Bill Gates and Wealthy Allies Have Launched a $1B Clean Energy Fund
The Breakthrough Energy Ventures fund could push sustainable, zero-carbon transportation, agriculture, manufacturing and infrastructure to the next level.
Just a year after announcing a new coalition to work toward moving innovative clean techs ideas from the lab to the real world, Bill Gates has introduced a new investment fund focused on doing just that. The Breakthrough Energy Ventures fund will make more than $1 billion available globally for technologies that could push sustainable, zero-carbon transportation, agriculture, manufacturing and infrastructure to the next level.
The fund sets itself apart from others in several ways. It's backed by some of the wealthiest people in the world, including Virgin Group's Richard Branson, Jack Ma of Alibaba Group, Amazon founder Jeff Bezos, SAP cofounder Hasso Plattner, venture capitalists John Doerr and Vinod Khosla and former energy hedge fund manager John Arnold, to name a few.
"It's amazing the group that has come together," Bill Gates, who will serve as the fund's chairman, said on a press call Monday.
Although the size of the fund is impressive, its duration is also a surprise. Whereas most investors want to see their startup companies turning a profit within a few years, those under Breakthrough Energy Ventures' wing will have 20 years to take the research and development time often necessary to push energy innovation to new levels.
"Fitting clean tech into a traditional VC model is a bit like the square peg in round hole model," John Arnold said on the press call. "We can make investments without needing a liquidity strategy in five years, which can constrain an investor to lower risk."
For zero-carbon advocates, this new initiative with its global perspective and double-decade time frame could mollify worries that president-elect Trump has little concern for climate change. In the last week, he's selected several members to his cabinet - most recently Scott Pruitt, US Rep Cathy McMorris Rodgers and Rex Tillerson, Chairman and CEO of ExxonMobil - who have all pushed for fossil fuel development.
This doesn't rattle Gates and his board at Breakthrough Energy.
"When you take the long view, you don't rely on the politics of any god-given year," said Vinod Khosla.
Gates said that, on a global scale, he has seen money going up for research and development in energy technology. He also thinks one could make a strong case for energy R&D in the United States because it equals jobs, exports, energy security and demonstrates strong American leadership.
But because this is a long-term project, having support from one administration isn't necessary.
"We're going to go full speed ahed no matter what the government policies are," he said.
Gates laid out his plan in a blog he posted yesterday. "In this landscape, we've outlined five grand challenges, corresponding to the biggest contributors to greenhouse gas emissions around the world," he wrote. They are:
The investors have established two mandates to help decide which technologies they'll invest in: it must have the potential to significantly reduce greenhouse gases and it must ultimately lead to a financial return.
"This high bar ensures that we will fund revolutionary technologies rather than evolutionary ones," said Arnold on the press call.
They plan to attract the top scientists and investment experts to vet the technologies.
"I would never underestimate the power of energy entrepreneurs to change the game," said John Doerr on the press call. "I can't guarantee it'll happen, but we're all in this to find a better, faster, cheaper way to make energy available to everyone, and to get toward the zero-carbon planet that we know we're gonna need by 2050."
"The next time you hear from us, it will be about the key people that we've brought on," Gates told those on the press call, "After that, it will be about the scientist we're getting behind."
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