Ukrainian police arrest multiple Clop ransomware gang suspects

Multiple suspects believed to be linked to the Clop ransomware gang have been detained in Ukraine after a joint operation from law enforcement agencies in Ukraine, South Korea, and the United States.

The Cyber Police Department of the National Police of Ukraine confirmed that six arrests were made after searches at 21 residences in the capital Kyiv and nearby regions. While it’s unclear whether the defendants are affiliates or core developers of the ransomware operation, they are accused of running a “double extortion” scheme, in which victims who refuse to pay the ransom are threatened with the leak of data stolen from their networks prior to their files being encrypted.

“It was established that six defendants carried out attacks of malicious software such as ‘ransomware’ on the servers of American and [South] Korean companies,” alleged Ukraine’s national police force in a statement.

The police also seized equipment from the alleged Clop ransomware gang, said to behind total financial damages of about $500 million. This includes computer equipment, several cars — including a Tesla and Mercedes, and 5 million Ukrainian Hryvnia (around $185,000) in cash. The authorities also claim to have successfully shut down the server infrastructure used by the gang members to launch previous attacks.

“Together, law enforcement has managed to shut down the infrastructure from which the virus spreads and block channels for legalizing criminally acquired cryptocurrencies,” the statement added.

These attacks first began in February 2019, when the group attacked four Korean companies and encrypted 810 internal services and personal computers. Since, Clop — often styled as “Cl0p” — has been linked to a number of high-profile ransomware attacks. These include the breach of U.S. pharmaceutical giant ExecuPharm in April 2020 and the attack on South Korean e-commerce giant E-Land in November that forced the retailer to close almost half of its stores.

Clop is also linked to the ransomware attack and data breach at Accellion, which saw hackers exploit flaws in the IT provider’s File Transfer Appliance (FTA) software to steal data from dozens of its customers. Victims of this breach include Singaporean telecom Singtel, law firm Jones Day, grocery store chain Kroger, and cybersecurity firm Qualys.

At the time of writing, the dark web portal that Clop uses to share stolen data is still up and running, although it hasn’t been updated for several weeks. However, law enforcement typically replaces the targets’ website with their own logo in the event of a successful takedown, which suggests that members of the gang could still be active.

“The Cl0p operation has been used to disrupt and extort organizations globally in a variety of sectors including telecommunications, pharmaceuticals, oil and gas, aerospace, and technology,” said John Hultquist, vice president of analysis at Mandiant’s threat intelligence unit. “The actor FIN11 has been strongly associated with this operation, which has included both ransomware and extortion, but it is unclear if the arrests included FIN11 actors or others who may also be associated with the operation.”

Hultquist said the efforts of the Ukrainian police “are a reminder that the country is a strong partner for the U.S. in the fight against cybercrime and authorities there are making the effort to deny criminals a safe harbor.”

The alleged perpetrators face up to eight years in prison on charges of unauthorized interference in the work of computers, automated systems, computer networks, or telecommunications networks and laundering property obtained by criminal means.

News of the arrests comes as international law enforcement turns up the heat on ransomware gangs. Last week, the U.S. Department of Justice announced that it had seized most of the ransom paid to members of DarkSide by Colonial Pipeline.

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Big Oil finds it hard to ignore pollution amid investor, court pressure

What comes up might go back down.

What comes up might go back down. (credit: Pete Markham)

Yesterday was a bad day to be an oil company.

First, a court in the Netherlands ruled that Royal Dutch Shell needs to slash its emissions more than it had planned in order to meet Paris Agreement targets. The court ordered the oil supermajor to cut carbon pollution by 45 percent by the end of the decade.

Next, shareholders of ExxonMobil elected at least two board candidates—and possibly a third—put forth by activist investors who want the company to rein in its sprawling oil and gas operations and invest more in clean energy.

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#carbon-emissions, #climate-change, #fossil-fuels, #oil-and-gas, #policy

Workrise, once known as RigUp, raises $300M at a $2.9B valuation

Workrise, which has built a workforce management platform for the skilled trades, announced today that it has raised $300 million in a Series E round led by UK-based Baillie Gifford that values the company at $2.9 billion.

New investor Franklin Templeton joined existing backers including Founders Fund, Bedrock Capital, Andreessen Horowitz (a16z), Moore Strategic Ventures, 137 Ventures and Brookfield Growth Partners in putting money in the round. WIth this latest financing, Workrise has now raised over $750 million.

You may know Austin-based Workrise better as its former name, RigUp. The company changed its name earlier this year to reflect a new emphasis on industries other than just oil and gas after the industry took a beating in recent years.

In 2020, Workrise laid off one-quarter of its corporate employees as the industry took an even bigger hit from the COVID-19 pandemic. It currently has over 600 employees in 25 offices.

Despite the rocky start to the year, Workrise apparently ended up rebounding. Its gross revenue has tripled since 2018, going from just under $300 million to about $900 million to close out 2020.

Workrise was founded in 2014 as a marketplace for on-demand services and skilled labor in the energy industry. In October 2019, it raised a $300 million Series D round led by Andreessen Horowitz(a16z) that valued the company at $1.9 billion.

Since then, Workrise has broadened its reach to include wind, solar, commercial construction and defense industries. In a nutshell, it connects skilled laborers with infrastructure and energy companies looking to staff and manage projects efficiently. Workrise’s online platform matches workers with over 500 companies in its network, manages payroll and benefits and provides access to training.

The company plans to use its new capital to continue to expand into new markets.

“The shift to clean energy and a redoubling of investment in infrastructure are opening up jobs that are desperately in need of filling,” said Workrise co-founder and CEO (and former energy investor) Xuan Yong in a statement. “Our platform makes it easier for skilled workers to find work and for companies to hire in-demand workers.”

Dave Bujnowski, investment manager at Baillie Gifford, points out that Workrise’s online management platform is “disrupting a sector that’s so far been slow to adopt new technologies.”

Workrise now serves more than 70 metro areas in the U.S., including Atlanta, where the company is matching trade workers with commercial construction companies, and in Broomfield, CO where the company trains and matches workers to jobs across the U.S. wind industry. 

The company also offers trade workers access to training that equips them for energy and infrastructure jobs that are on the rise. Last year, Workrise placed more than 4,500 workers, or nearly a third of all its workers placed in 2020, in renewable-energy jobs. 

Specifically, the company says in total, it placed 8,000 unique workers in jobs in 2019 with 13% in renewables. That number jumped to 15,000 in 2020.

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Building tech for worker safety, Guardhat Technologies is a company that could only come from Detroit

Saikat Dey, the founder of Detroit’s own Guardhat Technologies, got his start working in the steel industry. His last job, before founding Guardhat, was serving as the chief executive officer of Severstal International, the multinational steel conglomerate whose headquarters were in Dearborn, Mich.

There, managing the global business of the fourth largest steelmaker by volume and revenue, with 3,600 employees in Mississippi, Michigan, and the coal mines of West Virginia, Dey became obsessed with safety, he said.

Beyond tracking cash flow and EBITDA, the typical numbers companies use, Dey said that worker safety was another measurement that effected compensation. “One of the key metrics is how well and how safe we keep our frontline workers,” Dey said. 

Dey’s concerns over safety at his plants is what led him to reach out to union leadership and begin developing the technology that would form the core of Guardhat’s offerings.

The company pitches a multi-product intelligent safety system that integrates wearable technology and proprietary software to detect, alert, and prevent hazardous industrial work-related incidents.

Investors including Dan Gilbert’s Detroit Venture Partners, General Catalyst, and RTP Ventures, the venture investment firm led by Ru-Net Holdings co-founder, Leonid Boguslavsky, are backing Dey’s vision, which also has buy-in from the most important audience of all, the unions representing the workers that use the company’s tech.

