Recently, Bill Gates and a bunch of other billionaire investors came together and formed what they call the Breakthrough Energy Coalition. The purpose of the coalition is to fill the Capital vacuum in the New Energy field in order to accelerate the advanced energy future our planet needs. He noted that Government research alone is not enough. We need the skills and resources of leading investors with experience in driving innovation from the lab to the marketplace. It sounds good, but I have 2 issues I see with their strategies. Keep reading for more.
The investors know there are numerous awesome ideas out there on how to solve our energy needs, but the difficulty is how to get them from lab to market. Even the most promising energy ideas face daunting commercialization challenges because the bridge from “promising concept” to “viable product” is virtually impassable. One would say the solution to this conundrum is pretty simple, it’s called Venture Capital. Unfortunately, venture capital firms most often despise the risk-reward balance for early-stage investments in potentially transformative energy systems.
Bill Gates and his partners also believe that the private sector knows how to build companies and take the risks that lead to innovative ideas being brought to the world. Therefore their proposal is simple yet profound, a coalition of investors motivated partly by the possibility of making big returns over the long-term, but also by the criticality of an energy transition. Meaning, it’s no longer all about “how much $$$ can I make as an investor in 3 years time?” but rather, “how much would the world benefit from this new energy tech?”
So they’re basically using a flexible approach to early stage investments, with the idea that once these investments are de-risked (after proven success), traditional commercial capital will then invest in the later stages. They’ll also focus more on those ideas that are capable of rapid scaling without requiring extra land use or other essential resources.
Also, they concede that they don’t know where the best ideas will come from, so they’ll will invest across a number of sectors. Nice so far, right?
Here are the 2 problems I see with their Business model:
Firstly, part of their strategy is to work with a coalition of the world’s best scientists who will offer guidance on which businesses have the most scientifically viable technology and are worth putting money into. As I see it, this immediately excludes all technologies that science has no full understanding of yet, such as LENR (Low Energy Nuclear Reactions).
Secondly, the Breakthrough Coalition will also only focus their investments on those countries that have signed to, and contribute to, a Global Warming / Climate Change initiative called Mission Innovation. This sounds rather political, like the terrible geopolitical talk of Solar Hydrogen Trends. Why not just leave politics to politicians and focus on technology?