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BFD Expert Voices - Climate Deals

BFD Expert Voices

We've recycled the wrapping paper and raised a glass of whey to the new year. Now let's see what some venture investors think about certain climate-tech sectors in 2024. Here's Part 1 of our prediction query, via Alan. 

Advanced nuclear energy: "The bloom will come off the radioactive rose as science-fiction won't translate to science-fact on fusion, and regulatory headwinds nuke SMR deployment." -Vaughn Blake, Blue Bear Capital

Methane: "We'll see a substantial uptick in investors looking for methane-focused start-ups." -Amy Duffuor, Azolla Ventures

Methanol: "It's a multi-purpose chemical that can store long-term energy inexpensively, serve as a chemical feedstock, be made from captured CO2, and directly replace fossil fuels in hard-to-decarbonize applications like shipping." -Joshua Posamentier, Congruent Ventures

Next-gen mining: "China will use its critical metals monopoly to choke off U.S. defense and electrification; it will prompt a scramble in bio-mining and other on-shoring." -Shomik Dutta, Overture VC

Grid tech, metals, and industrials: "Transmission and monitoring to bring more renewables onto the grid; circularity for critical metals and minerals; decarbonization of cement, steel and chemicals." -Dan Goldman, Clean Energy Ventures

1 big thing: 👀 Looking ahead

Binoculars merged with pair of 2024 new year's glasses.

Energy company APA agreed to buy rival Callon Petroleum for $4.5 billion.

Why it's the BFD: A wave of consolidation swept oil and gas last year, showing how the petro-giants are highly focused on fossil fuels even while also investing in lower carbon technologies.

Details: The Houston-based companies said the deal would add scale to operations across the Permian Basin, with a combined daily production exceeding 500,000 barrels of oil equivalent.

The transaction is expected to close in the second quarter.

Catch up quick: Major oil and gas deals last year included: 

Occidental buying Permian Basin producer CrownRock L.P. for $12 billion. 

Exxon's planned $60 billion purchase of shale giant Pioneer Natural Resources.

Chevron's $53 billion megadeal to buy Hess

Thought bubble: One reason for breakneck consolidation in the shale patch is that prime geology, even in the vast Permian, isn't limitless, Ben Geman wrote in Axios Generate about oil mergers last month.

Boosting oil and gas production flies in the face of steps climate scientists argue are necessary to meet the Paris Agreement's temperature targets, Axios Generate's Andrew Freedman wrote last year.

2. The BFD: Permian play  

Animated illustration of two pools of oil merging to form a dollar sign.

👍 Volkswagen's QuantumScape results: German auto giant Volkswagen says that the results of trials with QuantumScape's solid-state battery are positive and "significantly exceeded" industry targets in recent tests.

The QuantumScape prototype cells saw just 5% storage capacity loss after more than 1,000 charging cycles vs. standards of 700 charging cycles and a maximum loss of 20% capacity.

Solid-state batteries are the next great hope for EVs, and QuantumScape has been working on its battery tech since 2010.

🌬️ Latest offshore wind blown off course: BP and Equinor said they're scrapping a contract to sell energy from a planned offshore wind power project to the state of New York.

The Financial Times writes "higher costs and interest rates and supply disruptions [have] thwarted the business models of many offshore wind power projects in the US, setting back ambitious visions for the clean energy technology from the Joe Biden administration and several coastal states."

☀️ Green hydrogen credits favor regions: Canary Media points out that the new green hydrogen tax credit guidance means "certain regions of the country will win, and others will lose."

The Midwest and the Southwest U.S., particularly Texas, are likely to benefit the most from the coming wave of clean hydrogen production.

3. Temperature check

Illustration of thermometers with increasing temperatures falling over like dominos 

Go deeper in our full database in the Axios Pro Deals Tracker

• Zero Energy Homes, a Maine-based sustainable home builder, is raising $300k in debt, according to an SEC D-filing. https://axios.link/3H5izO7

• Altus Power, a solar company based in Stamford, Conn., secured a $100m credit facility from an affiliate of Goldman Sachs Asset Management and CPPIB Credit Investments III, a subsidiary of the Canada Pension Plan Investment Board. https://axios.link/41MO6On

• LivNSense, an AI startup based in Bangalore, India, has raised $2.75m led by Pavestone Technology Fund. https://axios.link/3NRpJt9

• HASI, climate tech investors based in Annapolis, Maryland, is investing in 605MW of solar and storage projects being developed by AES. https://axios.link/3TPDJaU

• Italian utility Enel finalized the sale of a renewable asset portfolio in the U.S. to Ormat Technologies for $271m. https://axios.link/3TOAwIu

• SolaX Power, a solar and storage company based in Hangzhou, China, started trading on the Shanghai stock exchange STAR market. https://axios.link/3S5rXaQ

• BrightNight, a clean energy developer based in West Palm Beach, Florida, raised $375m in a credit facility to deploy its solar and storage projects. https://axios.link/3vhVjKa

• First Solar, based in Tempe, Arizona, says Indian solar company Cleantech Solar will build 150MW of solar and 16.8 MW of wind in Tamil Nadu, India, to power First Solar's new manufacturing facility. https://axios.link/3ty1yJB

4. Hot deals

• Paul Walker was appointed to the board of directors of REC Solar. https://axios.link/3NKU10U

• Paul Richardson was appointed to the board of FireFly Automatix. Richardson was formerly a board member and CFO of WPP Group. https://axios.link/3TJ22Hr

• Shane Lynch was appointed to the board of Northern Ireland's Department of Agriculture, Environment and Rural Affairs. Lynch was formerly CEO of the Utility Regulator. https://axios.link/3tEJ4XF

5. It's personnel

We're almost to the first weekend of the year. Hang tight.

Sip of the week: An espresso shot from one of the growing list of cafes that use Bellwether's electric coffee roasters.

💆🏼‍♀️ Katie is ready for the first weekend of 2024!

Thank you to Michael Flaherty and Chris Speckhard for today's edits.

And thank you for reading Climate Deals! Please share with your friends, family and crystal ball readers.

January 04, 2024

1 big thing: 👀 Looking ahead