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Welcome back! Today's Smart Brevity count: 1,299 words/ < 5 minute read.

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And happy birthday to the late George Michael, who died way too young and who we'll honor with today's intro tune...

1 big thing: Bill Gates' next climate moves

Illustration: Aïda Amer/Axios

A Bill Gates-led venture fund that invests in next-wave climate technologies wants to get bigger.

The big picture: Gates, chair of Breakthrough Energy Ventures, said Monday that the $1 billion fund that began investing in 2017 plans to raise another $1 billion to $1.5 billion late next year.

Why it matters: The billionaire Microsoft co-founder has long argued that deeply decarbonizing economies will require major innovations beyond existing clean technologies.

  • The fund's investments include startups working on fusion, solid-state batteries, carbon-free steel production, sustainable proteins and much more.

What's next: “We have plenty of money to invest through 2020 and the way we do it is, we leave a lot of money aside for follow-on investments in the current companies,” Gates told me and Axios' Amy Harder in an interview Monday.

  • “By the end of 2020 we will want to have more funds to make new investments. So we will start in late 2020 to raise fund two,” he said of BEV after also discussing the fund onstage at The Economic Club of Washington, D.C.
  • The fund includes corporate heavyweights and Silicon Valley VC players on its board, such as Richard Branson and John Doerr.

The intrigue: BEV is exploring hydrogen, which has not lived up to the expectations that advocates had earlier this century. "Hydrogen is very expensive," Gates said.

  • "There’s a ton you can do with cheap hydrogen," Gates said, citing both transportation and clean manufacturing applications.
  • “BEV is looking at companies who have some ideas,” he said, noting at one point, “Is there a way to make hydrogen super cheap? It’s very unknown.”
  • While BEV is eyeing new capital, a spokesperson said they would invest in hydrogen with existing funds "if they find the right opportunity."

The big picture: He's a deep-pocketed and sometimes controversial player in the climate world.

  • BEV is just one avenue, along with big personal investments in companies like Impossible Foods and Carbon Engineering, and his foundation that works to help poor countries address climate.
  • Gates is also a vocal advocate of major increases in federal R&D spending.
  • He's drawn criticism from advocates who say his emphasis on next-generation tech can sap focus from rapidly scaling existing solutions.

Yes, but: Gates said his policy goals, including a carbon tax, encompass innovation and deployment.

  • “We have 30 years left to get to what really needs to be, by the developed countries, net-zero [emissions],” he said.
  • “If the U.S. can’t do a carbon tax right away, at least it could do some things that are in the tens of billions that help with R&D, innovation and scaled deployment.”
Bonus: Gates is fine with Big Tech oil services

Gates tells Axios he has no problem with large tech players — including Microsoft — offering business lines tailored specifically to oil industry clients.

Why it matters: Those products — such as Amazon's cloud computing services for oil companies and Microsoft's partnership with ExxonMobil — are coming under increasing criticism.

  • Sen. Bernie Sanders went on the attack against those two and Google last month, accusing them of "fueling the climate crisis."
  • An open letter from thousands of Amazon employees to CEO Jeff Bezos in April urging tougher steps on climate took aim at their work with the oil industry.

But, but, but: Gates told Axios that he doesn't see a problem with it, arguing that tech players should not be instruments of energy policy, and also said U.S. oil production helps energy security.

  • “I don’t think the tech companies should stop working with oil companies. If there’s a carbon tax, which I think would be a great thing, then fine, then the industry would have to adjust to that,” Gates said, who is on Microsoft's board.

Go deeper:

2. How Democrats came to oppose natural gas

Plenty of Democrats have supported natural gas as a way to kick coal out of the U.S. energy mix over the past several years, but that’s rapidly changing, Axios' Amy Harder reports.

Why it matters: Natural gas, while far cleaner than coal and oil, is still a fossil fuel that emits heat-trapping emissions that cause global warming.

