LONDON — When Jakob Bitner was 7, he left Russia for Germany with his parents and sister. Twenty-eight years later, he is set on solving a vexing green-energy problem that could help Germany end its dependence on imported energy from Russia, or anywhere.
The problem: how to make wind and solar energy available 24 hours a day, seven days a week, even if the sun is not shining or the wind not blowing.
The company that Mr. Bitner co-founded in Munich in 2016, VoltStorage, found some success selling storage battery packs for solar power to homeowners in Europe. Now the company is developing much larger batteries — each about the size of a shipping container — based on a chemical process that can store and discharge electricity over days, not just hours like today’s most popular battery technology.
These ambitions to overcome the unreliable nature of renewable energy fit perfectly with Europe’s targets to reduce dependence on fossil fuels. But Mr. Bitner’s company is facing a frustrating reality that threatens to undercut Europe’s plans and poses a wider challenge in the global fight against climate change: a lack of money to finish the job.
plenty of capital available globally for the multitrillion-dollar task of funding this transition to greener energy.
Europe’s Shift Away From Fossil Fuels
The European Union has begun a transition to greener forms of energy. But financial and geopolitical considerations could complicate the efforts.
The war in Ukraine has made Europe’s energy transition even more urgent. The European Union has said it will cut imported Russian natural gas by two-thirds this year and completely by the end of the decade. While some of that supply will be made up by imports from other countries, such as the United States and Qatar, expanding domestic renewable energy capacity is a critical pillar to this plan.
But attracting investors to projects trying to move beyond mature technologies like solar and wind power is tough. Venture capitalists, once cheerleaders of green energy, are more infatuated with cryptocurrencies and start-ups that deliver groceries and beer within minutes. Many investors are put off by capital-intensive investments. And governments have further muddied the water with inconsistent policies that undermine their bold pledges to reduce carbon emissions.
Venture capitalists’ other interests
Tony Fadell, who spent most of his career trying to turn emerging technologies into mainstream products as an executive at Apple and founder of Nest, said that even as the world faced the risks of climate change, money was flooding into less urgent developments in cryptocurrency, the so-called metaverse and the digital art collections sold as NFTs. Last year, venture capitalists invested $11.9 billion in renewable energy globally, compared with $30.1 billion in cryptocurrency and blockchain, according to PitchBook.
Of the $106 billion invested by venture capitalists in European start-ups last year, just 4 percent went into energy investments, according to PitchBook.
“We need to get real,” said Mr. Fadell, who now lives in Paris and has proposed ideas on energy policy to the French government. “Too many people are investing in the things that are not going to fix our existential problems. They are just investing in fast money.”
It has not helped that the industry has been burned before by a green tech boom. About 15 years ago, environmentally conscious start-ups were seen as the next big thing in Silicon Valley. One of the premier venture capital firms, Kleiner Perkins Caufield & Byers, made former Vice President Al Gore a partner and pledged that clean energy would eventually make up at least a third of its total investments.Instead, Kleiner became a cautionary tale about the risks of investing in energy-related companies as the firm missed out on early backing of social media companies like Facebook and Twitter.
There is evidence that these old fears are receding. Two years ago 360 Capital, a venture capital firm based in Paris and Milan dealing in early-stage investment, introduced a dedicated fund investing in clean energy and sustainability companies. The firm is now planning to open up the fund to more investors, expanding it to €150 million from a €30 million fund.
There are a growing number of dedicated funds for energy investments. But even then there is a tendency for the companies in them to be software developers, deemed less risky than builders of larger-scale energy projects. Four of the seven companies backed by 360 Capital’s new fund are artificial intelligence companies and software providers.
Still, the situation has changed completely since the company’s first major green-energy investment in 2008, Fausto Boni, the firm’s founder, said. “We see potentially lots of money coming into the sector, and so many of the issues we had 15 years ago are on their way to being overcome,” he said. But the availability of bigger investments needed to help companies expand in Europe still lags behind, he added.
The funding gap
Breakthrough Energy Catalyst, which is backed by Bill Gates, is trying to fill the gap. It was formed in late 2021 to help move promising technology from development to commercial use. In Europe, it is a $1 billion initiative with the European Commission and European Investment Bank to support four types of technologies — long-duration energy storage, clean hydrogen, sustainable aviation fuels and direct air capture of carbon dioxide — that it believes need to scale quickly.