Notes on the first day brainstorming session for Guardhat’s industrial wearable. Image Credit: Guardhat

Made in Detroit, built for the world’s industrial workers

Roughly fifteen workers are killed every day on the job in industrial jobs like mining, metals and oil and gas and another 3 million people are injured every year. For executives in the industry, the issue is as much a financial concern as it is an ethical one. At Severstal, 40 percent of Dey’s salary was tied to worker safety, he said.

In fact, the idea for Guardhat hit Dey while he was walking the floor of the company’s Detroit-area steel plant. On one of his regular walks through the factory Dey said he wandered past a man working on a piece of equipment when the employee’s carbon monoxide alarm started to buzz. Instead of trying to find the source of the leak, the man turned off his monitor.

“You’re taking about a steel facility in the heart of Detroit having the largest blast furnace in North America,” said Dey. “Whatever that individual was doing, it could have led to a catastrophic accident.”

That’s what inspired Guardhat’s technology that Dey said was designed to answer a few simple, situational questions that apply to any factory anywhere in the world: Where are you? What conditions do you face? When can help get to you? Those are the questions that Guardhat’s technology is designed to answer.

“We didn’t have effective means to prevent or if an accident happens to intervene with timely information,” Dey said. 

The technology may have been designed by executives, but it was made in consultation with the heads of the Detroit area unions, to ensure that workers would actually use the product.

We decided that we wanted to do this in September 2014,” Dey said. “And when I was struggling with whether to scratch that itch and start the business, the union guys said go for it and do it…. I was a person of color with a $6 billion P&L running one of the six largest steelmakers in the U.S. building this literally out of the garage. It took a lot of guts, stupidity, and it took a lot of support from regular friends at the UAW.” 

That collaboration ensured that the union’s workers were comfortable that the information wasn’t being generated and stored in a way that employees would not feel that they were being monitored unnecessarily or punitively.

Guardhat Technologies wearable safety helmet. Image Credit Guardhat Technologies

From prototype to product

The company’s first product was the HC1 — a helmet that comes jam-packed with sensor equipment. “You want to put it on something that everyone wears and is mandated to wear,” Dey said.

Initially the thought was to just create the wearable, but over time Dey and his team realized that the device alone wouldn’t be enough. “The helmet is just another form factor… [and] whatever the form factor, you need to know how you make this information the single source of truth for the platform of all things that surround the worker.”

Like dozens of other Detroit-area startups that came before them, when Dey and his team needed to raise cash, they first turned to Dan Gilbert.

Gilbert tested the prototype by running around a building and asking the GuardHat team if they could find him and tell him where they thought he was.

With Gilbert on board, the product design firm frog labs came into the picture and so did 3M. By then, it was time to test the prototype.

“I still remember the first day we were in testing in a third party certified lab in Akron, Ohio,” sad Dey. These guys were dropping a metal ball from 5 meters and each one of those puppies was $3,000 a-piece and 27 of those hats got ground down to powder,” Dey said. “We failed every test because we didn’t know how to build a helmet.”

Assistance from frog and others brought the device over the finish line and it’s now being used by over 5,000 workers and prevented or alerted workers to at least 2,000 potentially dangerous incidents. 

For Dey, the business could only have come from Detroit. “The Detroit thing is symbolic,” he said. It’s a symbol of the school of hard knocks that educated its founding team in the ways these heavy industries.

#chief-executive-officer, #dan-gilbert, #detroit, #detroit-venture-partners, #general-catalyst, #michigan, #mining, #oil-and-gas, #rtp-ventures, #tc, #wearable-technology

Andium is watching oil fields for emissions and just got money from the biggest oil companies to do it

Andium, a company focused on remote field monitoring of assets including oil and gas wells has just raised some not-insignificant cash in an investment round led by OGCI Climate Investments, a firm formed by the largest oil companies in the world.

Launched in 2014 to “support” the targets laid out in the Paris Agreement to limit global greenhouse gas emissions, OGCI has invested in 21 projects to date.

With Andium, the oil majors join existing investors including Tom Miglis, the former chief investment officer of Citadel Securities and Talis Capital in backing a company developing technologies for natural gas flare monitoring, tank telemetry and object detection.

The company said it provides oil and gas companies with real-time information from remote locations at a far lower cost than other solutions.

Few technologies are less exciting than sensors and monitoring equipment, but there are also few tech services that are more vital to staunching the flow of greenhouse gas emissions. As Mark Tomasovic, a partner at the renewable investment firm, Energize tweeted (to me), “A few companies are involved in monitoring and reducing methane emissions from producing oil and gas wells… Given that there are over [1 million] wells in the U.S. and methane is 28x more potent than CO2, these startups have had more of an impact on global climate change then Tesla.”

“We believe that visibility is paramount in change leadership and operational excellence, and our remote monitoring technologies are specifically designed to offer companies an expedited path to achieve their sustainability goals,” said Jory Schwach, the chief executive of Andium, in a statement.

Schwach, a serial entrepreneur whose previous forays into the business world included GlobalRim, a solar global positioning system company, and an offline communications service, started out developing a battery-powered tracking system for the logistics industry.

“I spent the better part of two years building a battery-powered tracking solution for long haul trailers so the market could replace brokers with ‘shared assets’. I failed fast and often on the hardware and realized that the real value was in the continually changing product requests that would be much more easily solved with a software change,” Schwach told the Medium publication Authority Magazine. “I decided that building a new kind of operating system for small devices could be big business if I leveraged the OS to customize products based on changing use cases while managing the hardware and infrastructure on behalf of the client.”

Andium’s technology uses off the shelf cameras and microphones with an artificial intelligence overlay to provide real-time monitoring of all sorts of industrial assets.

“The transparency created by monitoring and measuring methane is essential to reducing emissions,” said Pratima Rangarajan, CEO of OGCI Climate Investments.  “Andium’s low-cost innovative solution lowers the barrier for operators of all sizes to adopt and implement best practices and we are pleased to support their growth.”

#greenhouse-gas, #greenhouse-gas-emissions, #natural-gas, #oil-and-gas, #pollution, #talis-capital, #tc, #tesla, #united-states

A Supreme Court ruling affirming Canada’s carbon tax opens the door for a startup explosion

Last week the Canadian Supreme Court ruled that the national government’s plan to tax carbon emissions was legal in a decision that could have significant implications for the nation’s climate-focused startup companies.

The ruling put an end to roughly two years of legal challenges and could set the stage for a boom in funding and commercial support for Canadian startup companies developing technologies to curb greenhouse gas emissions, according to investors and entrepreneurs representing some of the world’s largest utilities and petrochemical companies.

“The high price on carbon has the potential to make Canada a powerhouse for scaling up breakthrough decarbonization technologies and for deploying solutions like carbon capture, industrial electrification, and hydrogen electrolysis,” said one investor who works with a fund that backs startups on behalf of large energy businesses.

This 2018 Greenhouse Gas Pricing Act is the cornerstone of the Canadian climate policy pushed through by Prime Minister Justin Trudeau. It establishes minimum pricing standards that all provinces have to meet but gives the provinces the ability to set higher prices. So far, seven of the nation’s 13 provinces are currently paying the “backstop” rate set by the national government.

That price is C$30 per tonne of carbon dioxide released, but is set to rise to C$170 per tonne by 2030. That figure is just a bit higher than the current prices that Californians are charged under the state’s carbon pricing plan and roughly four times the price on carbon set by the Northeastern Regional Greenhouse Gas Initiative.

Under the plan, much of the money raised through the tax levied by the Canadian government would be used to support projects and technologies that reduce greenhouse gas emissions or create more sustainable approaches to industry.

