Breakthrough Energy, the Bill Gates-backed sustainability investor, doesn't plan to raise a second project finance fund, Axios Pro has learned.

• It had raised over $1 billion for its debut "Catalyst" fund in 2021.

Why it matters: The move is a regroup of Catalyst's efforts to finance first-of-a-kind energy and climate projects, which often struggle to move from the lab to commercialization.

What they're saying: Breakthrough Energy, in a statement to Axios, left the door open for future fundraising but confirmed it has halted Catalyst investments and shed related staff, including former leader Mario Fernandez.

• "It is too early to say what the future of our deployment work will look like," Breakthrough Energy says.

Behind the scenes: The structure of Catalyst, a hybrid of philanthropic and return-generating financing, was difficult to execute and scale, say two sources.

• The group also changed directions multiple times, leading to an at-times slow-moving organization, the sources say.

Zoom in: Much of the Catalyst team, including Fernandez, has left, according to two other sources.

• Breakthrough Energy tells Axios that as Catalyst matured, the company "learned important lessons about where Catalyst's model is most effective and where there may be better ways to support companies at this stage of development."
• "This evolution of the work requires a smaller team."

Catch up quick: Catalyst launched in the height of the climate tech era, with a new model for offering both project equity and grants to promising companies with emerging technology to build first-of-a-kind and demo projects.

• Key funders included HSBC, Builders Vision, American Airlines, ArcelorMittal, Bank of America, The BlackRock Foundation, Boston Consulting Group, General Motors, and Microsoft.
• Catalyst awarded hundreds of millions of dollars in grants and equity to at least 10 projects, according to an interview with Fernandez in October of last year, before he left the firm.

Zoom out: Climate and energy startups have long struggled to scale emerging technology.

• Investor peers of Catalyst say there's still a major need for more first-of-a-kind financing and point to newer efforts like the All Aboard Coalition.

The intrigue: Catalyst's financing was well-timed for at least one breakout energy upstart.

• Catalyst provided $100 million in project-level preferred equity to geothermal company Fervo Energy to help build out its first commercial plant called Cape Station in Utah.

What's next: Much of Catalyst's former team has moved on, many of them continuing to advance climate and energy technologies outside of the Catalyst experiment.

• Breakthrough Energy says it is "hard at work evaluating lessons and case studies," from Catalyst "and will have more to say in the future about what it looks like."

Subscribe to Axios Pro Deals for the full story and more scoops and exclusives.

Aerospace and defense giant Lockheed Martin is joining microreactor startup Radiant's $350 million-plus Series D financing round.

Why it matters: The addition, for an undisclosed amount, "adds generations of defense and advanced technology expertise to Radiant's growing coalition of investors and partners," the announcement states.

The big picture: It comes amid growing Pentagon and Energy Department interest in nuclear tech for both civilian and defense power uses.

• On Sunday, the military and DOE collaborated on flying an unfueled Valar Atomics microreactor from California to Utah for testing and evaluation. The Hill has more.

State of play: Radiant makes tiny nuclear reactors (1 MW) that can be assembled in a factory and shipped where needed.

• They're intended to replace diesel generators in remote regions, among other applications.

What's next: The company plans to begin testing its Kaleidos unit this summer at DOE's Idaho National Laboratory, and is targeting 2028 for initial customer deployments.

A new Senate bill that would ensure the cost of data centers' energy use isn't passed on to consumers is stirring up plenty of debate — pro and con — among AI and energy interests.

Why it matters: The bill from Sens. Josh Hawley (R-Mo.) and Richard Blumenthal (D-Conn.) is one of the first bipartisan pieces of legislation on an issue that's drawn plenty of Hill attention.

The big picture: The measure — which Axios reported on exclusively before its introduction — would guarantee that consumers won't face any rate hikes driven by data centers.

