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Tech leaders can be the secret weapon for supercharging ESG goals
Environmental, social and governance (ESG) factors should be key considerations for CTOs and technology leaders scaling next generation companies from day one. Investors are increasingly prioritizing startups that focus on ESG, with the growth of sustainable investing skyrocketing.
What’s driving this shift in mentality across every industry? It’s simple: Consumers are no longer willing to support companies that don’t prioritize sustainability. According to a survey conducted by IBM, the COVID-19 pandemic has elevated consumers’ focus on sustainability and their willingness to pay out of their own pockets for a sustainable future. In tandem, federal action on climate change is increasing, with the U.S. rejoining the Paris Climate Agreement and a recent executive order on climate commitments.
Over the past few years, we have seen an uptick in organizations setting long-term sustainability goals. However, CEOs and chief sustainability officers typically forecast these goals, and they are often long term and aspirational — leaving the near and midterm implementation of ESG programs to operations and technology teams.
Until recently, choosing cloud regions meant considering factors like cost and latency to end users. But carbon is another factor worth considering.
CTOs are a crucial part of the planning process, and in fact, can be the secret weapon to help their organization supercharge their ESG targets. Below are a few immediate steps that CTOs and technology leaders can take to achieve sustainability and make an ethical impact.
Reducing environmental impact
As more businesses digitize and more consumers use devices and cloud services, the energy needed by data centers continues to rise. In fact, data centers account for an estimated 1% of worldwide electricity usage. However, a forecast from IDC shows that the continued adoption of cloud computing could prevent the emission of more than 1 billion metric tons of carbon dioxide from 2021 through 2024.
Make compute workloads more efficient: First, it’s important to understand the links between computing, power consumption and greenhouse gas emissions from fossil fuels. Making your app and compute workloads more efficient will reduce costs and energy requirements, thus reducing the carbon footprint of those workloads. In the cloud, tools like compute instance auto scaling and sizing recommendations make sure you’re not running too many or overprovisioned cloud VMs based on demand. You can also move to serverless computing, which does much of this scaling work automatically.
Deploy compute workloads in regions with lower carbon intensity: Until recently, choosing cloud regions meant considering factors like cost and latency to end users. But carbon is another factor worth considering. While the compute capabilities of regions are similar, their carbon intensities typically vary. Some regions have access to more carbon-free energy production than others, and consequently the carbon intensity for each region is different.
So, choosing a cloud region with lower carbon intensity is often the simplest and most impactful step you can take. Alistair Scott, co-founder and CTO of cloud infrastructure startup Infracost, underscores this sentiment: “Engineers want to do the right thing and reduce waste, and I think cloud providers can help with that. The key is to provide information in workflow, so the people who are responsible for infraprovisioning can weigh the CO2 impact versus other factors such as cost and data residency before they deploy.”
Another step is to estimate your specific workload’s carbon footprint using open-source software like Cloud Carbon Footprint, a project sponsored by ThoughtWorks. Etsy has open-sourced a similar tool called Cloud Jewels that estimates energy consumption based on cloud usage information. This is helping them track progress toward their target of reducing their energy intensity by 25% by 2025.
Make social impact
Beyond reducing environmental impact, CTOs and technology leaders can have significant, direct and meaningful social impact.
Include societal benefits in the design of your products: As a CTO or technology founder, you can help ensure that societal benefits are prioritized in your product roadmaps. For example, if you’re a fintech CTO, you can add product features to expand access to credit in underserved populations. Startups like LoanWell are on a mission to increase access to capital for those typically left out of the financial system and make the loan origination process more efficient and equitable.
When thinking about product design, a product needs to be as useful and effective as it is sustainable. By thinking about sustainability and societal impact as a core element of product innovation, there is an opportunity to differentiate yourself in socially beneficial ways. For example, Lush has been a pioneer of package-free solutions, and launched Lush Lens — a virtual package app leveraging cameras on mobile phones and AI to overlay product information. The company hit 2 million scans in its efforts to tackle the beauty industry’s excessive use of (plastic) packaging.
Responsible AI practices should be ingrained in the culture to avoid social harms: Machine learning and artificial intelligence have become central to the advanced, personalized digital experiences everyone is accustomed to — from product and content recommendations to spam filtering, trend forecasting and other “smart” behaviors.
It is therefore critical to incorporate responsible AI practices, so benefits from AI and ML can be realized by your entire user base and that inadvertent harm can be avoided. Start by establishing clear principles for working with AI responsibly, and translate those principles into processes and procedures. Think about AI responsibility reviews the same way you think about code reviews, automated testing and UX design. As a technical leader or founder, you get to establish what the process is.
Impact governance
Promoting governance does not stop with the board and CEO; CTOs play an important role, too.
Create a diverse and inclusive technology team: Compared to individual decision-makers, diverse teams make better decisions 87% of the time. Additionally, Gartner research found that in a diverse workforce, performance improves by 12% and intent to stay by 20%.