“Climate change is real. It is caused by greenhouse gas emissions resulting from human activities, and it poses a grave threat to humanity’s future,” Chief Justice Richard Wagner wrote, on behalf of the majority, in the Supreme Court ruling.

Three provinces — Alberta, Ontario, and Saskatchewan challenged the legality of the greenhouse gas policy, and Alberta’s challenge was allowed to proceed to the high court — holding up the national implementation of the pricing scheme.

With the roadblocks removed, entrepreneurs and investors around the world expect the carbon scheme to quickly boost the prospects of Canadian startups.

“This represents underlying government support and a huge pot of money. If you wanted macro support for an underlying shift in sectoral developments that could substantiate and support tech companies working on climate change mitigation what better then when the government has told you that we care about this and money is free?” said BeZero Carbon founder, Tommy Ricketts. “There couldn’t be a better condition for startups in Canada.”

Companies that stand to directly benefit from a carbon tax in Canada include businesses like Kanin Energy, which develops decarbonization projects, including waste heat to power; CERT, which is currently competing in the carbon Xprize and is working on a way to convert carbon dioxide to ethylene; and SeeO2, a company also working on carbon dioxide conversion technologies.

Geothermal technologies like Quaise and Eavor could also see a boost as will companies that focus on the electrification of the transportation industry in Canada.

Farther afield are the companies like Planetary Hydrogen, which combines hydrogen production and carbon capture in a way that also contributes to ocean de-acidification.

“Think about the gas at the pump. That is going to get charged extra,” said one investor who works for the venture arm of one of the largest oil and gas companies in the world, who was not authorized to speak to the press.  “For cleaner energy the price will definitely be reduced. And think about where this tax is going. Most of the tax is going to go to government funding into cleantech or climate-tech companies. So you have a double boost for startups in the carbon footprint reduction area.”

#articles, #canada, #greenhouse-gas-emissions, #justin-trudeau, #oil-and-gas, #supreme-court, #tc

Shell’s Gamechanger Accelerator selects three companies for its energy transition accelerator

Yesterday, the European oil and gas major producer Shell announced the latest cohort selected to participate in its Shell GameChanger Accelerator (GCxN), focused on supporting companies developing tech for the transition away from fossil fuels.

The three companies will have access to technical resources through Shell that can serve to aid in their commercialization.

“GCxN’s fourth cohort will help prove that electrochemistry technologies can replace carbon-intensive legacy processes. As renewable energy costs continue to drop, cross-industry initiatives and partnerships will prove that it’s possible to cost-effectively scale these technology applications and achieve real-world impact,” said Haibin Xu, Shell’s GCxN program manager.

Shell’s acceleartor provides startups selected for the program with up to $250,000 in non-dilutive financing. Participants are nominated by network partners coming from incubators, accelerators, and universities and then are subjected to a screening process by Shell and NREL. 

Graduates of the program have raised $52 million in the three prevoius batches and have added 51 new jobs to the green economy, according to a statement.

Each of the new companies in the cohort are focused on creating ways to reduce carbon emissions in sectors that are carbon intensive and hard to transition to more sustainable practices, according to a statement. 

So without further ado, here’s the latest batch of startups backed by Shell:

  • Air Company — This Brooklyn-based business is turning carbon dioxide into alcohols, spirits, fragrances, sanitizers and products for consumer industries. It eventually wants to get into the synthetic fuel business. 
  • Ionomr Innovations — Green hydrogen production, hydrogen fuel cells and carbon capture technologies require ion-exchange membranes and polymers, and this Vancouver-based company wants to make those components cheaper and more environmentally friendly.  
  • Versogen Hailing from President Joe Biden’s home state of Delaware, the company formerly known as W7 energy is producing high performance hydroxide exchange membranes to drive down the cost of fuel cells. 

“Almost every aspect of our modern lives depends on certain materials and fuels, but with great consequence. For example, the American manufacturing industry is on-track to become the nation’s largest source of greenhouse gas emissions within the next ten years,” said Katie Richardson, GCxN program manager at the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL), in a statement. “The selected GCxN startups are restructuring essential building blocks to reduce the carbon impact of essential goods and services.” 


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The Department of Defense is establishing a working group to focus on climate change

The U.S. Department of Defense is setting up a working group to focus on climate change.

The new group will be led by Joe Bryan, who was appointed as a Special Assistant to the Secretary of Defense focused on climate earlier this year.

The move is one of several steps that the Biden administration has taken to push an agenda that looks to address the dangers posed by global climate change.

Bryan, who previously served as Deputy Assistant to the Secretary of the Navy for Energy under the Obama administration, will oversee a group intended to coordinate the Department’s responses to Biden’s recent executive order and subsequent climate and energy-related directives and track implementation of climate and energy-related actions and progress, according to a statement.

The Department of Defense controls the purse strings for hundreds of billions of dollars in government spending and is a huge consumer of electricity, oil and gas, and industrial materials. Any steps it takes to improve the efficiency of its supply chain, reduce the emissions profile of its fleet of vehicles, and use renewable energy to power operations could make a huge contribution to the commercialization of renewable and sustainable technologies and a reduction in greenhouse gas emissions.

The Pentagon is already including security implications of climate change in its risk analyses, strategy development and planning guidance, according to the statement, and is including those risk analyses in its intallation planning, modeling, simulation and war gaming, and the National Defense Strategy.

“Whether it is increasing platform efficiency to improve freedom of action in contested logistics environments, or deploying new energy solutions to strengthen resilience of key capabilities at installations, our mission objectives are well aligned with our climate goals,” wrote Defense Secretary Lloyd Austin, in a statement. “The Department will leverage that alignment to modernize the force, strengthen our supply chains, identify opportunities to work closely with allies and partners, and compete with China for the energy technologies that are essential to our future success.”

#articles, #biden, #biden-administration, #china, #climate-change, #electricity, #energy, #executive, #greenhouse-gas-emissions, #navy, #oil-and-gas, #pentagon, #renewable-energy, #secretary, #simulation, #supply-chain, #tc

Mainspring Energy launches its flexible fuel generator with a $150 million NextEra Energy contract

Mainspring Energy, the developer of a new generator technology that use fuels like biogas and hydrogen, has unveiled its Mainspring Linear Generator, with a $150 million contract with NextEra Energy Resources.

The company’s technology represents a significant step in the transition to a zero-carbon power grid given its ability to shift between traditional natural gas sources and alternative fuel sources like biogas and hydrogen.

So far, the company’s generators are under contract with a national supermarket chain that’s using the company’s tech at 30 of its grocery stores. The company began shipping pilot units in June and will begin commerical statements in mid-2021 according to a statement.

The company’s tech was initially developed at a thermodynamics lab in Stanford University where co-founders Shannon Miller, Matt Svrcek and Adam Simpson were working. Its design enables the rollout of generators that can replace traditional diesel and be used to improve the resilience of industrial sites against natural disasters.

Their linear generator, which the company said differs from engines, microturbines, and fuel cells, is a device that converts motion along a straight line into electricity using heat or chemical energy. In Mainspring’s case, a low temperature reaction of air and fuel drives magnets through copper coils to produce electricity.

It’s the combination of the design and control software developed by the company that allows its equipment to produce high-efficiency, dispatchable power, without the nitrogen oxide emissions associated with other generators, the company said.

The technology caught the eye of investors like Bill Gates and Vinod Khosla’s eponymous investment firm Khosla Ventures, along with some oil and gas companies like Equinor and utilities like American Electric Power. To date, Mainspring, which used to go by the name Etagen, has raised well over $80 million in financing.

In its approach to energy generation without the need for more complex mechanical systems or catalysts, Mainspring is akin to other startups like the Robert Downey Jr. and Bill Gates-backed Turntide Technologies that are trying to provide more elegant, software enabled solutions to motors and generator technologies.

