted for around $300 billion of that, followed by electrification of transport ($140 billion) and heating ($50 billion).
However, we remain far from the finish line. According to the International Energy Agency, global emissions of CO2 this year are set to jump 1.5 billion tons over 2020 levels. And more than 80% of global energy consumption is still made up of coal, oil and gas.
Fusion, the process that powers the stars, could be the cleanest energy source for humanity.
That’s why we need to continue backing new technologies with breakthrough potential. Of particular promise is nuclear fusion. Fusion, the process that powers the stars, could be the cleanest energy source for humanity. We are already indirectly harvesting the power of fusion through solar energy. Being able to build fusion reactors would give us an “always on” version, independent of weather conditions.
But why fund fusion at all, given that we don’t yet know how to do it? First, this isn’t an either-or proposition. We can afford to build out renewable energy and investigate new forms of energy production at the same time because the latter — at least at this early stage of development — will require a comparatively trivial amount of money. The U.S. government’s latest plan is to spend $174 billion over 10 years on the electrification of car transport alone, so to invest $2 billion to create a fusion power plant seems doable.
Second, we are about to need a lot more electricity than we ever have. The global demand for carbon-free energy sources is set to triple by 2050, driven by increasing urbanization, the electrification of industrial processes, the loss of biodiversity and the increase in energy consumption in emerging markets.
Third, there’s been tremendous progress in the necessary supporting technologies. Superconducting magnets for the magnetic-confinement approach to fusion have become much cheaper, lasers for inertial confinement fusion have become much more powerful, and breakthroughs in material science have made nanostructured targets available, which enable the use of completely new approaches to fusion, such as the low-neutronic fuel pB11.
Thankfully, there is a growing number of entrepreneurial efforts from world-class teams to try and build fusion. At least 25 startups around the world are targeting fusion right now, approaching the problem with a wide range of technologies. The amount invested in private fusion companies across the world increased tenfold to almost $1 billion in 2020, according to Crunchbase.
The upside of successful fusion is nearly unlimited. The clean energy generation market represents a trillion-dollar opportunity. An estimated 26 TW of primary energy capacity needs to be built globally from 2030 to 2050 to serve the rising global energy needs, according to Materials Research Society. Just 1 TW of capacity will generate $300 billion in revenue, and a 15% market share from 2030 to 2050 would yield more than $1 trillion in annual revenue.
We need many shots on goal here, which is why Susan Danziger and I have personally invested in three different fusion startups already (Zap Energy and Avalanche in the United States and Marvel Fusion in Germany).
But it is not primarily the potential for financial upside that motivates us: There is an opportunity to make an indelible difference in the trajectory of human history. If even a small fraction of the large wealth accumulated by entrepreneurs and investors in the last couple of decades is invested here, the likelihood of successful fusion rises dramatically. That, in turn, will unlock much more investment from both venture funds and governments.
Now is the time to go all-in on decarbonization. Funding fusion with its breakthrough potential must be part of that effort.
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Dabbel gets $4.4M to cut CO2 by automating HVAC for commercial buildings
Düsseldorf-based proptech startup Dabbel is using AI to drive energy efficiency savings in commercial buildings.
It’s developed cloud-based self-learning building management software that plugs into the existing building management systems (BMS) — taking over control of heating and cooling systems in a way that’s more dynamic than legacy systems based on fixed set-point resets.
Dabbel says its AI considers factors such as building orientation and thermal insulation, and reviews calibration decisions every five minutes — meaning it can respond dynamically to changes in outdoor and indoor conditions.
The 2018-founded startup claims this approach of layering AI-powered predictive modelling atop legacy BMS to power next-gen building automation is able to generate substantial energy savings — touting reductions in energy consumption of up to 40%.
“Every five minutes Dabbel reviews its decisions based on all available data,” explains CEO and co-founder, Abel Samaniego. “With each iteration, Dabbel improves or adapts and changes its decisions based on the current circumstances inside and outside the building. It does this by using cognitive artificial intelligence to drive a Model-Based Predictive Control (MPC) System… which can dynamically adjust all HVAC setpoints based on current/future conditions.”
In essence, the self-learning system predicts ahead of time the tweaks that are needed to adapt for future conditions — saving energy vs a pre-set BMS that would keep firing the boilers for longer.
The added carrot for commercial building owners (or tenants) is that Dabbel squeezes these energy savings without the need to rip and replace legacy systems — nor, indeed, to install lots of IoT devices or sensor hardware to create a ‘smart’ interior environment; the AI integrates with (and automatically calibrates) the existing heating, ventilation, and air conditioning (HVAC) systems.
All that’s needed is Dabbel’s SaaS — and less than a week for the system to be implemented (it also says installation can be done remotely).