In Europe, there are “significant difficulties with the scaling-up phase,” said Ann Mettler, the vice president for Europe at Breakthrough Energy and a former director general at the European Commission. There is money for start-ups, but when companies become reasonably successful and a bit larger, they are often acquired by American or Chinese companies, she said. This leaves fewer independent companies in Europe focused on the energy problems they set out to solve.
Companies that build complex — and often expensive — hardware, like Mr. Bitner’s batteries for long-duration energy storage, have an especially hard time finding investors willing to stomach the risks. After a few investment rounds, the companies are too big for early-stage investors but too small to appeal to institutional investors looking for safer places to park large amounts of cash.
“If you look at typical climate technologies, such as wind and solar and even the lithium-ion batteries, they took well over four decades to go from the early R&D to the large-scale commercialization and cost competitiveness,” Ms. Mettler said, referring to research and development. “Four decades — which obviously we don’t have.”
What investors want
There are some signs of improvement, including more funds focused on clean energy or sustainability and more companies securing larger investment rounds. But there is a sense of frustration as investors, companies and European governments agree that innovation and adoption of new technology need to happen much more quickly to reduce carbon emissions sharply by 2030.
“You won’t find a place in the world that is more attuned to what is needed than Europe,” Ms. Mettler said. “It’s not for lack of ambition or vision — it’s difficult.”
But investors say government policy can help them more. Despite climate pledges, the regulations and laws in place haven’t created strong enough incentives for investments in new technologies.
Industries like steel and concrete have to be forced to adopt greener methods of production, Mr. Boni, the 360 Capital founder, said.
For energy storage, hydrogen, nuclear power and other large-scale projects, the government should expedite permitting, cut taxes and provide matching funds, said Mr. Fadell, who has put his personal fortune into Future Shape, which backs start-ups addressing societal challenges.
“There are few investors willing to go all in to put up $200 million or $300 million,” Mr. Fadell said. “We need to know the government is on our side.”
Yewande Akinola MBE is a member of the Royal Academy of Engineering GCRF Africa Catalyst Committee.
Mark Osborne – Supplied by Yewande Akinola
Growing up in Ibadan, Nigeria, Yewande Akinola spent her time building models of her ideal home with whatever materials she could find. But it wasn’t until her mother, an artist, made a suggestion about her university studies that she considered pursuing a career in engineering over one in architecture. Also crucial in her decision was finding an engineering degree at Warwick University in the U.K. that focused on developing countries—using little resources and lots of creativity. The rest, as they say, is herstory.
Fast-forward three decades, and the 36-year-old Akinola has built skyscrapers in China and researched the involvement of women engineers in the construction of London’s Waterloo Bridge for the BBC. She has received the Member of the Order of the British Empire honor from the Queen for her services to engineering innovation and to diversity in science, technology, engineering and mathematics—the fields collectively known as STEM—and she was recently appointed the U.K. ambassador for clean growth and infrastructure under the country’s innovation agency, Innovate UK.
Akinola’s success story remains an exception rather than the rule in the world of engineering. In the U.K., only 12% of engineers are women. In Sub-Saharan Africa, a focus of Akinola’s diversity-in-STEM efforts as a member of the steering committee of the Royal Academy of Engineering’s GCRF Africa Catalyst program, the figure is estimated to be less than 10%.
With World Engineering Day (March 4) and International Women’s Day (March 8) just a few days apart, this is as good a time as any to inspire women to enter the male-dominated field of engineering and make an impact on their countries’ progress toward the UN’s Sustainable Development Goals.
Starting On The Engineering Path
Engineering is a vast field with many specialities, and the choice can be overwhelming for students. For those interested in sustainability, Akinola has no doubt that the best focus is in energy engineering because it’s the basis for all other sustainability activities, whether in construction or agriculture.
Geography can also shape an engineer’s focus. Sub-Saharan Africa, for instance, has a diversity not just of languages, landscapes and cultures but also of energy needs and opportunities. Countries like Akinola’s native Nigeria, where oil has determined the fortunes of many, have yet to show a full commitment to a post-oil future. Elsewhere, the picture is different. “Where there isn’t that much oil, you can see solar panel farms popping up, wind turbine farms, and there’s that accelerated renewable response because of a lack of a natural resource,” Akinola points out.
To those who doubt engineering would suit them, Akinola suggests looking beyond its reputation as a difficult, math-heavy subject. “The artist’s impression is what we always start off with,” she says; the rest is just “using maths and physics as a tool for creating that creative stroke.”