Mainspring’s generators achieve their low capital and maintenance costs through use of standard materials, only two moving parts, and an innovative air bearing system that eliminates the need for oil, the company said. It operates without the use of complex mechanical systems or expensive catalysts.

The company also touted its ability to spin up and spin down in response to conditions on the energy grid, which means that it can pair well with solar power or battery storage.

“One of our customers’ key drivers, in addition to carbon savings, is to save cost from their current grid prices,” said Miller, in a statement. “Our products can provide substantial savings to commercial customers on their electricity costs with a typical Energy Services Agreement. In this energy-as-a-service scenario, customers pay nothing up front and realize annual savings starting in the first year.”

Mainspring’s first commercial product is designed for a rated output of 250 kW and packaged in a standard 8′ x 20′ container, according to a statement. Those packages integrate two of the company’s125 kW linear generator cores, working in tandem, and combines UL-listed grid-tie inverters and auxiliaries into a turn-key package, the company said. Future configurations will provide higher power output to serve industrial businesses, data centers, hospitals, smart cities, and utility grid-level applications.

“Many commercial and industrial customers as well as utilities want clean, reliable power generation, with the capability to switch to 100% renewable fuels like biogas and hydrogen as they become available,” said NextEra Energy Resources President and CEO John Ketchum, in a statement. “Mainspring is able to integrate clean onsite generation with both renewables and the grid and we’re pleased to support bringing this innovative product to market.” 

#alternative-energy, #american-electric-power, #articles, #bill-gates, #biogas, #electrical-grid, #electricity, #energy, #energy-storage, #fuel-cells, #khosla-ventures, #oil, #oil-and-gas, #renewable-energy, #solar-power, #stanford-university, #tc, #turntide-technologies, #vinod-khosla

Volta Energy Technologies raises over $90M of a targeted $150M fund to back energy storage startups

Volta Energy Technologies, the energy investment and advisory services firm backed by some of the biggest names in energy and energy storage materials, has closed on nearly $90 million of a targeted $150 million investment fund, according to people familiar with the group’s plans.

The venture investment vehicle compliments an $180 million existing commitment from Volta’s four corporate backers — Equinor, Albermarle, Epsilon, and Hanon Systems — and comes at a time when interest in energy storage technologies couldn’t be stronger. 

As the transition away from internal combustion engines and hydrocarbon fuels begins in earnest companies are scrambling to drive down costs and improve performance of battery technologies that will be necessary to power millions of electric cars and store massive amounts of renewable energy that still needs to be developed.

“Capital markets have noticed the enormity of the opportunity in transitioning away from carbon,” said Jeff Chamberlain, Volta’s founder and chief executive.

Born of an idea that that began in 2012 when Chamberlain began talking with the head of the Department of Energy under the Obama Administration back in 2014. What began when Chamberlain was at Argonne National Lab leading the development of JCESR, the lead lab in the US government’s battery research consortium, evolved into Volta Energy as Chamberlain pitched a private sector investment partner that could leverage the best research from National Laboratories and the work being done by private industry to find the best technology.

Support for the Volta project remained strong through both public and private institutions, according to Chamberlain. Even under the Trump Administration, Volta’s initiative was able to thrive and wrangle some of the biggest names in the chemicals, utility, oil and gas and industrial thermal management to invest in a $180 million fund that could be evergreen, Chamberlain said.

According to people with knowledge of the organizations plans, the new investment fund which is targeting $150 million but has hard cap of $225 million would compliment the existing investment vehicle to give the firm more firepower as additional capital floods into the battery industry.

Chamberlain declined to comment specifically on the fund, given restrictions, but did say that his firm had a mandate to invest in technology that is battery and storage related and that “enables the ubiquitous adoption of electric vehicles and the ubiquitous adoption of solar and wind.”

Back during the first cleantech boom the brains behind Volta witnessed a lot of good money getting poured into bad ideas and vaporware that would never amount to commercial success, said Chamberlain. Volta was formed to educate investors on the real opportunities that scientists were tracking in energy storage and back those companies with dollars.

“We knew that investors were throwing money into a dumpster fire. We knew it could have a negative impact on this transition to carbon,” Chamberlain said. “Our whole objective was to help guide individuals deploying massive amounts of their personal wealth and move it from putting money into an ongoing dumpster fire.”

That mission has become even more important as more money floods into the battery market, Chamberlain said.

The SPAC craze set off by Nikola’s public offering in electric vehicles and continuing through QuantumScape’s battery SPAC through a slew of other electric vehicle offerings and into EV charging and battery companies has made the stakes higher for everyone, he said.

Chamberlain thinks of Volta’s mission as finding the best emerging technologies that are coming to market across the battery and power management supply chain and ensure that as manufacturing capacity comes online, the technology is ready to meet growing demand.

“Investors who do not truly understand the energy storage ecosystem and its underlying technology challenges are at a distinct disadvantage,” said Goldman Sachs veteran and early Volta investor Randy Rochman, in a statement. “It has become abundantly clear to me that nothing happens in the world of energy storage without Volta’s knowledge. I can think of no better team to identify energy storage investment opportunities and avoid pitfalls.”  

The new fund from Volta has already backed a number of new energy storage and enabling technologies including: Natron, which develops high-power, fire-safe Sodium-ion batteries using Prussian blue chemistry for applications that demand a quick discharge of power; Smart Wires, which develops hardware that acts as a router for electricity to travel across underutilized power lines to optimize the integration of renewable power and energy storage on the grid; and Ionic Materials, which makes solid lithium batteries for both transportation and grid applications. Ionic Materials’ platform technology also enables breakthrough advancements in other growing markets, such as 5G mobile, and rechargeable alkaline batteries. 

 

#chemicals, #department-of-energy, #electric-car, #electric-vehicle, #energy, #energy-storage, #head, #lithium-ion-battery, #nikola, #oil-and-gas, #renewable-energy, #tc, #transport, #trump-administration, #united-states, #us-government

Planning 500,000 charging points for EVs by 2025, Shell becomes the latest company swept up in EV charging boom

Shell’s plan to roll out 500,000 electric charging station in just four years is the latest sign of an EV charging infrastructure boom that has prompted investors to pour cash into the industry and inspired a few companies to become public companies in search of the capital needed to meet demand.

Since the beginning of the year, three companies have been acquired by special purpose acquisition vehicles and are on a path to go public, while a third has raised tens of millions from some of the biggest names in private equity investing for its own path to commercial viability.

The SPAC attack began in September when an electric vehicle charging network ChargePoint struck a deal to merge with special-purpose acquisition company Switchback Energy Acquisition Corporation, with a market valuation of $2.4 billion. The company’s public listing will debut February 16 on the New York Stock Exchange.

In January, EVgo, an owner and operator of electric vehicle charging infrastructure, agreed to merge with the SPAC Climate Change Crisis Real Impact I Acquisition for a valuation of $2.6 billion— a huge win for the company’s privately held owner, the power development and investment company LS Power. LS Power and EVgo management, which today own 100% of the company will be rolling all of its equity into the transaction. Once the transaction closes in the second quarter, LS Power and EVgo will hold a 74% stake in the newly combined company.

One more deal soon followed. Volta Industries agreed to merge this month with Tortoise Acquisition II, a tie-up that would give the charging company named after battery inventor Alessandro Volta a $1.4 billion valuation. The deal sent shares of the SPAC company, trading under the ticker SNPR, rocketing up 31.9% in trading earlier this week to $17.01. The stock is currently trading around $15 per-share.

 

Not to be outdone, private equity firms are also getting into the game. Riverstone Holdings, one of the biggest names in private equity energy investment, placed its own bet on the charging space with an investment in FreeWire. That company raised $50 million in new round of funding earlier this year.