“There are no limitations in terms of Heating and Cooling systems,” confirms Samaniego, who has a background in industrial engineering and several years’ experience automating high tech plants in Germany. “We need a building with a Building Management System in place and ideally a BACnet communication protocol.”
Average reductions achieved so far across the circa 250,000m² of space where its AI is in charge of building management systems are a little more modest but a still impressive 27%. (He says the maximum savings seen at some “peak times” is 42%.)
The touted savings aren’t limited to a single location or type of building/client, according to Dabbel, which says they’ve been “validated across different use cases and geographies spanning Europe, the U.S., China, and Australia”.
Early clients are facility managers of large commercial buildings — Commerzbank clearly sees potential, having incubated the startup via its early-stage investment arm — and several schools.
A further 1,000,000m² is in the contract or offer phase — slated to be installed “in the next six months”.
Dabbel envisages its tech being useful to other types of education institutions and even other use-cases. (It’s also toying with adding a predictive maintenance functionality to expand its software’s utility by offering the ability to alert building owners to potential malfunctions ahead of time.)
And as policymakers around the global turn their attention to how to achieve the very major reductions in carbon emissions that are needed to meet ambitious climate goals the energy efficiency of buildings certainly can’t be overlooked.
“The time for passive responses to addressing the critical issue of carbon emission reduction is over,” said Samaniego in a statement. “That is why we decided to take matters into our own hands and develop a solution that actively replaces a flawed human-based decision-making process with an autonomous one that acts with surgical precision and thanks to artificial intelligence, will only improve with each iteration.”
If the idea of hooking your building’s heating/cooling up to a cloud-based AI sounds a tad risky for Internet security reasons, Dabbel points out it’s connecting to the BMS network — not the (separate) IT network of the company/building.
It also notes that it uses one-way communication via a VPN tunnel — “creating an end-to-end encrypted connection under high market standards”, as Samaniego puts it.
The startup has just closed a €3.6 million (~$4.4M) pre-Series A funding round led by Target Global, alongside main incubator (Commerzbank’s early-stage investment arm), SeedX, plus some strategic angel investors.
Commenting in a statement, Dr. Ricardo Schaefer, partner at Target Global, added: “We are enthusiastic to work with the team at Dabbel as they offer their clients a tangible and frictionless way to significantly reduce their carbon footprint, helping to close the gap between passive measurement and active remediation.”
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Crusoe Energy is tackling energy use for cryptocurrencies and data centers and greenhouse gas emissions
The two founders of Crusoe Energy think they may have a solution to two of the largest problems facing the planet today — the increasing energy footprint of the tech industry and the greenhouse gas emissions associated with the natural gas industry.
Crusoe, which uses excess natural gas from energy operations to power data centers and cryptocurrency mining operations, has just raised $128 million in new financing from some of the top names in the venture capital industry to build out its operations — and the timing couldn’t be better.
Methane emissions are emerging as a new area of focus for researchers and policymakers focused on reducing greenhouse gas emissions and keeping global warming within the 1.5 degree target set under the Paris Agreement. And those emissions are just what Crusoe Energy is capturing to power its data centers and bitcoin mining operations.
The reason why addressing methane emissions is so critical in the short term is because these greenhouse gases trap more heat than their carbon dioxide counterparts and also dissipate more quickly. So dramatic reductions in methane emissions can do more in the short term to alleviate the global warming pressures that human industry is putting on the environment.
And the biggest source of methane emissions is the oil and gas industry. In the U.S. alone roughly 1.4 billion cubic feet of natural gas is flared daily, said Chase Lochmiller, a co-founder of Crusoe Energy. About two-thirds of that is flared in Texas, with another 500 million cubic feet flared in North Dakota, where Crusoe has focused its operations to date.
For Lochmiller, a former quant trader at some of the top American financial services institutions, and Cully Cavness, a third generation oil and gas scion, the ability to capture natural gas and harness it for computing operations is a natural combination of the two men’s interests in financial engineering and environmental preservation.
NEW TOWN, ND – AUGUST 13: View of three oil wells and flaring of natural gas on The Fort Berthold Indian Reservation near New Town, ND on August 13, 2014. About 100 million dollars’ worth of natural gas burns off per month because a pipeline system isn’t in place yet to capture and safely transport it. The Three Affiliated Tribes on Fort Berthold represent Mandan, Hidatsa and Arikara Nations. It’s also at the epicenter of the fracking and oil boom that has brought oil royalties to a large number of Native Americans living there. (Photo by Linda Davidson / The Washington Post via Getty Images)
The two Denver natives met in prep-school and remained friends. When Lochmiller left for MIT and Cavness headed off to Middlebury they didn’t know that they’d eventually be launching a business together. But through Lochmiller’s exposure to large-scale computing and the financial services industry, and Cavness’ assumption of the family business, they came to the conclusion that there had to be a better way to address the massive waste associated with natural gas.