It is important to reinforce and demonstrate why diversity, equity and inclusion is important within a technology team. One way you can do this is by using data to inform your DEI efforts. You can establish a voluntary internal program to collect demographics, including gender, race and ethnicity, and this data will provide a baseline for identifying diversity gaps and measuring improvements. Consider going further by baking these improvements into your employee performance process, such as objectives and key results (OKRs). Make everyone accountable from the start, not just HR.
These are just a few of the ways CTOs and technology leaders can contribute to ESG progress in their companies. The first step, however, is to recognize the many ways you as a technology leader can make an impact from day one.
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Mighty Buildings lands $22M to create ‘sustainable and affordable’ 3D-printed homes
Oakland-based Mighty Buildings, which is on a quest to build homes using 3D printing, robotics and automation, has raised a $22 million extension to its Series B round of funding.
The additional capital builds upon a $40 million raise the company announced earlier this year, bringing its total funding since its 2017 inception to $100 million.
Mighty Building’s self-proclaimed mission is to create “beautiful, sustainable and affordable” homes.
The company claims to be able to 3D print structures “two times as quickly with 95% less labor hours and 10-times less waste” than conventional construction. For example, it says it can 3D print a 350-square-foot studio apartment in just 24 hours.
Execs say the new capital will go toward making supply chain improvements and moving up research and development timelines. The money will also go toward helping it achieve a new goal of achieving Net-Zero carbon neutrality by 2028 — which it says is 22 years ahead of the construction industry overall.
“As a founding team, we have long been passionate about solving productivity for construction in a sustainable way,” said co-founder and CEO Slava Solonitsyn. “We have spent four years figuring out what it takes to achieve that. We believe that we have a master plan now that can work.”
Since its launch, the company has produced and installed a number of accessory dwelling units (ADUs).
Sam Ruben, co-founder and chief sustainability officer of Mighty Buildings, said the new funds will also go toward kicking off development of the startup’s multistory offering. The multistory efforts will likely initially focus on two to three-story single family homes and townhouses with an eye toward expanding into low-rise apartment buildings. The company hopes to have at least a prototype multistory offering in late 2022 or early 2023, according to Ruben.
“Along with the sustainability improvements already captured by our new formula, this will allow us to develop our next-generation material to get us even closer to our goal of being carbon neutral by 2028,” Ruben said. “It will also give us opportunities to implement improvements in our existing design by reducing the impact of our foundations and other, nonprinted elements.”
Specifically, Mighty Buildings plans to speed up its carbon neutrality roadmap by building “high-throughput, sustainable” micro factories, forming strategic supply chain partnerships, accelerating “blue skies” technology research and developing new composite materials produced from recycled or bio-based feedstock.
The micro factories, according to the company, will be able to produce 200 to 300 homes per year in locations where housing gaps exist. Mighty Buildings plans to create single-family residential developments with its panelized “Mighty Kit System.”
Mighty Buildings has seen quarter over quarter growth in sales, Ruben said, with the company seeing a record of over $7 million in total contracted revenue in the second quarter.
The company is also excited about its new fiber-reinforced printing material, which is currently undergoing testing with certification expected to be completed later this year. Mighty Buildings claims that its new formula shows “over 50% improvement” in embodied carbon from its original material and a strength profile similar to reinforced concrete, with more than four times less weight.
The round extension was supported by a few new and existing investors including ArcTern Ventures, Core Innovation Capital, Decacorn Capital, Gaingels, Khosla Ventures, Klaff Realty, MicroVentures, Modern Venture Partners, Polyvalent Capital, Vibrato Capital and others.
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Nuclear waste recycling is a critical avenue of energy innovation
No single question bedevils American energy and environmental policy more than nuclear waste. No, not even a changing climate, which may be a wicked problem but nonetheless receives a great deal of counter-bedeviling attention.
It’s difficult to paint the picture with a straight face. Let’s start with three main elements of the story.
First, nuclear power plants in the United States generate about 2,000 metric tons of nuclear waste (or “spent fuel”) per year. Due to its inherent radioactivity, it is carefully stored at various sites around the country.
Second, the federal government is in charge of figuring out what to do with it. In fact, power plant operators have paid over $40 billion into the Nuclear Waste Fund so that the government can handle it. The idea was to bury it in the “deep geological repository” embodied by Yucca Mountain, Nevada, but this has proved politically impossible. Nevertheless, $15 billion was spent on the scoping.
Third, due to the Energy Department’s inability to manage this waste, it simply accumulates. According to that agency’s most recent data release, some 80,000 metric tons of spent fuel—hundreds of thousands of fuel assemblies containing millions of fuel rods—is waiting for a final destination.
And here’s the twist ending: those nuclear plant operators sued the government for breach of contract and, in 2013, they won. Several hundred million dollars is now paid out to them each year by the U.S. Treasury, as part of a series of settlements and judgments. The running total is over $8 billion.