“The writing is on the wall and the investors have to take the time. There’s been a flight out of the traditional investment opportunities in markets,” said FreeWire chief executive, Arcady Sosinov, in an interview. “There’s been a flight out fo the oil and gas companies and out fo the traditional utilities. You have to look at other opportunities… This is going to be the largest growth opportunity of the next ten years.”

FreeWire deploys its infrastructure with BP currently, but the company’s charging technology can be rolled out to fast food companies, post offices, grocery stores, or anywhere where people go and spend somewhere between 20 minutes and an hour. With the Biden Administration’s plan to boost EV adoption in federal fleets, post offices actually represent another big opportunity for charging networks, Sosinov said.

“One of the reasons we find electrification of mobility so attractive is because it’s not if or how, it’s when,” said Robert Tichio, a partner at Riverstone in charge of the firm’s ESG efforts. “Penetration rates are incredibly low… compare that to Norway or Northern Europe. They have already achieved double digit percentages.”

A recent Super Bowl commercial from GM featuring Will Farrell showed just how far ahead Norway is when it comes to electric vehicle adoption. 

“The demands onc capital in the electrification of transport will begin to approach three quarters of a trillion annually,” Tichio said. “The short answer to your question is that the needs for capital now that we have collectively, politically, socially economically come to a consensus in terms of where we’re going and we couldn’t say that 18 months ago is going to be at a tipping point.”

Shell already has electric vehicle charging infrastructure that it has deployed in some markets. Back in 2019 the company acquired the Los Angeles-based company Greenlots, an EV charging developer. And earlier this year Shell made another move into electric vehicle charging with the acquisition of Ubitricity in the UK.

“As our customers’ needs evolve, we will increasingly offer a range of alternative energy sources, supported by digital technologies, to give people choice and the flexibility, wherever they need to go and whatever they drive,” said Mark Gainsborough, Executive Vice President, New Energies for Shell, in a statement at the time of the Greenlots acquisition. “This latest investment in meeting the low-carbon energy needs of US drivers today is part of our wider efforts to make a better tomorrow. It is a step towards making EV charging more accessible and more attractive to utilities, businesses and communities.”

 

#biden-administration, #chargepoint, #charging-station, #corporate-finance, #economy, #electric-vehicle, #electric-vehicles, #evgo, #food, #greenlots, #inductive-charging, #los-angeles, #norway, #nrg-energy, #oil-and-gas, #partner, #private-equity, #riverstone-holdings, #special-purpose-acquisition-company, #super-bowl, #tc, #ubitricity, #united-kingdom, #united-states

EV charging stations, biofuels, the hydrogen transition and chemicals are pillars of Shell’s climate plan

Royal Dutch Shell Group, one of the largest publicly traded oil producers in the world, just laid out its plan for how the company will survive in a zero-emission, climate conscious world.

It’s a plan that rests on five main pillars that include the massive rollout of electric vehicle charging stations; a greater emphasis on lubricants, chemicals, and biofuels; the development of a significantly larger renewable energy generation portfolio and carbon offset plan; and the continued development of hydrogen and natural gas assets while slashing oil production by 1% to 2% per year and investing heavily in carbon capture and storage.

These four large categories cut across the company’s business operations and represent one of the most comprehensive (if high level) plans from a major oil company on how to keep their industry from becoming the next victim of the transition to low emission (and eventually) zero emission energy and power sources (I’m looking at you, coal industry).

“Our accelerated strategy will drive down carbon emissions and will deliver value for our shareholders, our customers and wider society,” said Royal Dutch Shell Chief Executive Officer, Ben van Beurden, in a statement.

To keep those shareholders from abandoning ship, the company also committed to slashing costs and boosting its dividend per share by around 4% per year. That means giving money back to investors that might have been spent on expensive oil and gas exploration operations. The company also committed too pay down its debt and make its payouts to shareholders 20% to 30% of its cash flow from operations. That’s… very generous.

gas vs electric vehicles

Image Credits: Bryce Durbin

The Plan

Shell is a massive business with more than 1 million commercial and industrial customers and about 30 million customers coming to its 46,000 retail service stations daily, according to the company’s own estimates. The company organized its thinking around what it sees as growth opportunities, energy transition opportunities, and then the gradual obsolescence of its upstream drilling and petroleum production operations.

In what it sees as areas for growth, Shell intends to invest around $5 billion to $6 billion to its initiatives including the development of 500,000 electric vehicle charging locations by 2025 (up from 60,000 today) and an attendant boost in retail and service locations to facilitate charging.

The company also said it would be investing heavily in the expansion of biofuels and renewable energy generation and carbon offsets. The company wants to generate 560 terawatt hours a year by 2030, which is double the amount of electricity it generates today. Expect to see Shell operate as an independent power producer that will provide renewable energy generation as a service to an expected 15 million retail and commercial customers.

Finally the company sees the hydrogen economy as another area where it can grow.

In places where Shell already has assets that can be transitioned to the low carbon economy, the company’s going to be doubling down on its bets. That means zero emission natural gas production and a trebling down on chemicals manufacturing (watch out Dow and BASF). That means more recycling as well, as the company intends to process 1 million tons of plastic waste to produce circular chemicals.

Upstream, which was the heart of the oil and gas business for years, the company said it would “focus on value over volume” in a statement. What that means in practice is looking for easier, low cost wells to drill (something that points to the continued importance of the Middle East in the oil economy for the foreseeable future). The company expects to reduce its oil production by around 1% to 2% per year. And the company’s going to be investing in carbon capture and storage to the tune of 25 million tons per year through projects like the Quest CCS development in Canada, Norway’s Northern Lights project, and the Porthos project n the Netherlands.

“We must give our customers the products and services they want and need – products that have the lowest environmental impact,” van Beurden said in a statement.”At the same time, we will use our established strengths to build on our competitive portfolio as we make the transition to be a net-zero emissions business in step with society.”

Money or finance green pattern with dollar banknotes. Banking, cashback, payment, e-commerce. Vector background.

Money talk

For the company to survive in a world where revenues from its main business are cut, it’s also going to be keeping operating expenses down and will be looking to sell off big chunks of the business that no longer make sense.

That means expenses of no more than $35 billion per year and sales of around $4 billion per year to keep those dividends and cash to investors flowing.

“Over time the balance of capital spending will shift towards the businesses in the Growth pillar, attracting around half of the additional capital spend,” the company said. “Cash flow will follow the same trend and in the long term will become less exposed to oil and gas prices, with a stronger link to broader economic growth.”

Shell set targets for reducing its carbon intensity as part of the pay that’s going to all of the company’s staff and those targets are… eye opening. It’s looking at reductions in carbon intensity of 6-8% by 2023, 20% by 2030, 45% by 2035 and 100% by 2050, using a baseline of 2016 as its benchmark.

The company said that its own carbon emissions peaked in 2018 at 1.7 giga-tons per year and its oil production peaked in 2019.

The context

Shell’s not taking these steps because it wants to, necessarily. The writing is on the wall that unless something dramatic is done to stop fossil fuel pollution and climate change, the world faces serious consequences.

A study released earlier this week indicated that air pollution from fossil fuels killed 18% of the world’s population. That means burning fossil fuels is almost as deadly as cancer, according to the study from researchers led by Harvard University.

Beyond the human toll directly tied to fossil fuels, there’s the huge cost of climate change, which the U.S. estimated could cost $500 billion per year by 2090 unless steps are taken to reverse course.

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China launched its national carbon trading market yesterday

Yesterday, China flipped the switch on a nationwide carbon trading market, in what could be one of the most significant steps taken to reduce greenhouse gas emissions in 2021 — if the markets can work effectively.

China is the world’s largest emitter of greenhouse gases and its share of the world’s emissions output continues to climb.