Conversation around Crusoe Energy began in 2018 when Lochmiller and Cavness went climbing in the Rockies to talk about Lochmiller’s trip to Mt. Everest.
When the two men started building their business, the initial focus was on finding an environmentally friendly way to deal with the energy footprint of bitcoin mining operations. It was this pitch that brought the company to the attention of investors at Polychain, the investment firm started by Olaf Carlson-Wee (and Lochmiller’s former employer), and investors like Bain Capital Ventures and new investor Valor Equity Partners.
(This was also the pitch that Lochmiller made to me to cover the company’s seed round. At the time I was skeptical of the company’s premise and was worried that the business would just be another way to prolong the use of hydrocarbons while propping up a cryptocurrency that had limited actual utility beyond a speculative hedge against governmental collapse. I was wrong on at least one of those assessments.)
“Regarding questions about sustainability, Crusoe has a clear standard of only pursuing projects that are net reducers of emissions. Generally the wells that Crusoe works with are already flaring and would continue to do so in the absence of Crusoe’s solution. The company has turned down numerous projects where they would be a buyer of low-cost gas from a traditional pipeline because they explicitly do not want to be net adders of demand and emissions,” wrote a spokesman for Valor Equity in an email. “In addition, mining is increasingly moving to renewables and Crusoe’s approach to stranded energy can enable better economics for stranded or marginalized renewables, ultimately bringing more renewables into the mix. Mining can provide an interruptible base load demand that can be cut back when grid demand increases, so overall the effect to incentivize the addition of more renewable energy sources to the grid.”
Other investors have since piled on, including: Lowercarbon Capital, DRW Ventures, Founders Fund, Coinbase Ventures, KCK Group, Upper90, Winklevoss Capital, Zigg Capital and Tesla co-founder JB Straubel.
The company now operates 40 modular data centers powered by otherwise wasted and flared natural gas throughout North Dakota, Montana, Wyoming and Colorado. Next year that number should expand to 100 units as Crusoe enters new markets such as Texas and New Mexico. Since launching in 2018, Crusoe has emerged as a scalable solution to reduce flaring through energy intensive computing, such as bitcoin mining, graphical rendering, artificial intelligence model training and even protein folding simulations for COVID-19 therapeutic research.
Crusoe boasts 99.9% combustion efficiency for its methane, and is also bringing additional benefits in the form of new networking buildout at its data center and mining sites. Eventually, this networking capacity could lead to increased connectivity for rural communities surrounding the Crusoe sites.
Currently, 80% of the company’s operations are being used for bitcoin mining, but there’s increasing demand for use in data center operations, and some universities, including Lochmiller’s alma mater of MIT, are looking at the company’s offerings for their own computing needs.
“That’s very much in an incubated phase right now,” said Lochmiller. “A private alpha where we have a few test customers… we’ll make that available for public use later this year.”
Crusoe Energy Systems should have the lowest data center operating costs in the world, according to Lochmiller and while the company will spend money to support the infrastructure buildout necessary to get the data to customers, those costs are negligible when compared to energy consumption, Lochmiller said.
The same holds true for bitcoin mining, where the company can offer an alternative to coal-powered mining operations in China and the construction of new renewable capacity that wouldn’t be used to service the grid. As cryptocurrencies look for a way to blunt criticism about the energy usage involved in their creation and distribution, Crusoe becomes an elegant solution.
Institutional and regulatory tailwinds are also propelling the company forward. Recently New Mexico passed new laws limiting flaring and venting to no more than 2% of an operator’s production by April of next year, and North Dakota is pushing for incentives to support on-site flare capture systems while Wyoming signed a law creating incentives for flare gas reduction applied to bitcoin mining. The world’s largest financial services firms are also taking a stand against flare gas with BlackRock calling for an end to routine flaring by 2025.
“Where we view our power consumption, we draw a very clear line in our project evaluation stage where we’re reducing emissions for an oil and gas projects,” Lochmiller said.
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Immersion cooling to offset data centers’ massive power demands gains a big booster in Microsoft
LiquidStack does it. So does Submer. They’re both dropping servers carrying sensitive data into goop in an effort to save the planet. Now they’re joined by one of the biggest tech companies in the world in their efforts to improve the energy efficiency of data centers, because Microsoft is getting into the liquid-immersion cooling market.
Microsoft is using a liquid it developed in-house that’s engineered to boil at 122 degrees Fahrenheit (lower than the boiling point of water) to act as a heat sink, reducing the temperature inside the servers so they can operate at full power without any risks from overheating.
