Greenify #80: Nuclear fusion, fission and Climate VC
September 29, 2023
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📌 Fact of the week
A recent analysis published by the IEA reveals that in order to reach net-zero emissions by 2050, the world needs to triple its renewable energy capacity by 2030 and accelerate the processes for permitting and connecting renewable energy sources to the grid.
Hottest news of the week…
Regulation 🗃 – Another useless climate conference?
What happened: As we prepare for COP 28, happening in November in Dubai, countries are outlining what they will bring to the table. China, the world’s biggest emitter, just announced to the world that it won’t accept a mention to “phase out” fossil fuels in the final paper, as this is unrealistic and would damage economic growth! Mr Xie, China’s climate envoy, said the country is available to set higher global renewable energy targets instead. 😅
Zoom out: Although two simple words seem like a small detail, they make a huge impact on subsequent policies that countries need to adopt. A “phase out” was first proposed at COP26 in Glasgow and it is crucial to speed up emissions reduction in the short term and have our last chances to stay within the 1.5 degree Celsius target. It seems like we will experience another relatively useless COP, with a lot of nice talking but little commitments! 🤬
Business 💰 – Microsoft betting on small nuclear reactors!
What happened: Microsoft listed a new job opening this week, nothing new right? Well… the position they are looking for is not the typical software engineer but a “Program Manager for nuclear technology”. The job opening seems a bit like a press statement, as they clearly outline what they are going for: an assessment for integrating Small Modular Reactors (SMRs) to power the datacenters that the Microsoft Cloud and AI reside on! Hence, there is no speculation here… Microsoft is really trying to build small nuclear reactors and use them directly! 🙌🏻
Zoom out: The reason why Microsoft is looking into nuclear is that powering datacenters demands incredible amount of electricity with no disruptions… something that renewables might not be able to provide at this time. Specifically, by looking at SMRs, Microsoft hopes to cut most of the complexities and huge costs associated with standard nuclear. Still, implementing this strategy will be a long and difficult process…hope they hire a good one for this role! 🤓
Innovation 💡 - Nuclear Fusion, where are we?
What happened: An article from the MIT Technology Review wraps up where we are on nuclear fusion and where will we be heading from here. As we outlined in previous editions, a milestone in fusions was reached last year when scientists at Lawrence Livermore National Laboratory were able to generate more energy from a fusion reaction than what was delivered into the fuel. However, the articles argues this was more of a symbolic milestone rather than a practical one, given the type of lasers used and the amount of energy pulled from the grid vs what was actually produced… for further developments, companies to track in the space: TAE Technologies, Commonwealth Fusion Systems, Helion Energy.📒
Zoom out: Fusion is the planet’s hope on clean power generation, yet many argue it will remain as such. Significant investment, both public and private, has been made in the space, yet a viable commercial and scalable model seems far away. Some argue it is just a matter of time and we will get there, just like we did with other technologies, others argue the amount of money invested in nuclear fusion would be better allocated to “proven” technologies, as the planet is in a hurry to decarbonize. 🕰️
Deep dives of the week…
Chart of the week - Nuclear = CO2 avoidance ⛔
We spoke about nuclear fusion in our innovation piece. However, another clean source of energy, nuclear fission, has been around for decades. The chart below shows how much total CO2 emissions were avoided over the past fifty years thanks to nuclear power. Europe (captained by France) and the US lead the way.📈
CO2 emissions avoided by nuclear by country or region, 1971-2022
Source: IEA
Deal of the week - Round-up on climate tech ♻️
Instead of focusing on a specific deal, this week we look at a Sifted article focusing on the type of deals which have dominated the European VC landscape year to date. With no surprise, the four largest deals have all been “climate” related: H2 Green Steel, Northvolt, Zenobe Energy and Verkor. These are companies engaged in hydrogen, battery manufacturing and charging infrastructures, areas which have seen significant interest, particularly in the US following the Inflation Reduction Act. In general, we note climate technology keeps being a resilient sector which keeps attracting fresh capital in spite of the recessionary environment the world is in.👍
👋 See you next Friday, for the best sum up of this coming week!
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