As the Chinese government works to curb its environmental impact, policies like a carbon trading system could spur the adoption of new technologies, increasing demand for goods and services from domestic startups and tech companies around the world.

Carbon markets, implemented in some parts of the U.S. and widely across Europe, put a price on industrial emissions and force companies to offset those emissions by investing in projects that would remove an equivalent portion of greenhouse gases from the atmosphere.

They’re a key component of the 2015 Paris Agreement, but they’re also a controversial one. That’s because if they’re not implemented properly and managed effectively they can be a “massive loophole” for emitters, as Gilles Dufrasne, policy officer at Carbon Markets Watch, told Time last year.

This is especially true of China. Corruption in China is endemic and the country has long sacrificed environmental policy and stewardship at the altar of economic growth. China’s not alone in making that calculus, but the decisions have happened at a scale orders of magnitude larger than almost any other nation (with the exception of the U.S.)

The efficacy of the policy is also effected by the hierarchies that exist within the bureaucracy of the Chinese Communist Party. As ChinaDialogue noted, the measures were issued by the Ministry of Ecology and Environment, which carry lower legal authority than if they came from the NDRC, the leading governing body for macroeconomic policy across China and the overseer of the nation’s major economic initiatives.

That said, no country as large as China, which accounts for 28% of the world’s greenhouse gas emissions, has ever implemented a national carbon emissions trading market.

BEIJING, CHINA – MARCH 20: Chinese President Xi Jinping delivers a speech during the closing session of the National People’s Congress (NPC) at the Great Hall of the People on March 20, 2018 in Beijing, China. (Photo by Lintao Zhang/Getty Images)

China first started testing regional emissions trading systems back in 2011 in Shenzhen, Shanghai, Beijing, Guangdong, Tianjin, Hubei, Chongqing and Fujian. Using a system that instituted caps on emissions based on carbon intensity (emissions per unit of GDP) rather than an absolute emissions cap, the Chinese government began rolling out these pilots across its power sector and to other industries.

After a restructuring in 2018, the plan, which was initially drafted under the auspices of the National Development and Reform Commission was kicked down to the Ministry of Ecology and the Environment. The devolution of China’s cap and trade emissions program came as the United States was withdrawing from the Paris Agreement amid an abdication of climate regulation or initiatives under the Presidency of Donald Trump.

Initially intended to begin with trading simulations in 2020, China’s emissions schemes were derailed by the COVID-19 pandemic and pushed back to the back half of the year with an implementation of actual trading starting yesterday.

For now, the emissions trading system covers China’s power industry and roughly 2,000 energy generation facilities. That alone represents 30% of the nation’s total emissions and over time the trading system will encompass heavy industry like cement, steel, aluminum, chemicals and oil and gas, according to ChinaDialogue.

Initially, the government is allocating emissions allowances for free and will begin auctioning allowances “at the appropriate time according to the situation.”

That kind of language, and concerns raised by state-owned enterprises and financial services firms flagging the effect carbon pricing could have on profitability and lending risk shows that the government in Beijing is still putting more weight on the economic benefits rather than environmental costs of much of its industrial growth.

That said, a survey of market participants cited by ChinaDialogue indicated that prices are expected to start at 41 yuan (US$6.3) per ton of CO2 and rise to 66 yuan per ton in 2025. The price of carbon in China is expected to hit 77 yuan by 2030.

Meanwhile, a commission on carbon prices formed in 2017 and helmed by the economists Joseph Stiglitz and Nicholas Stern indicated that carbon needed to be priced at somewhere between $40 and $80 by 2020 and somewhere in the $50 to $100 range by 2030 if the markets and prices were to have any impact on behavior.

No nation has actually hit those price targets, although the European Union has come the closest — and seen the most reduction in greenhouse gas emissions as a result.

Still, the plan from the Chinese government does include public reporting requirements for verified company-level emissions. And the existence of a market, if the government decides to put real prices in place and consequences for flouting the system, could be a huge boon for the monitoring and management equipment startups that are developing tech to track emissions.

As the analysts at ChinaDialogue note:

“The hardest part of carbon pricing is often getting it started. The moment that the Chinese government decides to increase ambition with the national ETS, it can. The mechanism is now in place, and it can be ramped up if the momentum and political will provided by President Xi’s climate ambition continues. In the coming years, this could see an absolute and decreasing cap, more sectors covered, more transparent data provision and more effective cross-government coordination. This is especially so with energy and industrial regulators who will need to see the ETS not as a threat to their turf, but as a measure with significant co-benefits for their own policy objectives.”

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A Biden presidency doesn’t need a Green New Deal to make progress on climate change

Even without a Green New Deal, the sweeping set of climate-related initiatives many Democrats are pushing for, President-elect Joe Biden will have plenty of opportunities to move ahead with much of the ambitious energy transformation plan as part of any infrastructure or stimulus package.

Should Republicans manage to maintain control of the Senate, there are still several opportunities to build climate-friendly policies into the infrastructure and stimulus bills Congress will be pushing through as its first orders of business, according to experts, investors and advisors to the President-elect.

That’s good news for established companies and the wave of startups focused on technologies to reduce greenhouse gas emissions that cause global climate change. And these changes could happen despite intransigence from even moderate Republicans like Mitt Romney on climate issues.

“I think people are saying that conservative principles still account for a majority of public opinion in our country,” Romney said on “Meet the Press” Sunday. “I don’t think they want to sign up for a Green New Deal. I don’t think they want to sign up for getting rid of coal or oil or gas. I don’t think they’re interested in Medicare for All or higher taxes that would slow down the economy.”

Already, current market conditions are forcing some of the largest oil, gas and energy companies to transition to renewables. As those companies begin closing refineries in the U.S., Congress is going to feel increasing pressure to find a way to replace those jobs.

For instance, Shell announced earlier this month in Louisiana that it was closing a factory and laying off roughly 650 workers. The closure is primarily due to declining demand for oil brought about by the COVID-19 pandemic, but both Netherlands-headquartered Shell and its U.K.-based counterpart BP believe fossil fuel consumption may have reached its peak in 2019 and is headed for long-term decline.

U.S. oil and gas giants aren’t immune from the economic impacts of COVID-19 and a global shift away from fossil fuels either. Two of the largest companies, Chevron and ExxonMobil, have seen their share prices decline over the past year as the oil industry reckons with steep reductions in demand and other market pressures.

Meanwhile, some of the nation’s largest utilities are working to phase out fossil fuel-based power generation.

The markets are already supporting the transition to renewable energy, without much government guidance, at least here in the U.S. So against this backdrop, the question isn’t if the government should be supporting the transition to renewable energy, but how quickly stimulus can be mobilized to save American jobs.

“A lot of the really consequential climate-related stuff that’s going to come out in the [near term] … won’t actually be related to renewables,” an advisor to the President-elect said.

So the questions become: What will economic stimulus look like? How will it be distributed? and how will it be financed?

Economic stimulus, COVID-19 and climate

President-elect Biden has already spelled out the first priorities for his incoming administration. While trying to manage the COVID-19 pandemic that has already killed over 238,000 Americans comes first, dealing with the economic fallout caused by the response to the pandemic will quickly follow.

Climate-friendly initiatives will loom large in that effort, analysts and advisors indicate, and could be a boon to new technology companies — as well as longtime players in the fossil fuels business.

“If we are going to be spending that money, there is an enormous opportunity to make sure that these investments are moving us forward and not recreating problems,” said one advisor to the Biden campaign earlier this year.

To understand how the trillions of dollars that are up for grabs will be spent, it’s helpful to think in terms of short-, medium- and long-term goals.