The vapor from the boiling fluid is converted back into a liquid through contact with a cooled condenser in the lid of the tank that stores the servers.
“We are the first cloud provider that is running two-phase immersion cooling in a production environment,” said Husam Alissa, a principal hardware engineer on Microsoft’s team for datacenter advanced development in Redmond, Washington, in a statement on the company’s internal blog.
While that claim may be true, liquid cooling is a well-known approach to dealing with moving heat around to keep systems working. Cars use liquid cooling to keep their motors humming as they head out on the highway.
As technology companies confront the physical limits of Moore’s Law, the demand for faster, higher performance processors mean designing new architectures that can handle more power, the company wrote in a blog post. Power flowing through central processing units has increased from 150 watts to more than 300 watts per chip and the GPUs responsible for much of Bitcoin mining, artificial intelligence applications and high end graphics each consume more than 700 watts per chip.
It’s worth noting that Microsoft isn’t the first tech company to apply liquid cooling to data centers and the distinction that the company uses of being the first “cloud provider” is doing a lot of work. That’s because bitcoin mining operations have been using the tech for years. Indeed, LiquidStack was spun out from a bitcoin miner to commercialize its liquid immersion cooling tech and bring it to the masses.
“Air cooling is not enough”
More power flowing through the processors means hotter chips, which means the need for better cooling or the chips will malfunction.
“Air cooling is not enough,” said Christian Belady, vice president of Microsoft’s datacenter advanced development group in Redmond, in an interview for the company’s internal blog. “That’s what’s driving us to immersion cooling, where we can directly boil off the surfaces of the chip.”
For Belady, the use of liquid cooling technology brings the density and compression of Moore’s Law up to the datacenter level
The results, from an energy consumption perspective, are impressive. The company found that using two-phase immersion cooling reduced power consumption for a server by anywhere from 5 percent to 15 percent (every little bit helps).
Microsoft investigated liquid immersion as a cooling solution for high performance computing applications such as AI. Among other things, the investigation revealed that two-phase immersion cooling reduced power consumption for any given server by 5% to 15%.
Meanwhile, companies like Submer claim they reduce energy consumption by 50%, water use by 99%, and take up 85% less space.
For cloud computing companies, the ability to keep these servers up and running even during spikes in demand, when they’d consume even more power, adds flexibility and ensures uptime even when servers are overtaxed, according to Microsoft.
“[We] know that with Teams when you get to 1 o’clock or 2 o’clock, there is a huge spike because people are joining meetings at the same time,” Marcus Fontoura, a vice president on Microsoft’s Azure team, said on the company’s internal blog. “Immersion cooling gives us more flexibility to deal with these burst-y workloads.”
At this point, data centers are a critical component of the internet infrastructure that much of the world relies on for… well… pretty much every tech-enabled service. That reliance however has come at a significant environmental cost.
“Data centers power human advancement. Their role as a core infrastructure has become more apparent than ever and emerging technologies such as AI and IoT will continue to drive computing needs. However, the environmental footprint of the industry is growing at an alarming rate,” Alexander Danielsson, an investment manager at Norrsken VC noted last year when discussing that firm’s investment in Submer.
Solutions under the sea
If submerging servers in experimental liquids offers one potential solution to the problem — then sinking them in the ocean is another way that companies are trying to cool data centers without expending too much power.
Microsoft has already been operating an undersea data center for the past two years. The company actually trotted out the tech as part of a push from the tech company to aid in the search for a COVID-19 vaccine last year.
These pre-packed, shipping container-sized data centers can be spun up on demand and run deep under the ocean’s surface for sustainable, high-efficiency and powerful compute operations, the company said.
The liquid cooling project shares most similarity with Microsoft’s Project Natick, which is exploring the potential of underwater datacenters that are quick to deploy and can operate for years on the seabed sealed inside submarine-like tubes without any onsite maintenance by people.
In those data centers nitrogen air replaces an engineered fluid and the servers are cooled with fans and a heat exchanger that pumps seawater through a sealed tube.
Startups are also staking claims to cool data centers out on the ocean (the seaweed is always greener in somebody else’s lake).
Nautilus Data Technologies, for instance, has raised over $100 million (according to Crunchbase) to develop data centers dotting the surface of Davey Jones’ Locker. The company is currently developing a data center project co-located with a sustainable energy project in a tributary near Stockton, Calif.
With the double-immersion cooling tech Microsoft is hoping to bring the benefits of ocean-cooling tech onto the shore. “We brought the sea to the servers rather than put the datacenter under the sea,” Microsoft’s Alissa said in a company statement.