Another issue that deters prospective engineers is visibility. “I’ve seen young people say, ‘Actually, I don’t think I can do this because I don’t see many people like myself,’” Akinola says. But she has seen the impact that grants—like those managed by the GCRF Africa Catalyst program, which has awarded $4.8 million across 37 projects in 14 countries since 2016—can have. The Higher Education Partnerships in Sub-Saharan Africa Programme, working with Institution of Engineers Rwanda, helped to increase the proportion of female internship applicants from 5% in 2018 to 25% in 2019.
Akinola says you can see the growing confidence of those who receive that support and think, “If I’m receiving this amount in grants, it’s because somebody believes in me—somebody thinks that I have a role to play in ensuring that engineering can become the tool for that economic development in my country.”
Believe In Yourself
Embarking on a career path where women, and especially women of color, are still a rarity comes with its own challenges. Akinola has developed a useful mantra to deal with those who doubt her skills because of their own biases.
“Early on in my career, I had to be comfortable with who I was, as a person,” she says, “and through that journey, I’ve met people who recognize a level of authenticity.” She acknowledges that it takes conscious effort to remember to appreciate those experiences that make you unique, but they will pay off in the end, she says.
“It’s not easy,” she says, “and I have to remind myself all the time, but at least it’s my fallback.”
On the flip side of the visibility issue in male- and white-dominated environments is the issue of tokenism—feeling like you’ve been hired or offered an opportunity just to tick a diversity box. That, too, is something that Akinola is familiar with.
“Sometimes you leave some of those sessions or events or panels a bit upset because you figure out that they just wanted you to be a face there,” she says. Akinola is nonetheless motivated by the thought that her time and words can cause a ripple effect and make someone else feel empowered.
“Of course, sometimes you have to give yourself a bit of a break,” she says, “because a lot of women, as we always do, we take on the responsibility of fixing the world. And it’s not quite 100% our responsibility. We need our allies, and sometimes it gets tiring, so it’s a balance. We have to take care of ourselves and step back and know that actually we’re doing it on our own terms.”
Next time you grab a burger, have some fries, drink a soda or a milkshake, think of all the waste that is generated by packaging, straws and cutlery. Now, multiply that by the 85 million people who in the US alone consumed fast food on any given day, according to a survey published in 2018.
Despite the ban on single-use plastic, waste from the fast food industry is a huge concern in Europe too. France has banned restaurants from using disposable tableware for meals and drinks consumed in the premises from 2023. Toys and gadgets made of plastic in kids menus will be banned as of next year.
More and more fast food chains are then embracing sustainable alternatives. The burger joint Shake Shack has announced that it will introduce sustainable AirCarbon cutlery and straws from Restore Foodware at select restaurants in the US.
AirCarbon is a new technology developed by Newlight Technologies, the parent company of Restore Foodware. Research to develop this new material started in 2007 and after ten years of development, the company was able to produce a cost-effective and carbon-negative biomaterial.
“What makes AirCarbon special is that it is a natural material made by life: that means it contains no synthetic plastic, degrades if it ends up in the environment, and, like growing a leaf, is made in a naturally-occurring process that reduces rather than adds carbon to the air,” says Mark Herrema, CEO at Newlight Technologies.
MORE FOR YOU
The pandemic has accelerated the need to find sustainable packaging solutions as more and more restaurants can only be open for delivery and takeaway. Restore says their AirCarbon foodware stands up in hot and cold conditions, never gets soggy, and is dishwasher safe for reuse. It feels like plastic, but it degrades naturally if it ends up in the environment.
The material is produced by replicating what already happens naturally in the ocean. Microorganisms consume air and greenhouse gas dissolved in saltwater to produce something called PHB that can be used as a replacement for plastic, fiber and leather.
“Our mission is to help end the flow of plastics into the ocean for this generation by replacing them with materials that work for both people and the planet,” Herrema says.
Certified carbon-negative by Carbon Trust and SCS Global, AirCarbon is currently produced in Southern California, but Newlight is planning on expanding their operations to Europe.
Meanwhile, Shake Shack is also testing aluminium water bottles to replace plastic water bottles at a few of their locations.
“Together, food and packaging containers account for almost 45% of the materials landfilled in the United States. To counter this issue, we are finding ways to get better,” says Jeffrey Amoscato, SVP Supply Chain & Menu Innovation at Shake Shack.
“We’re always looking at how we can create a more sustainable supply chain, from evaluating our packaging program to seeking out more sustainable solutions, which has enabled us to reduce our overall use of plastic across operations and delivery by 40% year-over-year,” he adds.
