Breakthrough Energy, a fund led by Microsoft founder Bill Gates, seeks to draw $1 billion in investment for next-generation technology for climate change projects in Europe.
Breakthrough Energy announced a request for proposals earlier this month to support emerging projects located in the European Union, Iceland and Norway. The object is to “mobilise investments to accelerate the development of critical climate technologies needed to achieve net-zero,” according to the statement.
The so-called Catalyst programme will finance projects and initiatives that will reduce emissions in four areas that are notoriously hard to decarbonize: clean hydrogen, direct air capture, sustainable aviation fuel, and long duration energy storage.
Global leaders and investors met late last year at COP26 in Scotland to determine pathways to reduce carbon emissions and mitigate global warming. The transitions include switching to greater electricity usage in transport, such as electric cars, and in other sectors to increase the range of industries across which renewable energy like wind and solar can make an impact.
However, the devil is in the details when it comes to transitions. Different sectors require different approaches. Wind and solar power present their own challenges as intermittent sources. And some industries have specific requirements to which wind and solar cannot yet cater. These include, for instance, long haul transport such as aviation or the maritime shipping sector, where battery power is insufficient.
Investment into storage mechanisms and carriers for power from renewable or solar sources (such as batteries) or into the manufacture of clean-burning hydrogen, can produce a more reliable product that is more useful for the energy consumer. When that technology becomes less expensive, it can help deliver real gains in emissions cuts.
Catalyst will provide selected projects with one or more of the following forms of support: equity investment or – in the case of lower-risk projects – minority investment at a lower rate of return than traditional equity investors. It can also provide grant funding and offtake agreements to ensure purchase for project output.
Selected projects may also be considered by the European Commission and European Investment Bank to receive blended financing under the InvestEU Programme. Together, the EU-Catalyst partnership seeks to mobilise up to €820 million ($1 billion) between 2022-2027 to help technologies achieve rapid commercialisation.
Future low-carbon energy technologies need this sort of research and development funding, as investors in general seek clearer pathways to profits. And while there has been lots of progress already, the results aren’t yet so clear.