Ioannis Manousakis, a principal software engineer with Azure (left), and Husam Alissa, a principal hardware engineer on Microsoft’s team for datacenter advanced development (right), walk past a container at a Microsoft datacenter where computer servers in a two-phase immersion cooling tank are processing workloads. Photo by Gene Twedt for Microsoft.
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Spinning out from the cryptocurrency hardware developer Bitfury, LiquidStack pitches a data center cooling tech
Data centers and bitcoin mining operations are becoming huge energy hogs, and the explosive growth of both risks undoing a lot of the progress that’s been made to reduce global greenhouse gas emissions. It’s one of the major criticisms of cryptocurrency operations and something that many in the industry are trying to address.
Enter LiquidStack, a company that’s spinning out from the cryptocurrency hardware technology developer Bitfury Group with a $10 million investment.
The company, which was formerly known as Allied Control Limited, restructured as a commercial operating company headquartered in the Netherlands with commercial operations in the U.S. and research and development in Hong Kong, according to a statement.
It was first acquired by Bitfury in 2015 after building a two-phase immersion cooling 500kW data center in Hong Kong, that purportedly cut energy consumption by 95% versus traditional air cooling technologies. Later, the companies jointly deployed 160 megawatts of two-phase immersion-cooled data centers.
“Bitfury has been innovating across multiple industries and sees major growth opportunities with LiquidStack’s game-changing cooling solutions for compute-intensive applications and infrastructure,” said Valery Vavilov, CEO of Bitfury. “I believe LiquidStack’s leadership team, together with our customers and strategic support from Wiwynn, will rapidly accelerate the global adoption and deployment of two-phase immersion cooling.”
The $10 million in funding came from the Taiwanese conglomerate Wiwynn, a data center and infrastructure developer with revenues of $6.3 billion last year.
“Wiwynn continues to invest in advanced cooling solutions to address the challenges of fast-growing power consumption and density for cloud computing, AI, and HPC,” said Emily Hong, chief executive of Wiwynn, in a statement.
In a statement, LiquidStack said its technology could enable at least 21 times more heat rejection per IT rack compared to air cooling — all without the need for water. The company said its cooling method results in a 41% reduction in energy used for cooling and a 60% reduction in data center space.
“Bitfury has always been focused on leading by example and is a technology driven company from the top of the organization, to its grass roots,” said Joe Capes, co-founder and chief executive of LiquidStack, in a statement. “Launching LiquidStack with new funding enables us to focus on our strengths and capabilities, accelerating the development of liquid cooling technology, products and services to help solve real thermal and sustainability challenges driven by the adoption of cloud services, AI, edge and high-performance computing.”
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Norrsken Foundation is closing on an oversubscribed impact venture fund at €125 million
About four years ago, social impact organization Norrsken Foundation launched a small program investing around €30 million in capital it had received from its wealthy patron, Klarna co-founder Niklas Adalberth.
Now, that initiative has become its own impact investment firm, Norrsken VC and, according to people familiar with the firm, is about to close on its first independent investment vehicle — a €125 million ($149) fund focused on investing in startups that are, as its website suggests, “solving the world’s biggest problems.”
Norrsken VC did not respond for a request for comment about the firm’s fundraising plans.
Already, the young firm has invested in companies that would be standouts among any venture capital portfolio. Norrsken VC is one of the early backers behind Northvolt, which just received a $14 billion order for its batteries for electric vehicles from Volkswagen.
Electrification is actually a big theme for the early-stage firm, which counts the electric plane technology developer, Heart Aerospace, and autonomous electric vehicle developer Einride, and the battery monitoring and data management startup, Nortical, among its other portfolio companies.
Einride scored another huge coup recently. TechCrunch reported that the company was close to closing on $75 million in new funding even as it explored a potential SPAC for its business.
Indeed, Norrsken Foundation’s work in investing presaged a surge in climate and sustainability-focused activity from both venture investors, public markets and entrepreneurs looking at how to aid in the transition from fossil fuels to renewable resources and other zero carbon sources of energy.
That thesis on energy consumption extends to other areas of the firm’s portfolio, including companies like the energy efficient data center designer and technology developer, Submer.
If electrification and efficiency are one area of focus in the climate fight, Norrsken has also made moves to combat waste and improve efficiency in the food chain, as well. It’s probably the largest area of focus for the firm’s current portfolio outside of electrification, and there appear to be some early winners emerging in that category.
Those range from startups focused on agriculture like WeFarm and Ignitia, to consumer waste in the food industry through investments in Olio, Matsmart and Whywaste.
Taken together the climate and sustainability thesis has been the largest and most opportune investment target, but healthcare and wellness are also within the firm’s investment mandate. Startups like Winningtemp are an interesting indication of the firm’s thesis. That startup provides ways to monitor and support employees’ mental health.