I realize this story sounds a little crazy. Am I really saying that the U.S. government collected billions of dollars to manage nuclear waste, then spent billions of dollars on a feasibility study only to stick it on the shelf, and now is paying even more billions of dollars for this failure? Yes, I am.
Fortunately, all of the aggregated waste occupies a relatively small area and temporary storage exists. Without an urgent reason to act, policymakers generally will not.
While attempts to find long-term storage will continue, policymakers should look towards recycling some of this “waste” into usable fuel. This is actually an old idea. Only a small fraction of nuclear fuel is consumed to generate electricity.
Proponents of recycling envision reactors that use “reprocessed” spent fuel, extracting energy from the 90% of it leftover after burn-up. Even its critics admit that the underlying chemistry, physics, and engineering of recycling are technically feasible, and instead assail the disputable economics and perceived security risks.
So-called Generation IV reactors come in all shapes and sizes. The designs have been around for years—in some respects, all the way back to the dawn of nuclear energy—but light-water reactors have dominated the field for a variety of political, economic, and strategic reasons. For example, Southern Company’s twin conventional pressurized water reactors under construction in Georgia each boast a capacity of just over 1,000-megawatt (or 1 gigawatt), standard for Westinghouse’s AP 1000 design.
In contrast, next-generation plant designs are a fraction of the size and capacity, and also may use different cooling systems: Oregon-based NuScale Power’s 77-megawatt small modular reactor, San Diego-based General Atomics’ 50-megawatt helium-cooled fast modular reactor, Alameda-based Kairos Power’s 140-megawatt molten fluoride salt reactor, and so on all have different configurations that can fit different business and policy objectives.
Many Gen-IV designs can either explicitly recycle used fuel or be configured to do so. On June 3, TerraPower (backed by Bill Gates), GE Hitachi, and the State of Wyoming announced an agreement to build a demonstration of the 345-megawatt Natrium design, a sodium-cooled fast reactor.
Natrium is technically capable of recycling fuel for generation. California-based Oklo has already reached an agreement with Idaho National Laboratory to operate its 1.5-megawatt “microreactor” off of used-fuel supplies. In fact, the self-professed “preferred fuel” for New York-based Elysium Industries’ molten salt reactor design is spent nuclear fuel and Alabama-based Flibe Energy advertises the waste-burning capability of its thorium reactor design.
Whether advanced reactors rise or fall does not depend on resolving the nuclear waste deadlock. Though such reactors may be able to consume spent fuel, they don’t necessarily have to. Nonetheless, incentivizing waste recycling would improve their economics.
“Incentivize” here is code for “pay.” Policymakers should consider ways that Washington can make it more profitable for a power plant to recycle fuel than to import it—from Canada, Kazakhstan, Australia, Russia, and other countries.
Political support for advanced nuclear technology, including recycling, is deeper than might be expected. In 2019, the Senate confirmed Dr. Rita Baranwal as the Assistant Secretary for Nuclear Energy at the Department of Energy (DOE). A materials scientist by training, she emerged as a champion of recycling.
The new Biden administration has continued broadly bipartisan support for advanced nuclear reactors in proposing in its Fiscal Year 2022 Budget Request to increase funding for the DOE’s Office of Nuclear Energy by nearly $350 million. The proposal includes specific funding increases for researching and developing reactor concepts (plus $32 million), fuel cycle R&D (plus $59 million), and advanced reactor demonstration (plus $120 million), and tripling funding for the Versatile Test Reactor (from $45 million to $145 million, year over year).
In May, the DOE’s Advanced Research Projects Agency-Energy (ARPA-E) announced a new $40 million program to support research in “optimizing” waste and disposal from advanced reactors, including through waste recycling. Importantly, the announcement explicitly states that the lack of a solution to nuclear waste today “poses a challenge” to the future of Gen-IV reactors.
The debate is a reminder that recycling in general is a very messy process. It is chemical-, machine-, and energy-intensive. Recycling of all kinds, from critical minerals to plastic bottles, produces new waste, too. Today, federal and state governments are quite active in recycling these other waste streams, and they should be equally involved in nuclear waste.
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What SOSV’s Climate Tech 100 tells founders about investors in the space
On Earth Day, April 22, SOSV published the SOSV Climate Tech 100, a list of the best startups that we’ve supported from their earliest stages to address climate change. There are always valuable insights embedded in a list like the 100. A TechCrunch story captured the investment perspective, and an SOSV post went deeper into the companies’ category breakdown and founder profiles.
But what can founders learn from the list about climate tech investors? In other words, who invested in the Climate Tech 100? We dug into the “who’s who” of the list, which had more than 500 investors, and here’s what we found.