Driving the news: Ari Peskoe, who directs Harvard Law's Electricity Law Initiative, touched off a mini-debate on X after posting about the bill. He said it achieves sponsors' goals.

• "The bill's merit is its simplicity. It bans all new grid-connected industrial computing facilities," Peskoe said in an email.
• "That's easy to implement, would generally force data centers to pay for their full energy costs, and would prevent utilities from shifting any costs to the public, since utilities would not be allowed to connect new data centers."

The other side: One respondent to Peskoe's post — Craig Lawrence, a partner at Energy Transition Ventures in Austin, Texas — questioned whether the bill has a "constitutional rationale," given states' regulation of utilities.

Joseph Hoefer, chief AI officer and principal at Monument Advocacy in D.C., said in an email that the legislation "risks creating a whole set of consequences that ripple far beyond utility bills."

• "I worry that the immediate effect would be to stall a significant portion of projects that are already in development, because once you inject that level of power access uncertainty into the equation, financing tightens up very quickly," Hoefer said.

Full story

🧑‍🤝‍🧑 The Trumpworld-connected lobbying firm Checkmate Government Relations is representing the Coalition for Green Capital.

• The intrigue: The CGC is among the groups channeling billions of dollars from the Biden-era Greenhouse Gas Reduction Fund — yes, the huge grant program that Trump EPA boss Lee Zeldin froze last year.
• State of play: Lobbyists listed in a filing include Ches McDowell, who's close with Donald Trump Jr., and Chris LaCivita Jr., son of Trump campaign manager Chris LaCivita. Checkmate and the CGC didn't provide comment.

♨️ Fervo Energy, the prominent geothermal developer readying an IPO, retained Cornerstone Government Affairs, Inc.

🚘 The ​Zero Emission Transportation Association, a major EV group, brought on Kelley Drye & Warren LLP to work on "policy relating to the review and renegotiation of the US-Canada-Mexico Agreement (USMCA)," a filing shows.

💵 A few caveats about that $1.3 trillion in savings over several decades that EPA's projecting from killing the endangerment finding and vehicle regs — a stat the agency and the White House are heavily promoting.

• State of play: Some of EPA's modeling shows costs narrowly exceeding that level, though a lot rests on fuel cost assumptions and other big variables. Check out the agency analysis, and E&E News has a nice look.
• The intrigue: Agency critics also note that the analysis doesn't weigh health impacts, including from changes in direct forms of air pollution that go alongside backing off CO2 standards.
• The other side: EPA's rule defends this analytical decision by emphasizing that other rules exist for these air pollutants.

⚔️ President Trump and Israeli PM Benjamin Netanyahu agreed last week that the U.S. will increase the economic pressure on Iran, mostly when it comes to oil sales to China, according to two U.S. officials briefed on the issue.

• Why it matters: More than 80% of Iranian oil exports go to China. If China reduces its purchases of oil from Iran, the economic pressure on Iran would increase significantly.
• What we're watching: U.S.-Iran negotiations in Geneva today. Go deeper.

🛢️ ICYMI: The Treasury Department issued licenses Friday that clear the way for outside oil companies to make new and expanded investments in Venezuela. Reuters has more.

🕵️ Zeitview, an inspection-services provider for energy infrastructure sites, acquired methane leak-detection startup Insight M. Go deeper

⚛️ Inertia, the fusion startup co-founded by Twilio co-founder Jeff Lawson, raised $450 million in Series A funding led by Bessemer Venture Partners. Go deeper

🔋 Battery recycler Aqua Metals agreed to buy Lion Energy in an all-stock deal valuing the energy storage company at $72.4 million. Go deeper

⚡️ Mainspring Energy, a developer of linear generators for on-site power, signed a big commercial contract with a Utah utility agency. Go deeper

"A positive spillover of the AI boom has been making me a much better dinner party guest. All of a sudden there is a much larger audience of people willing to listen to the minutiae of grid policy and rate design without having their eyes instantly glaze over."