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Firms backed by Robert Downey Jr. and Bill Gates have funded an electric motor company that slashes energy consumption
Sometimes the smallest innovations can have the biggest impacts on the world’s efforts to stop global climate change. Arguably, one of the biggest contributors in the fight against climate change to date has been the switch to the humble LED light, which has slashed hundreds of millions of tons of carbon dioxide emissions simply by reducing energy consumption in buildings.
And now firms backed by Robert Downey Jr. and Bill Gates are joining investors like Amazon and iPod inventor Tony Fadell to pour money into a company called Turntide Technologies that believes it has the next great innovation in the world’s efforts to slow global climate change — a better electric motor.
It’s not as flashy as an arc reactor, but like light bulbs, motors are a ubiquitous and wholly unglamorous technology that have been operating basically the same way since the nineteenth century. And, like the light bulb, they’re due for an upgrade.
“Turntide’s technology and approach to restoring our planet will directly reduce energy consumption,” said Steve Levin, the co-founder (along with Downey Jr. ) of FootPrint Coalition.
The operation of buildings is responsible for 40% of CO2 emissions worldwide, Turntide noted in a statement. And, according to the U.S. Department of Energy (DOE), one-third of energy used in commercial buildings is wasted. Smart building technology adds an intelligent layer to eliminate this waste and inefficiency by automatically controlling lighting, air conditioning, heating, ventilation and other essential systems and Turntide’s electric motors can add additional savings.
That’s why investors have put over $100 million into Turntide in just the last six months.
PARIS, FRANCE – JUNE 16: Tony Fadell, inventor of the iPod and founder and former CEO of Nest, attends a conference during Viva Technology at Parc des Expositions Porte de Versailles on June 16, 2017 in Paris, France. Viva Technology is a fair that brings together, for the second year, major groups and startups around all the themes of innovation. (Photo by Christophe Morin/IP3/Getty Images)
The company, led by chief executive and chairman Ryan Morris, is commercializing technology that was developed initially at the Illinois Institute of Technology.
Turntide’s basic innovation is a software-controlled motor, or switch reluctance motor, that uses precise pulses of energy instead of a constant flow of electricity. “In a conventional motor you are continuously driving current into the motor whatever speed you want to run it at,” Morris said. “We’re pulsing in precise amounts of current just at the times when you need the torque… It’s software-defined hardware.”
The technology spent 11 years under development, in part because the computing power didn’t exist to make the system work, according to Morris.
Morris was initially part of an investment firm called Meson Capital that acquired the technology back in 2013, and it was another four years of development before the motors were actually able to function in pilots, he said. The company spent the last three years developing the commercialization strategy and proving the value in its initial market — retrofitting the heating ventilation and cooling systems in buildings that are the main factor in the built environment’s 28% contribution to carbon dioxide emissions that are leading to global climate change.
“Our mission is to replace all of the motors in the world,” Morris said.
He estimates that the technology is applicable to 95% of where electric motors are used today, but the initial focus will be on smart buildings because it’s the easiest place to start and can have some of the largest immediate impact on energy usage.
“The carbon impact of what we’re doing is pretty massive,” Morris told me last year. “The average energy reduction [in buildings] has been a 64% reduction. If we can replace all the motors in buildings in the U.S. that’s the carbon equivalent of adding over 300 million tons of carbon sequestration per year.”
That’s why Downey Jr.’s Footprint Coalition, and Bill Gates’ Breakthrough Energy Ventures and the real estate and construction-focused venture firm Fifth Wall Ventures have joined the Amazon Climate Fund, Tony Fadell’s Future Shape, BMW’s iVentures fund and a host of other investors in backing the company.
The company has raised roughly $180 million in financing, including the disclosure today of an $80 million investment round, which closed in October.
Buildings are clearly the current focus for Turntide, which only yesterday announced the acquisition of a small Santa Barbara, California-based building management software developer called Riptide IO. But there’s also an application in another massive industry — electric vehicles.
“Two years from now we will definitely be in electric vehicles,” Morris said.
“Our technology has huge advantages for the electric vehicle industry. There’s no rare earth minerals. Every EV uses rare earth minerals to get better performance of their electric motors,” he continued. “They’re expensive, destructive to mine and China controls 95% of the global supply chain for them. We do not use any exotic materials, rare earth minerals or magnets… We’re replacing that with very advanced software and computation. It’s the first time Moore’s law applies to the motor.”
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New York’s David Energy has raised $4.1 million to ‘build the Standard Oil of renewable energy’
“We intend to build the Standard Oil of renewable energy,” said James McGinniss, the co-founder and chief executive of David Energy, in a statement announcing the company’s new $19 million seed round of debt and equity funding.