An active but fragmented landscape
If you think 500 investors in 100 companies is a lot of investors, you’re right. There are clearly a lot of investors interested in climate tech, and most are generalists just testing the waters. For the Climate Tech 100, about 10% of investors put their money in more than one startup and only seven (less than 2%) wrote a check to four or more. These included Blue Horizon, CPT Capital, EF, Fifty Years, Hemisphere Ventures and Horizons Ventures.
That pattern tracks well with data from PwC, which found that 2,700 unique investors had backed 1,200 startups in its State of Climate Tech 2020 report covering the 2013-2019 period. The report found that only 10 firms out of 2,700 made four or more climate tech deals per year, on average, over the 2013-2019 period. The most active firms are listed in the table below.
Image Credits: PwC, 2020; additional research by SOSV
Capital deployed in climate tech grew at five times the venture capital overall growth rate over the 2013-2019 period.
There is reason to believe that the fragmentation will diminish with the launch of more funds focused on climate tech. Four funds worth more than a billion dollars each have launched since 2020 that fit the description (see chart below).
It’s also encouraging to see that capital deployed in climate tech grew at five times the venture capital overall growth rate over the 2013-2019 period.
Even so, climate tech still only represented 6% of total venture capital deployed in 2019, so there is plenty of room to grow.
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Flush with $42M, hot AI startup Faculty plans to hoover up more PhDs… and steer clear of politics
In the wake of the news that U.K.-based AI startup Faculty has raised $42.5 million in a growth funding round, I teased out more from CEO and co-founder Marc Warner on what his plans are for the company.
Faculty seems to have an uncanny knack of winning U.K. government contracts, after helping Boris Johnson win his Vote Leave campaign and thus become prime minister. It’s even helping sort out the mess that Brexit has subsequently made of the fishing industry, problems with the NHS and telling global corporates like Red Bull and Virgin Media what to suggest to their customers. Meanwhile, it continues to hoover up PhD graduates at a rate of knots to work on its AI platform.
But, speaking to me over a call, Warner said the company no longer has plans to enter the political sphere again: “Never again. It’s very controversial. I don’t want to make out that I think politics is unethical. Trying to make the world better, in whatever dimension you can, is a good thing … But from our perspective, it was, you know, ‘noisy,’ and our goal as an organization, despite current appearances to the contrary, is not to spend tonnes of time talking about this stuff. We do believe this is an important technology that should be out there and should be in a broader set of hands than just the tech giants, who are already very good at it.”
On the investment, he said: “Fundamentally, the money is about doubling down on the U.K. first and then international expansion. Over the last seven years or so we have learned what it takes to do important AI, impactful AI, at scale. And we just don’t think that there’s actually much of it out there. Customers are rightly sometimes a bit skeptical, as there’s been hype around this stuff for years and years. We figured out a bunch of the real-world applications that go into making this work so that it actually delivers the value. And so, ultimately, the money is really just about being able to build out all of the pieces to do that incredibly well for our customers.”
He said Faculty would be staying firmly HQ’d in the U.K. to take advantage of the U.K.’s talent pool: “The U.K. is a wonderful place to do AI. It’s got brilliant universities, a very dynamic startup scene. It’s actually more diverse than San Francisco. There’s government, there’s finance, there are corporates, there’s less competition from the tech giants. There’s a bit more of a heterogeneous ecosystem. There’s no sense in which we’re thinking, ‘Right, that’s it, we’re up and out!’. We love working here, we want to make things better. We’ve put an enormous amount of effort into trying to help organizations like the government and the NHS, but also a bunch of U.K. corporates in trying to embrace this technology, so that’s still going to be a terrifically important part of our business.”
That said, Faculty plans to expand abroad: “We’re going to start looking further afield as well, and take all of the lessons we’ve learned to the U.S., and then later Europe.”
But does he think this funding round will help it get ahead of other potential rivals in the space? “We tend not to think too much in terms of rivals,” he says. “The next 20 years are going to be about building intelligence into the software that already exists. If you look at the global market cap of the software businesses out there, that’s enormous. If you start adding intelligence to that, the scale of the market is so large that it’s much more important to us that we can take this incredibly important technology and deploy it safely in ways that actually improve people’s lives. It could be making products cheaper or helping organizations make their services more efficient.”
If that’s the case, then does Faculty have any kind of ethics panel overseeing its work? “We have an internal ethics panel. We have a set of principles and if we think a project might violate those principles, it gets referred to that ethics panel. It’s randomly selected from across faculty. So we’re quite careful about the projects that we work on and don’t. But to be honest, the vast majority of stuff that’s going on is very vanilla. They are just clearly ‘good for the world’ projects. The vast majority of our work is doing good work for corporate clients to help them make their businesses that bit more efficient.”
