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BFD Expert Voices - Climate Deals

BFD Expert Voices

Fusion energy developer Type One Energy is building its first prototype at one of the Tennessee Valley Authority's shuttered coal plants outside of Knoxville.

Why it matters: The planned $223 million investment is a first for the TVA, the largest public power company in the U.S., and a major step forward for fusion's role in climate tech. 

Details: Type One and Tennessee officials this afternoon are expected to announce plans, starting next year, to build a so-called stellarator at the TVA's Bull Run Fossil Plant, a person familiar with the plans tells Axios.

Type One expects to invest the $223 million in the prototype and in a new headquarters in Eastern Tennessee.

The company was also selected to receive funding through Tennessee's new $50 million nuclear energy development fund, a TVA spokesperson tells Axios.

Of note: The developments flow from a memorandum of understanding that Type One signed last year with the TVA and the U.S. Department of Energy's Oak Ridge National Laboratory.

Catch up fast: Fusion is the moonshot nuclear energy technology, promising near-limitless, waste-free, and zero-carbon electricity.

As such, stellarators are complex and difficult to build.

The swooping curvy design remains alluring because it can produce stable reactions at lower cost.

What's happening: Type One is leasing the TVA site for its prototype that will test how well the company's design contains and suppresses turbulence in an ultra-hot reaction.

The idea is to de-risk technology that will eventually be used in a working fusion power plant.

What's next: Type One is moving ahead on its first fusion power plant, which it aims to switch on in about 10 years.

1 big thing: Tennessee fusion test

A computer rendering of a twisty stellarator fusion machine.

A rendering of a slinky-like stellarator fusion device. Image: Courtesy of Type One Energy

Overture Climate VC, an early-stage firm founded by three former White House officials, said it has raised $60 million for its debut fund.

How it works: Startup founders backed by Overture Climate VC get support from Boundary Stone Partners, a D.C. government affairs shop run by Overture co-founder Brandon Hurlbut.

Those services can range from policy intelligence to lobbying. Boundary Stone is itself also an investor in Overture.

"Government is going to play the role of banker, referee, and buyer," Overture co-founder Shomik Dutta tells Axios. "When you have an early stage startup, you don't have the bankroll or the time to think about this. That's what we can take off their table."

Zoom in: Overture plans to sign initial checks of $1 million to $1.5 million, Dutta says.

LPs include Schneider Electric's SE Ventures, fund-of-funds WovenEarth, Arcadia founder Kiran Bhatraju, and "Pod Save America" hosts Jon Favreau, Jon Lovett, and Tommy Vietor.

Zoom in: The firm has already invested in 21 hardware and software startups through the fund.

Those companies include thermal battery developer Antora, geothermal heating and cooling startup Bedrock Energy, tax financing market Crux, flood monitoring service Floodbase, and electric trucking startup Forum Mobility.

The firm ultimately plans to back about 35 startups with Fund I as either a follow-on or co-lead investor.

"We want other climate VCs to see us as a huge value-add on the cap table that doesn't have elbows out," Dutta says.

Of note: Dutta, Hurlbut, and co-founder Michael O'Neil each worked in the Obama administration. A fourth co-founder, Tamim Mourad, previously worked in tech.

2. The BFD: Obama alums' climate fund

Illustration of the earth on a large pile of money

🏛️ The lame-duck outlook: Lobbyists hope for permitting to move ahead during the lame-duck session, a roughly two-month stretch of the congressional calendar after a new president is elected but before they take office.

If Sens. Joe Manchin and John Barrasso can come up with a consensus proposal in the next few months, it could look something like the 2020 energy bill that kicked around for two years before hitching a ride on a post-election omnibus.

Progressive lawmakers remain a likely source of opposition.

🚌 Seattle's wireless bus buy: Seattle public transit group Sound Transit is working with InductEV to deploy 48 electric buses, including 33 double-decker ones, that will use wireless charging.

The groups say the deal will bring wirelessly-charged double-decker buses to North America for the first time.

🚧 Carbon removal pain points: Nan Ransohoff of carbon removal group Frontier published highlights of their "red team" exercise to ID and overcome problems, writes Ben Geman in Generate.

The big issue: Demand is rising but remains far below what's needed to achieve the multiple gigaton-scale per year envisioned to make removal a viable solution.

Other risks include local backlash to projects and a market that "ends up fraudy/scammy and undifferentiated from low-quality offsets today," Ransohoff adds.

🫣 Biden's EV dreams a nightmare for Tesla: Tesla's big but brief $2.5 billion buying spree of Chinese lithium-ion batteries puts it in a tricky position around being able to comply with the IRA and receive tax credits, reports Bloomberg.

Other automakers like Ford are facing similar challenges to source their supply chains domestically.

3. Temperature check

Illustration of an earth in space covered in red and blue meteorological color lines.

• Altilium, a U.K.-based battery material recycling startup, has raised $9.43m from SQM Lithium Ventures, the VC arm of the Chilean lithium giant, in follow-on funding for its Series A round. https://axios.link/3I5mb38

• Vidyut, an EV financing and vehicle management company based in India, raised a $10m Series A round led by 3one4 Capital. https://axios.link/3uQEEgS

• WeedOUT, an Israel-based agtech company, raised $8.1m in a Series A funding led by Fulcrum Global Capital. https://axios.link/3SMr85Z

• EST-Floattech, a Netherlands-based maritime battery system developer, raised €4m in funding from the Energy Transition Fund Rotterdam. https://axios.link/49jh9fJ

• Arnergy, a Nigerian startup that sells solar systems, raised $3m in funding led by Shell-backed All On. https://axios.link/3uyd3Bg

• Strata Clean Energy, a clean energy and storage project developer based in Durham, N.C., has raised $559m to fund its 1GWh battery storage project in Phoenix. https://axios.link/3UPSWt2

• EV.energy, a London-based EV charging software startup, says it's raised a $41m grant from the California Energy Commission to deploy smart charging programs focused on low income communities in the state and creating a virtual power plant. https://axios.link/3SKyx60

• GameChange Solar, a solar tracker maker based in Norwalk, Conn., plans to grow its U.S.-based manufacturing from 24 GW to 35 GW, which the company says will enable it to offer trackers using 85% domestically produced equipment. https://axios.link/3SLeofR

4. Hot deals

• Hanif Marshal was promoted to CEO of LM Wind Power. Marshal previously served as VP of engineering and technology. https://axios.link/3uwRH7j

• Melanie Lane, previously with Shell Recharge Solution, was named CEO of EV charging firm Pod Point. https://axios.link/49mKsxJ

5. It's personnel

Research center Australian Institute of Marine Science has purchased two small autonomous underwater drones from startup Advanced Navigation to monitor and conserve Australian marine ecosystems, writes Katie.

Why it matters: There's a growing need to capture data about the oceans as the climate changes using low cost equipment and leveraging the latest computing tech. 

Details: The drones, called Hydrus, are only about 1.5 feet long — small enough to be a plane carry-on — and can be launched by one person from a boat. 

6. Photo of the day: A mini subsea ocean drone

An underwater autonomous drone made by startup Australian Advanced Navigation.

An underwater autonomous drone made by startup Advanced Navigation. Photo courtesy of Advanced Navigation

🌥️ Katie is very excited for a brief pause in the Bay Area rain today.

👋 Alan is sad to be waving goodbye to the street-legal golf cart he's been test-driving for "Wheels." Stay tuned for the review. (Sneak peek: the bass in the cart was bumpin'.)

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 fusion followers.

February 21, 2024

1 big thing: Tennessee fusion test