In the short term, the focus will be on “shovel-ready” projects that can be spun up as quickly as possible. These would be initiatives like environmental retrofits and building upgrades; repairing and upgrading water systems and electricity grids; providing more manufacturing incentives for electric vehicles; and potentially boosting money for environmental remediation and reclamation projects.

In all, that spending could total $750 billion by some estimates and would be used to get Americans back to work with a focus on industrial and manufacturing jobs that could have long-term benefits for the national economy — especially if that spending targets the government-designated Opportunity Zones carved out around the country to help low-income rural and urban communities.

If these efforts incorporate Opportunity Zones, there’s a chance to deploy the cash even faster. And if there are ways to preferentially rank infrastructure projects that also include a tech component, then that’s even better for startups who have managed to overcome hurdles associated with technology risk.

“Any time you craft policy, especially federal policy, you have to be so careful that the incentives line up correctly with what you’re trying to achieve,” said a Biden advisor.

Medium- and longer-term goals will likely require more time to plan and develop, because they’re relying on newer technologies in some cases, or they will have to wind their way through the planning process at the local and state levels before they can receive federal funds to begin construction.

Expect another $60 billion to be spent on these projects to finance development, workforce training and reskilling to prepare a labor force for a different kind of labor market.

Incentives over mandates 

One of the biggest risks that Biden administration climate policies face is the potential for legal challenges heard before an increasingly sympathetic conservative judiciary appointed under the Trump administration.

These challenges could force the Biden team to emphasize the financial benefits of adopting business-friendly carrots over regulatory sticks.

“Whenever possible you do want to let the markets figure themselves out,” said the advisor to the President-elect. “You always want to default to incentives rather than mandates.”

Coming off of the news this week that Pfizer has received positive results for its vaccine, there are some models from the current administration’s progress on a COVID-19 vaccine that can be instructive.

While Pfizer wasn’t involved in the Operation Warp Speed program created by the Department of Health and Human Services, the company did cut a $2 billion deal with the government that guaranteed a market for its vaccines.

The type of public-private partnerships that Connecticut Senator Chris Murphy mentions could also be employed in the climate space — especially in areas that will be hardest hit by the transition away from coal.

Some of that spending guarantee could come in the form of environmental remediation for orphaned natural gas wells or coal mining operations — especially in regions of the country like the Dakotas, Montana, West Virginia and Wyoming, that would be hardest hit by a transition away from fossil fuels. Some could come from the development of new geothermal engineering projects that require the same kind of skills that engineering firms and oil companies have developed over the past decades.

And, there’s the looming promise of a hydrogen-based economy, which could take advantage of some of the existing oil-and-gas infrastructure and expertise that exists in the country to transition to a cleaner energy future (n.b., that’s not necessarily a clean energy future, but it’s a cleaner one).

Already, nations like Japan are building the groundwork for replacing oil with hydrogen fuels, and these kinds of incentive-based programs and public-private partnerships could be a big boost for startups in a number of industries as well.

Image Credits: Cameron Davidson/Getty Images

Sharing the wealth (rural edition)

Any policies that a Biden administration enacts would have to focus on economic opportunity broadly, and much of the proposed plan from the campaign fulfills that need. One of its key propositions was that it would be “creating good, union, middle-class jobs in communities left behind, righting wrongs in communities that bear the brunt of pollution, and lifting up the best ideas from across our great nation — rural, urban and tribal,” according to the transition website.

An early emphasis on grid and utility infrastructure could create significant opportunities for job creation across America — and be a boost for technology companies.

“Our electric power infrastructure is old, aging and not secure,” said Abe Yokell, co-founder of the energy and climate-focused venture capital firm Congruent Ventures. “From an infrastructure standpoint, transmission distribution really should be upgraded and has been underinvested over the years. And it is in direct alignment with providing renewable energy deployment across the U.S. and the electrification of everything.”

Combining electric infrastructure revitalization with new broadband capabilities and monitoring technologies for power and water would be a massive windfall for companies like Verizon (which owns TechCrunch), and other networking companies. It also provides utilities with a way to adjust their rates (which they appreciate).

Those infrastructure upgrades are also useful in helping utilities find a way to repurpose stranded coal assets that are both costly and — increasingly — useless.

“Coal … it doesn’t make sense to burn coal anymore,” Yokell said. “People are doing it even though it’s out of the money for liability reasons … everyone is looking to retire coal even in the assets.”

If those assets can be decommissioned and repurposed to act as nodes on a distributed energy grid using energy storage to smooth capacity in the same way that those coal plants used to, “it’s a massive win,” according to Yokell. Adoption of energy storage used to be a cost issue, Yokell said. “It’s now a siting issue.”

Repowering old hydroelectric assets with newer, more efficient technologies offer another way to move the needle with shovel-ready projects and is an area where startups could stand to benefit from the push. It’s also a way to bring jobs to rural communities.

The promise of infrastructure spending can be born out across urban and rural areas, but the stimulus benefits don’t end there.

For rural communities there are business opportunities in “climate-smart agriculture, resilience and conservation, including 250,000 jobs plugging abandoned oil and natural gas wells and reclaiming abandoned coal, hardrock and uranium mines,” as the Biden transition team notes. And there’s a huge opportunity for oil industry workers to find jobs in the new and growing tech-enabled geothermal energy industry.

The farm subsidies that have skyrocketed under the Trump administration could continue, just with a more climate-focused bent. Instead of literally giving away the farm to the tune of a projected $46 billion that the Trump administration will hand out to farmers over the course of 2020, payouts could be predicated on “carbon farming.” Wooing the farm vote with the promise of payouts for carbon sequestration could be a way to restart a conversation around a carbon price (a largely failed prospect in government circles). Beyond carbon sequestration, rapid innovations in synthetic biology for biomaterials, coatings and even food could take advantage of the big biofuel fermenters and feedstocks in the Midwest to enable a new biomanufacturing industry.

Furthermore, the expansion of rail lines thanks to the fracking and oil boom means opportunities and the potential to build out other types of manufacturing capacity that can be transported across the U.S.

vw-plant-tennessee

Volkswagen broke ground Wednesday, November 13, 2019 on an $800 million factory expansion in Tennessee that will be the North American hub of its electric vehicle plans. Image Credits: Volkswagen

Sharing the wealth (urban edition) 

The same spending that could juice rural economies can be equally applied in America’s largest cities. Any movement to boost the auto industry through incentives around electric vehicles or federal mandates to upgrade fleets would do wonders for automakers and the original equipment manufacturers that supply them.

Public-private partnerships for urban infrastructure could first receive support from funds devoted to planning and managing upgrades. That could boost the adoption of new tech from startup companies around the country, while creating new jobs for a significant number of workers through implementation.

One large area where urban economic revitalization and climate policies can intersect is in the relatively unsexy area of weatherization, energy efficient appliance installation and building retrofits.

“Local governments across the country are highly interested in the green economy and transitioning to the low-carbon economy,” said Lauren Zullo, the director of environmental impact at the real estate management firm, Jonathan Rose Companies. “Cities are really looking to partner with the private real estate sector because they know we’re going to have to get buildings involved in the green economy. And any work that you do retrofitting local buildings is literally local economy.”

By channeling dollars into green retrofits and the deployment of distributed renewable energy, local economies will get a huge boost — and one that disproportionately will go to helping the communities that have been on the front lines of climate change.

You saw … a lot of investment made just this way out of the Recovery Act,” Zullo said, referring to the American Recovery and Reinvestment Act of 2009, the stimulus bill passed in the first term of the Obama administration. “A lot of [funds] focused on low-income weatherization that were earmarked for low income and affordable housing. [Those] funds have allowed us to reduce energy consumption anywhere from 30% to 50% … and being able to gain those utility cost savings have been transformational to those communities.”