I pressed him to expand on this issue of ethics and the potential for bias. He says Faculty “builds safety in from the start. Oddly enough, the reason I first got interested in AI was reading Nick Bostrom’s work about superintelligence and the importance of AI safety. And so from the very, very first fellowship [Faculty AI researchers are called Fellows] all the way back in 2014, we’ve taught the fellows about AI safety. Over time, as soon as we were able, we started contributing to the research field. So, we’ve published papers in all of the biggest computer science conferences Neurips, ICM, ICLR, on the topic of AI safety. How to make algorithms fair, private, robust and explainable. So these are a set of problems that we care a great deal about. And, I think, are generally ‘underdone’ in the wider ecosystem. Ultimately, there shouldn’t be a separation between performance and safety. There is a bit of a tendency in other companies to say, ‘Well, you can either have performance, or you can have safety.’ But of course, we know that’s not true. The cars today are faster and safer than the Model T Ford. So it’s a sort of a false dichotomy. We’ve invested a bunch of effort in both those capabilities, so we obviously want to be able to create a wonderful performance for the task at hand, but also to ensure that the algorithms are fair, private, robust and explainable wherever required.”
That also means, he says, that AI might not always be the “bogeyman” the phrase implies: “In some cases, it’s probably not a huge deal if you’re deciding whether to put a red jumper or a blue jumper at the top of your website. There are probably not huge ethical implications in that. But in other circumstances, of course, it’s critically important that the algorithms are safe and are known to be safe and are trusted by both the users and anyone else who encounters them. In a medical context, obviously, they need to be trusted by the doctors and the patients need to make sure they actually work. So we’re really at the forefront of deploying that stuff.”
Last year the Guardian reported that Faculty had won seven government contracts in 18 months. To what does he attribute this success? “Well, I mean, we lost an enormous number more! We are a tiny supplier to government. We do our best to do work that is valuable to them. We’ve worked for many, many years with people at the home office,” he tells me.
“Without wanting to go into too much detail, that 18 months stretches over multiple prime ministers. I was appointed to the AI Council under Theresa May. Any sort of insinuations on this are just obviously nonsense. But, at least historically, most of our work was in the private sector and that continues to be critically important for us as an organization. Over the last year, we’ve tried to step up and do our bit wherever we could for the public sector. It’s facing such a big, difficult situation around COVID, and we’re very proud of the things we’ve managed to accomplish with the NHS and the impact that we had on the decisions that senior people were able to undertake.”
Returning to the issue of politics I asked him if he thought — in the wake of events such as Brexit and the election of Donald Trump, which were both affected by AI-driven political campaigning — AI is too dangerous to be applied to that arena? He laughed: “It’s a funny old funny question… It’s a really odd way to phrase a question. AI is just a technology. Fundamentally, AI is just maths.”
I asked him if he thought the application of AI in politics had had an outsized or undue influence on the way that political parties have operated in the last few years: “I’m afraid that is beyond my knowledge,” he says. But does Faculty have regrets about working in the political sphere?
“I think we’re just focused on our work. It’s not that we have strong feelings, either way, it’s just that from our perspective, it’s much, much more interesting to be able to do the things that we care about, which is deploying AI in the real world. It’s a bit of a boring answer! But it is truly how we feel. It’s much more about doing the things we think are important, rather than judging what everyone else is doing.”
Lastly, we touched on the data science capabilities of the U.K. and what the new fundraising will allow the company to do.
He said: “We started an education program. We have roughly 10% of the U.K.’s PhDs in physics, maths, engineering, applying to the program. Roughly 400 or so people have been through that program and we plan to expand that further so that more and more people get the opportunity to start a career in data science. And then inside Faculty specifically, we think we’ll be able to create 400 new jobs in areas like software engineering, data science, product management. These are very exciting new possibilities for people to really become part of the technology revolution. I think there’s going to be a wonderful new energy in Faculty, and hopefully a positive small part in increasing the U.K. tech ecosystem.”
Warner comes across as sincere in his thoughts about the future of AI and is clearly enthusiastic about where Faculty can take the whole field next, both philosophically and practically. Will Faculty soon be challenging that other AI leviathan, DeepMind, for access to all those PhDs? There’s no doubt it will.
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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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The energy ecosystem should move to make the ‘energy internet’ a reality
As vice president of Innovation at National Grid Partners, I’m responsible for developing initiatives that not only benefit National Grid’s current business but also have the potential to become stand-alone businesses. So I obviously have strong views about the future of the energy industry.
But I don’t have a crystal ball; no one does. To be a good steward of our innovation portfolio, my job isn’t to guess what the right “basket” is for our “eggs.” It’s to optimally allocate our finite eggs across multiple baskets with the greatest collective upside.
Put another way, global and regional trends make it clear that the Next Big Thing isn’t any single thing at all. Instead, the future is about open innovation and integration of elements across the entire energy supply chain. Only with such an open energy ecosystem can we adapt to the highly volatile — some might even say unpredictable — market conditions we face in the energy industry.
Just as the digital internet rewards innovation wherever it serves the market — whether you build a better app or design a cooler smartphone — so too will the energy internet offer greater opportunities across the energy supply chain.