McGinniss’ company is aiming to boost renewable energy adoption and slash energy usage in the built environment by creating a service that operates on both sides of the energy marketplace.
The company combines energy management services for commercial buildings through the software it has developed with the ability to sell energy directly to customers in an effort to reduce the energy consumption and the attendant carbon footprint of the built environment.
The company’s software, Mycor, leverages building demand data and the assets that the building has at its disposal to shift user energy consumption to the times when renewable power is most available, and cheapest.
It’s a novel approach to an old idea of creating environmental benefits by reducing energy consumption. Using its technology, David Energy tracks both the market price of energy and the energy usage by the buildings it manages. The company sells energy to customers at a fixed price and then uses its windows into energy markets and energy demand to make money off the difference in power pricing.
That’s why the company needed to raise $15 million in a monthly revolving credit facility from Hartree Partners. So it could pay for the power its customers have bought upfront.
Image Credits: Getty Images
There are a number of tailwinds supporting the growth of a business like David Energy right now. Given the massive amounts of money that are being earmarked for energy conservation and energy efficiency upgrades, companies like David, which promise to manage energy consumption to reduce demand, are going to be huge beneficiaries.
“Looking at the macro shift and the attention being paid to things like battery storage and micro grids we do feel like we’re launching this at the perfect time,” said McGinniss. “We’re offering [customers] market rates and then rebating the savings back to them. They’re getting the software with a market energy supply contract and they are getting the savings back. Bringing that whole bundled package together really brings it all together.”
In addition to the credit facility, the company also raised $4.1 million in venture financing from investors led by Equal Ventures and including Operator Partners, Box Group, Greycroft, Sandeep Jain and Xuan Yong of RigUp, returning angel investor Kiran Bhatraju of Arcadia and Jason Jacobs’ recently launched My Climate Journey Collective, an early-stage climate tech fund.
“Renewable energy generators are fundamentally different in their variable, distributed, and digitally-native nature compared to their fossil fuel predecessors while customer loads like heating and driving are shifting to electricity consumption from gas. The sands of market power are shifting and incumbents are poorly-positioned to adapt to evolving customer needs, so there’s a massive opportunity for us to capitalize.”
Founded by McGinniss, Brian Maxwell and Ahmed Salman, David Energy raised $1.5 million in pre-seed financing back in March 2020.
As the company expands, its relationship with Hartree, an energy and commodities trading desk, will become even more important. As the startup noted, Hartree is the gateway that David needs to transact with energy markets. The trader provides a balance sheet for working capital to purchase energy on behalf of David’s customers.
“Renewables are causing fundamental shifts in energy markets, and new models and tools need to emerge,” said Dinkar Bhatia, co-head of North American Power at Hartree Partners. “James and the team have identified a significant opportunity in the market and have the right strategy to execute. Hartree is excited to be a commodity partner with David Energy on the launch of the new smart retail platform and is looking forward to helping make DE Supply the premier retailer in the market,” said McGinniss.
David now has retail electricity licenses in New York, New Jersey and Massachusetts and is looking to expand around the country.
“David Energy stands to reinvent the way that hundreds of billions of dollars a year in energy are consumed,” said Equal Ventures investor Rick Zullo. “Business model creativity and finding ways to change user behavior with new models is just as important if not more important than the technology innovation itself.”
Zullo said his firm pitched David Energy on leading the round after years of looking for a commercial renewable energy startup. The core insight was finding a service that could appeal not to the new construction that already is working with top-of-the-line energy management systems, but with the millions of square feet that aren’t adopting the latest and greatest energy management systems.
“Finding something that will go and bring this to the mass market was something we had been on the hunt for really since the inception of Equal Ventures,” said Zullo.
The innovation that made David attractive was the business model. “There is a landscape of hundreds of dead companies,” Zullo said. “What they did was find a way to subsidize the service. They give away at low or no cost and move that in with line items. The partnership with Partree gives them the opportunity to be the cheapest and also the best for you and the highest margin regional energy provider in the market.”
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Thanks to COVID-19, emissions and coal use may have peaked in 2019
If analysts from BloombergNEF are right, then all of the world’s most greenhouse gas polluting days are behind it, thanks to the COVID-19 pandemic.
A sharp drop in energy demand caused by the global response to the coronavirus pandemic will remove 2.5 years of energy sector emissions between now and 2050, according to the latest New Energy Outlook from BloombergNEF.
The latest models from the analysis firm tracking the evolution of the global energy system show that emissions from fuel combustion will likely have peaked in 2019.