  • It’s become plentiful in America over the past decade and U.S. and global demand are slated to rise in coming years and decades. To what degree politicians embrace it or not is critical.

The big picture: As I’ve written in two recent Harder Line columns, Democrats, including 2020 White House hopefuls, are embracing tougher climate policies while rejecting natural gas, along with oil and coal. But this hasn’t always been the case.

Flashback: Positions by two prominent Democrats — Michael Bloomberg and Sen. Sheldon Whitehouse — illustrate the overall party’s shift away from natural gas.

  • Speaking at a Columbia University event in 2013, then-Mayor Bloomberg (who at the time was registered as an independent) was full of praise for gas, and the following year, he also criticized New York’s ban on fracking.

But, but, but: Earlier this month Bloomberg launched a $500 million campaign to halt construction of new natural gas plants alongside shutting down coal plants, which had previously been a years-long effort for him.

Read more

3. The South's solar rally
Illustration: Aïda Amer/Axios

Axios' Dion Rabouin reports ... Solar panels? For investors in solar power stocks and ETFs so far this year, it's been more like solar profits.

What's happening: Invesco's solar ETF, up 51% year-to-date, has returned about 4 times the S&P 500's gain for 2019 and has even delivered almost double the average return of other clean energy ETFs, after a tough 2018.

  • Individual solar companies are charging even higher, as companies like Sunrun (77%), SolarEdge (71%) and SunPower (107%) generate particularly outsize returns.

By the numbers: A new report from WoodMac and the Solar Energy Industries Association (SEIA) finds that Q1 saw U.S. solar installations (combined utility-scale, residential, commercial and more) rise 10% versus the same period in 2018.

  • The 2.7 gigawatts of solar PV (panels that convert sunlight into electricity) installed made it the best Q1 ever, though other quarters have seen higher growth, and it was a 37% drop from Q4.
  • Analysts expect installed U.S. PV capacity to more than double over the next 5 years.
  • The survey forecasts 25% growth in 2019 compared with 2018.

The intrigue: Solar stock prices have outpaced other renewable energy options thanks to major pickups in residential installation of solar panels, particularly in the South.

  • The uptick has come from states like Florida and Texas, so-called emerging markets in the industry, that are now beginning to see a changing regulatory environment pay dividends.

Yes, but: Non-residential installations fell to the lowest quarterly level since Q1 2017, dropping for a second year in a row. The report suggests policy shifts in states like California, Massachusetts and Minnesota may be stifling commercial growth.

Go deeper

4. Chart of the day: China's gas surge
Expand chart
Adapted from The Oxford Institute for Energy Studies; Chart: Axios Visuals

A short paper from an Oxford Institute for Energy Studies researcher looks at China's soaring demand for natural gas and ways it could meet growing import reliance.

Why it matters: China has become the world's largest gas importer as demand has greatly outpaced domestic production, as the chart above shows.

  • Import reliance reached 43% last year, compared to just 5% a decade earlier (!), and LNG meets well over half of those import needs, notes OIES senior research fellow Stephen O'Sullivan.

The big picture: "While China has few short-term options to mitigate the strategic vulnerabilities associated with rising seaborne supplies, it may increasingly turn to Russia as a source of imported gas," he writes.

5. Report: G20 communique tiptoes around climate

The Financial Times ($) reports ... "Japan has bowed to US pressure by watering down commitments to tackling climate change in its draft G20 communiqué, a sign of how Tokyo is seeking to curry favour with Washington amid tense trade talks and concerns over North Korea."

Where it stands: Per FT, the joint summit statement is slated to omit the words “global warming” and “decarbonisation,” and emphasize the Paris climate agreement less than prior communiques.

Why it matters: While these summit communiques are rather symbolic, it's a sign of how the Trump administration's sharp break with former President Obama is complicating climate diplomacy at a time when advocates want much stronger ambition.

But, but, but: The story notes that the document could change a lot before it's finalized. The G20 meets on June 28–29 in Japan.