I like to think of this open, innovation-enabling approach as the “energy internet,” and I believe it represents the most important opportunity in the energy sector today.
The internet analogy
Here’s why I find the concept of the energy internet helpful. Before the digital internet (a term I’m using here to encompass all the hardware, software and standards that comprise it), we had multiple silos of technology such as mainframes, PCs, databases, desktop applications and private networks.
As the digital internet evolved, however, the walls between these silos disappeared. You can now utilize any platform on the back end of your digital services, including mainframes, commodity server hardware and virtual machines in the cloud.
You can transport digital payloads across networks that connect to any customer, supplier or partner on the planet with whatever combination of speed, security, capacity and cost you deem most appropriate. That payload can be data, sound or video, and your endpoint can be a desktop browser, smartphone, IoT sensor, security camera or retail kiosk.
This mix-and-match internet created an open digital supply chain that has driven an epochal boom in online innovation. Entrepreneurs and inventors can focus on specific value propositions anywhere across that supply chain rather than having to continually reinvent the supply chain itself.
The energy sector must move in the same direction. We need to be able to treat our various generation modalities like server platforms. We need our transmission grids to be as accessible as our data networks, and we need to be able to deliver energy to any consumption endpoint just as flexibly. We need to encourage innovation at those endpoints, too — just as the tech sector did.
Just as the digital internet rewards innovation wherever it serves the market — whether you build a better app or design a cooler smartphone — so too will the energy internet offer greater opportunities across the energy supply chain.
The 5D future
So what is the energy internet? As a foundation, let’s start with a model that takes the existing industry talk of digitalization, decentralization and decarbonization a few steps further:
Digitalization: Innovation depends on information about demand, supply, efficiency, trends and events. That data must be accurate, complete, timely and sharable. Digitalization efforts such as IoE, open energy, and what many refer to as the “smart grid” are instrumental because they ensure innovators have the insights they need to continuously improve the physics, logistics and economics of energy delivery.
Decentralization: The internet changed the world in part because it took the power of computing out of a few centralized data centers and distributed it wherever it made sense. The energy internet will do likewise. Digitalization supports decentralization by letting assets be integrated into an open energy supply chain. But decentralization is much more than just the integration of existing assets — it’s the proliferation of new assets wherever they’re needed.
Decarbonization: Decarbonization is, of course, the whole point of the exercise. We must move to greener supply chains built on decentralized infrastructure that leverage energy supply everywhere to meet energy demand anywhere. The market is demanding it and regulators are requiring it. The energy internet is therefore more than just an investment opportunity — it’s an existential imperative.
Democratization: Much of the innovation associated with the internet arose from the fact that, in addition to decentralizing technology physically, it also democratized technology demographically. Democratization is about putting power (literally, in this case) into the hands of the people. Vastly increasing the number of minds and hands tackling the energy industry’s challenges will also accelerate innovation and enhance our ability to respond to market dynamics.
Diversity: As I asserted above, no one has a crystal ball. So anyone investing in innovation at scale should diversify — not just to mitigate risk and optimize returns, but as an enablement strategy. After all, if we truly believe the energy internet (or Grid 2.0, if you prefer that term) will require that all the elements of the energy supply chain work together, we must diversify our innovation initiatives across those elements to promote interoperability and integration.
That’s how the digital internet was built. Standards bodies played an important role, but those standards and their implementations were driven by industry players like Microsoft and Cisco — as well as top VCs — who ensured the ecosystem’s success by driving integration across the supply chain.
We must take the same approach with the energy internet. Those with the power and influence to do so must help ensure we aggressively advance integration across the energy supply chain as a whole, even as we improve the individual elements. To this end, National Grid last year kicked off a new industry group called the NextGrid Alliance, which includes senior executives from more than 60 utilities across the world.
Finally, we believe it’s essential to diversify thinking within the energy ecosystem as well. National Grid has sounded alarms about the serious underrepresentation of women in the energy industry and of female undergraduates in STEM programs. On the flip side, research by Deloitte has found diverse teams are 20% more innovative. More than 60% of my own team at NGP are women, and that breadth of perspective has helped National Grid capture powerful insights into companywide innovation efforts.
More winning, less predicting
The concept of the energy internet isn’t some abstract future ideal. We’re already seeing specific examples of how it will transform the market:
Green transnationalism: The energy internet is on its way to becoming as global as the digital internet. The U.K., for instance, is now receiving wind-generated power from Norway and Denmark. This ability to leverage decentralized energy supply across borders will have significant benefits for national economies and create new opportunities for energy arbitrage.
EV charging models: Pumping electricity isn’t like pumping gas, nor should it be. With the right combination of innovation in smart metering and fast-charging end-point design, the energy internet will create new opportunities at office buildings, residential complexes and other places where cars plus convenience can equal cash.
Disaster mitigation: Recent events in Texas have highlighted the negative consequences of not having an energy internet. Responsible utilities and government agencies must embrace digitization and interoperability to more effectively troubleshoot infrastructure and better safeguard communities.