Why are these programs so important? Zullo explained further, “Low-income folks are disproportionately burdened by utility and energy costs. Any sort of energy-saving opportunities that we can earmark or target in these low-income communities is truly impactful … not just on a carbon footprint, but on the lives and success of these low-income communities.”

Paying for it

For even this more-modest legislation to make it through Congress, a Biden administration will have to answer the questions of who would pay for the stimulus and how it would get distributed.

In a tweet, the political commentator Matthew Yglesias proffered that the country could afford “to throw an ice cream party.” That policy would enable Republicans to keep the tax cuts while allowing the government to continue to spend on stimulus measures.

“[Interest] rates are very low. The country can afford an ice cream option where we spend money on some good things and ‘offset’ with tax cuts,” Yglesias wrote.

To distribute the funds, Congress could set up a body similar to the Reconstruction Finance Corporation (RFC), which was established by Herbert Hoover’s administration back at the start of the Great Depression. It was expanded under Franklin Delano Roosevelt to disburse funds to financial institutions, farms and corporations at risk of collapse.

While the success of the institution itself is somewhat murky, the RFC along with federal deposit insurance and the related Commodity Credit Corporation (which, unlike the RFC, still exists) laid the groundwork for the country to emerge from the Great Depression and gear up manufacturing to engage with a world at war in the 1940s.

The durability of the CCC could provide a model for any infrastructure credit corporation that the government may want to establish.

Some investors support the idea. “It’s more about channeling dollars to state, municipal or private businesses with the ability to underwrite heavily subsidized loans to any entity proposing a modern infrastructure project that could be paid through municipal bonds or tolling,” said one investor in the infrastructure space. “It would offer a credit backstop to anyone who wanted to invest in infrastructure and could have a technological requirement associated with it.”

Several investors suggested that capital from loans paid out through the infrastructure bank could finance the reshoring of industry, with potential tax revenues from the businesses offsetting some of the costs of the loans. Some of these measures could have additional economic benefits if the loans get funneled through local financial institutions as well.

“If you think about a vehicle to deliver these funds, you already have an existing architecture to deliver this … which is the municipal bond market,” said Mark Paris, a managing partner at Urban.us, a venture capital fund focused on urban infrastructure. 

The infrastructure answer

There’s no shortage of levers that the Biden administration can pull to reverse the course of the Trump administration’s policies on climate change, but many of these federal policy changes are likely to face challenges in courts.

Vox’s David Roberts has an excellent run down of some of the direct actions that Biden can take along the path toward decarbonization of the U.S. economy. They include restoring the over 125 climate and environmental regulations that the Trump presidency reversed or rolled back; working with the Environmental Protection Agency to develop a new, more sweeping version of the original Obama-era Clean Power Plan; push the Department of Transportation’s development of new fuel economy standards; and supporting California’s own, very aggressive vehicle standards.

Biden can also encourage financial markets to make more of an effort to price climate risk into their financial models for investment, which would further encourage investment in climate-friendly businesses and a divestment from fossil fuels, as Roberts notes.

Some of America’s largest financial services institutions are already doing just that, and oil-and-gas companies are wrestling with the need to transition to renewable or emission-free fuels as their share prices take a pummeling and demand plummets on the back of the COVID-19 pandemic.

As Mother Jones suggested last year, a Biden administration could declare climate change a national security emergency, in the same way that the Trump administration declared immigration to be a national security emergency. That would give Biden extensive powers to reshape the economy and directly influence industrial policy.

Declaring a national climate emergency would give Biden the powers he needs to enact much of the infrastructure initiatives that comprise the President-elect’s energy plan, but not a popular mandate to support it.

Before taking that step, Biden may choose to try and exhaust all legislative options first. In a divided Congress that means focusing on infrastructure, jobs and industry incentives.

“The impacts of climate change don’t pick and choose. That’s because it’s not a partisan phenomenon. It’s science. And our response should be the same. Grounded in science. Acting together. All of us,” Biden said in a September speech.

“These are concrete, actionable policies that create jobs, mitigate climate change and put our nation on the road to net-zero emissions by no later than 2050,” he said. “We can invest in our infrastructure to make it stronger and more resilient, while at the same time tackling the root causes of climate change.”

#covid-19, #energy, #energy-storage, #government, #greenhouse-gas-emissions, #greentech, #manufacturing, #oil-and-gas, #oil-and-gas-infrastructure, #renewable-energy, #tc, #transportation

CarbonChain is using AI to determine the emissions profile of the world’s biggest polluters

It was the Australian bush fire that finally did it.

For twelve years Adam Hearne had worked at companies which represented some of the world’s largest sources of greenhouse gas emissions. First at Rio Tinto, one of the largest industrial miners, and then at Amazon, where he handled inbound delivery operations across the EU, Hearne was involved in ensuring that things flowed smoothly for companies whose operations spew millions of tons of carbon dioxide into the environment.

Amazon’s business alone was responsible for emitting 51.17 million metric tons of carbon dioxide last year — the equivalent of 13 coal burning power plants, according to a report from the company.

Then, Hearne’s home country burned.

In 2019 wildfires erupted that engulfed over 46 million acres of land, destroyed over 9,000 buildings, and killed over 400 people and untold numbers of animals — driving some species to the brink of extinction.

Hearne, along with an old friend from his business school rugby days, Roheet Shah; and computer science and machine learning experts from Imperial College of London, Yuri Oparin and Jeremiah Smith; launched CarbonChain that year. The company, now poised to graduate from the latest Y Combinator cohort, is pitching a service that can accurately account for emissions from the commodities industry — which is responsible for 50 percent of the world’s greenhouse gas emissions.

The company’s services are coming at the right time. Countries around the globe are poised to adopt much more stringent regulations around carbon dioxide and greenhouse gas emissions. The European Union is slowly working towards passage of sweeping new regulations on climate change that are mirrored in the region’s local economies. Even petrostates like Russia are poised to enact new climate regulations (at least according to Russian officials).

What’s missing in all of this are ways for companies to accurately track their emissions and technologies that can adequately monitor how well emissions offsets are working.

CarbonChain tackles this problem by going to the sectors that are responsible for the largest percentage of greenhouse gas emissions, Hearne said.

“The world needs hard accounting and hard numbers of what commodities companies are producing,” said Hearne in a July interview.

To ensure that emissions reductions and regulations are working, regulators need to go after oil and gas and commodities and minerals producers, according to Hearne. “Those sectors are uniform and carbon intensive and that’s how you quantify them,” he said.

CarbonChain has built models for every single asset in the supply chain for these industries, according to Hearne. The company has created digital twins of every piece of equipment used in heavy industry. If CarbonChain can’t get the information about the equipment from the companies that use it, they go to the engineering firms that built the equipment or facility for the company.

“In order to get a number that doesn’t get laughed out of the room we have to go down to the aluminum smelter that has a power station right next to it,” said Hearne. “Ninety percent of its footprint is its electrical usage.”

According to Hearne, CarbonChain’s system is so precise that it can tell users how much carbon emissions are embedded in a cup of coffee or a glass of wine (which is two pounds of carbon dioxide for imported wine, by the way).

CarbonChain is already selling its services to commodities producers and carbon traders who are operating in existing carbon trading schemes.

So far, the company has received roughly $500,000 from the UK government and an investment from one of its (undisclosed) commodities customers.

But CarbonChain’s technology seems to have the most rigorous methodology of any of the companies that’s purporting to do emissions monitoring. Other startups purporting to provide carbon emissions data for companies include Persefoni, which raised $3.5 million for its solution, and another Y Combinator graduate SINAI Technologies.

If the company can actually measure the embedded emissions of materials down to a single piece of rebar, it could have huge consequences for industry broadly.

The company is also slots nicely into the trend of entrepreneurs with deep industry experience building vertical solutions based on the collection of massive data sets using machine learning.

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