The company’s models show that global emissions declined roughly 20% as a result of the international response to the COVID-19 pandemic, and while those emissions will rise again with economic recoveries, BloombergNEF’s models never see emissions reaching 2019 levels. And from 2027 emissions are projected to fall at a rate of 0.7% per year to 2050.
Bloomberg New Energy Finance chart predicting declines in global emissions. Image Credit: BloombergNEF
These rosy projections are based on the assumption of a massive construction boom for wind and solar power, the adoption of electric vehicles and improved energy efficiency across industries.
Together, wind and solar are projected to account for 56% of global electricity generation by mid-century, and along with batteries will gobble up $15.1 trillion invested in new power generation over the next 30 years. The firm also expects another $14 trillion to be invested in the energy grid by 2050.
The rain on this new energy parade could come from India and China, which have long been reliant on coal power to keep their national economies humming. But even in these colossal coal consumers the Bloomberg report sees good news for people who like good news.
They expect coal-fired power to peak in China in 2027 and in India in 2030. By 2050, coal is projected to account for only 12% of global electricity consumption. But even with the surge in renewables, gas-fired power ain’t dead. It remains the only fossil-fuel to continue to grow until 2050, albeit at an anemic 0.5% per-year.
No one should break out the champagne based on these projections, though, because the current trajectory still sees the globe on a course to hit a 3.3 degrees Celsius rise in temperature by 2100.
“The next ten years will be crucial for the energy transition,” said Bloomberg New Energy Finance chief executive, Jon Moore. “There are three key things that we will need to see: accelerated deployment of wind and PV; faster consumer uptake in electric vehicles, small-scale renewables, and low-carbon heating technology, such as heat pumps; and scaled-up development and deployment of zero-carbon fuels.”
And a three degree rise in temperature is bad. At that temperature huge swaths of the world would be unlivable because of widespread drought, rainfall in Mexico and Central America would decline by about half, Southern Africa could be exposed to a water crisis and large portions of nations would be covered by sand dunes (including chunks of Botswana and a large portion of the Western U.S.). The Rocky Mountains would be snowless and the Colorado River could be reduced to a stream, according to this description in Climate Code Red.
“To stay well below two degrees of global temperature rise, we would need to reduce emissions by 6% every year starting now, and to limit the warming to 1.5 degrees C, emissions would have to fall by 10% per year,” Matthias Kimmel, a senior analyst and co-author of the latest report, said in a statement.
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Oceans of opportunity: surveying 2020’s seafaring startup potential
Space attracts a lot of attention as an area of frontier tech investment and entrepreneurship, but there’s another vast expanse that could actually be more addressable by the innovation economy — Earth’s oceans.
Seafaring startups aren’t attracting quite as much attention as their spacefaring cousins, but 2019 still saw a flurry of activity in this sector and 2020 could be an even big year for everything aquatic.
Sounding the depths of data collection
One big similarity between space tech and seafaring opportunities is that data collection represents a significant percent of the potential market. Data collection in and around Earth’s oceans has increased dramatically in recent years thanks to the availability, efficacy and cost of sensor technologies — in 2017, it was estimated that as much ocean data had been gathered in the past two years as in all of human history. But relatively speaking, that barely scratches the surface.
Ocean observation has largely been driven by scientific and research goals, which means there’s bound to be a pretty hard cap on available funding. But ocean data has value in all kinds of private’s sector pursuits, including the potential for autonomous commercial cargo transportation (more on that later), as well as predicting weather and climate conditions that impact shipping routes, agriculture and more.
Various methods exist for collecting data about Earth’s oceans, including space-based satellite observation. Startups like Terradepth, Saildrone and Promare have all proposed various autonomous seafaring data collection vehicle designs that could leverage robotics to bring ocean observation at scale closer to home. These firms are using technology that’s been made affordable for startup budgets through miniaturization and efficiency gains evolved through the progress of the smartphone and other computing industries.
This past year, Xprize awarded millions in prize money to teams that competed in the Ocean Discovery competition for autonomous ocean floor mapping, which is resulting in spin-out ventures that have a head start on success.
As in space, data collection and observation can take many forms, so we can expect to see many industry-specific approaches emerge to capitalize on what are surprisingly large market opportunities, even for seemingly narrow types of data. Continued efforts to refine and improve robotics technologies like sensing and vision should drive even more growth in autonomous ocean observation in 2020.
Autonomous logistics
Oceanfaring drones aren’t just about data collection, however; a huge portion of the global logistics market still relies on giant cargo vessels. The drive to automate container ships is nothing new, but it’s reaching a point where we’re actually starting to see autonomous cargo vehicles embark, including this Chinese cargo ship that set out from Guangdong at the end of this year and a ship called the Yara Birkeland has begun trials out of Rotterdam and expects to be operating fully autonomously by 2022.
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