These are just a few of the myriad ways in which an open, any-to-any energy internet will promote innovation, stimulate competition and generate big wins. No one can predict exactly what those big wins will be, but there will surely be many, and they will accrue to the benefit of all.
That’s why even without a crystal ball, we should all commit ourselves to digitalization, decentralization, decarbonization, democratization and diversity. In so doing, we’ll build the energy internet together, and enable a fair, affordable and clean energy future.
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Exeger takes $38M to ramp up production of its flexible solar cells for self-powered gadgets
Sweden’s Exeger, which for over a decade has been developing flexible solar cell technology (called Powerfoyle) that it touts as efficient enough to power gadgets solely with light, has taken in another tranche of funding to expand its manufacturing capabilities by opening a second factory in the country.
The $38 million raise is comprised of $20M in debt financing from Swedbank and Swedish Export Credit Corporation (SEK), with a loan amounting to $12M from Swedbank (partly underwritten by the Swedish Export Credit Agency (EKN) under the guarantee of investment credits for companies with innovations) and SEK issuing a loan amounting to $8M (partly underwritten by the pan-EU European Investment Fund (EIF)); along with $18M through a directed share issue to Ilija Batljan Invest AB.
The share issue of 937,500 shares has a transaction share price of $19.2 — which corresponds to a pre-money valuation of $860M for the solar cell maker.
Back in 2019 SoftBank also put $20M into Exeger, in two investments of $10M — entering a strategic partnership to accelerate the global rollout of its tech and further extending its various investments in solar energy.
The Swedish company has also previously received a loan from the Swedish Energy Agency, in 2014, to develop its solar cell tech. But this latest debt financing round is its first on commercial terms (albeit partly underwritten by EKN and EIF).
Exeger says its solar cell tech is the only one that can be printed in free-form and different colors, meaning it can “seamlessly enhance any product with endless power”, as its PR puts it.
So far two devices have integrated the Powerfoyle tech: A bike helmet with an integrated safety taillight (by POC), and a pair of wireless headphones (by Urbanista). Although neither has yet been commercially launched — but both are slated to go on sale next month.
Exeger says its planned second factory in Stockholm will allow it to increase its manufacturing capacity tenfold by 2023, helping it target a broader array of markets sooner and accelerating its goal of mass adoption of its tech.
Its main target markets for the novel solar cell technology currently include consumer electronics, smart home, smart workplace, and IoT.
More device partnerships are slated as coming this year.
Exeger’s Powerfoyle solar cell tell integrated into a pair of Urbanista headphones (Image Credits: Exeger/Urbanista)
“We don’t label our rounds but take a more pragmatic view on fundraising,” said Giovanni Fili, founder and CEO. “Developing a new technology, a new energy source, as well as laying the foundation for a new industry takes time. Thus, a company like ours requires long-term strategic investors that all buy into the vision as well as the overall strategy. We have spent a lot of time and energy on this, and it has paid off. It has given the company the resources required, both time and money, to bring an invention to a commercial launch, which is where we are today.”
Fili added that it’s chosen to raise debt financing now “because we can”.
“The same answer as when asked why we build a new factory in Stockholm, Sweden, rather than abroad. We have always said that once commercial, we will start leveraging the balance sheet when securing funds for the next factory. Thanks to our long-standing relationship with Swedbank and SEK, as well as the great support of the Swedish government through EKN underwriting part of the loans, we were able to move this forward,” he said.
Discussing the forthcoming two debut gizmos, the POC Omne Eternal helmet and the Urbanista Los Angeles headphones — which will both go sale in June — Fili says interest in the self-powered products has “surpassed all our expectations”.
“Any product which integrates Powerfoyle is able to charge under all forms of light, whether from indoor lamps or natural outdoor light. The stronger the light, the faster it charges. The POC helmet, for example, doesn’t have a USB port to power the safety light because the ambient light will keep it charging, cycling or not,” he tells TechCrunch.
“The Urbanista Los Angeles wireless headphones have already garnered tremendous interest online. Users can spend one hour outdoors with the headphones and gain three hours of battery time. This means most users will never need to worry about charging. As long as you have our product in light, any light, it will constantly charge. That’s one of the key aspects of our technology, we have designed and engineered the solar cell to work wherever people need it to work.”
“This is the year of our commercial breakthrough,” he added in a statement. “The phenomenal response from the product releases with POC and Urbanista are clear indicators this is the perfect time to introduce self-powered products to
the world. We need mass scale production to realize our vision which is to touch the lives of a billion people by 2030, and that’s why the factory is being built now.”
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Geothermal technology has enormous potential to power the planet and Fervo wants to tap it
Tapping the geothermal energy stored beneath the Earth’s surface as a way to generate renewable power is one of the new visions for the future that’s captured the attention of environmentalists and oil and gas engineers alike.
That’s because it’s not only a way to generate power that doesn’t rely on greenhouse gas emitting hydrocarbons, but because it uses the same skillsets and expertise that the oil and gas industry has been honing and refining for years.
At least that’s what drew the former completion engineer (it’s not what it sounds like) Tim Latimer to the industry and to launch Fervo Energy, the Houston-based geothermal tech developer that’s picked up funding from none other than Bill Gates’ Breakthrough Energy Ventures (that fund… is so busy) and former eBay executive, Jeff Skoll’s Capricorn Investment Group.
With the new $28 million cash in hand, Fervo’s planning on ramping up its projects, which Latimer said would “bring on hundreds of megawatts of power in the next few years.”
Latimer got his first exposure to the environmental impact of power generation as a kid growing up in a small town outside of Waco, Texas near the Sandy Creek coal power plant, one of the last coal-powered plants to be built in the U.S.
Like many Texas kids, Latimer came from an oil family, and got his first jobs in the oil and gas industry before realizing that the world was going to be switching to renewables and the oil industry — along with the friends and family he knew — could be left high and dry.
It’s one reason he started working on Fervo, the entrepreneur said.
“What’s most important, from my perspective, since I started my career in the oil and gas industry, is providing folks that are part of the energy transition on the fossil fuel side to work in the clean energy future,” Latimer said. “I’ve been able to go in and hire contractors and support folks that have been out of work or challenged because of the oil price crash… And I put them to work on our rigs.”
Fervo Energy chief executive, Tim Latimer, pictured in a hardhat at one of the company’s development sites. Image Credits: Fervo Energy
When the Biden administration talks about finding jobs for employees in the hydrocarbon industry as part of the energy transition, this is exactly what they’re talking about.
And geothermal power is no longer as constrained by geography, so there are a lot of abundant resources to tap and the potential for high-paying jobs in areas that are already dependent on geological services work, Latimer said (late last year, Vox published a good overview of the history and opportunity presented by the technology).
“A large percentage of the world’s population actually lives next to good geothermal resources,” Latimer said. “[There are] 25 countries today that have geothermal installed and producing and another 25 where geothermal is going to grow.”
Geothermal power production actually has a long history in the Western U.S. and in parts of Africa where naturally occurring geysers and steam jets pouring from the earth have been obvious indicators of good geothermal resources, Latimer said.
“Fervo’s technology unlocks a new class of geothermal resource that is ready for large-scale deployment. Fervo’s geothermal systems use novel techniques, including horizontal drilling, distributed fiber optic sensing and advanced computational modelling, to deliver more repeatable and cost effective geothermal electricity,” Latimer wrote in an email. “Fervo’s technology combines with the latest advancements in Organic Rankine Cycle generation systems to deliver flexible, 24/7 carbon-free electricity.”
Initially developed with a grant from the TomKat Center at Stanford University and a fellowship funded by Activate.org at the Lawrence Berkeley National Lab’s Cyclotron Road division, Fervo has gone on to score funding from the DOE’s Geothermal Technology Office and ARPA-E to continue work with partners like Schlumberger, Rice University and the Berkeley Lab.
The combination of new and old technology is opening vast geographies to the company to potentially develop new projects.
Other companies are also looking to tap geothermal power to drive a renewable power-generation development business. Those are startups like Eavor, which has the backing of energy majors like bp Ventures, Chevron Technology Ventures, Temasek, BDC Capital, Eversource and Vickers Venture Partners; and other players including GreenFire Energy and Sage Geosystems.
Demand for geothermal projects is skyrocketing, opening up big markets for startups that can nail the cost issue for geothermal development. As Latimer noted, from 2016 to 2019 there was only one major geothermal contract, but in 2020 there were 10 new major power purchase agreements signed by the industry.
For all of these projects, cost remains a factor. Contracts that are being signed for geothermal that are in the $65 to $75 per megawatt range, according to Latimer. By comparison, solar plants are now coming in somewhere between $35 and $55 per megawatt, as The Verge reported last year.
But Latimer said the stability and predictability of geothermal power made the cost differential palatable for utilities and businesses that need the assurance of uninterruptible power supplies. As a current Houston resident, the issue is something that Latimer has an intimate experience with from this year’s winter freeze, which left him without power for five days.
Indeed, geothermal’s ability to provide always-on clean power makes it an incredibly attractive option. In a recent Department of Energy study, geothermal could meet as much as 16% of the U.S. electricity demand, and other estimates put geothermal’s contribution at nearly 20% of a fully decarbonized grid.
“We’ve long been believers in geothermal energy but have waited until we’ve seen the right technology and team to drive innovation in the sector,” said Ion Yadigaroglu of Capricorn Investment Group, in a statement. “Fervo’s technology capabilities and the partnerships they’ve created with leading research organizations make them the clear leader in the new wave of geothermal.”
Fervo Energy drilling site. Image Credits: Fervo Energy
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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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