Breakthrough Energy Catalyst and Major Corporations Announce Partnership to Accelerate the Clean Energy TransitionRead more
Many clean energy innovations available today – like wind, solar, and lithium-ion batteries – are starting to compete with the emissions-intensive technologies they were designed to replace. After decades of research, development, demonstration, and deployment, these technologies are now cheap enough for productive markets to help them get to scale.
We can’t wait decades for the next generation of clean technologies to become competitive with fossil-fuel incumbents. Meeting our climate goals and reaching net-zero emissions by 2050 means transforming our entire physical economy, and that will require accelerating the innovation pipeline at an unprecedented pace. We have to invest heavily now to bring down the costs of critical clean technologies. And we need to build the creative financing structures that will help them develop and deploy more quickly. That’s why we’ve launched Catalyst. We’re working with partners across the public and private sectors to provide a platform for rapidly commercializing emerging technologies. Through a creative, blended financing approach, Catalyst will make targeted investments into clean technology projects to significantly decrease the price of new clean products, increase their availability in the market, and demonstrate how to finance the infrastructure of decarbonization at scale.
Catalyst will start by focusing on four critical technologies for decarbonization:
- Direct air capture (DAC)
- Green hydrogen
- Long-duration energy storage (LDS)
- Sustainable aviation fuel (SAF)
These clean innovations have already proven their potential at a small scale, but right now, the timelines to go to commercial scale are still way too long. They are at the critical moment where an influx of capital can turn them into viable commercial products much more quickly.
Catalyst is jumpstarting this process by raising money from philanthropists, governments, and companies looking for ways to transition to cleaner business models. We will use a blended financing facility to make the large capital investments needed to bring down the cost of these emerging technologies and help businesses negotiate agreements with suppliers by buying down any remaining extra cost associated with the clean product. (We call this the Green Premium). We expect investments in these early commercial projects will help technologies mature to the point where private markets and public policy will bring them to scale.
Learning from Solar
To understand both the urgency and promise of investing at the catalytic stage, it’s useful to look at another clean technology that’s come a long way since its early days: solar power.
In 1975, it cost about $100 to produce a watt of electricity from a solar panel. Today, it can cost only $1 (or about 21 cents in 1975 dollars). This decrease is incredible – and it’s still happening – which is why solar power is rapidly being deployed around the world.
But its path here was anything but steady or pre-ordained. Although the government invested in solar research and development at first, funding plateaued in the ‘80s and ‘90s. Only in the past two decades has investment in solar increased substantially, driving solar to the lower cost and faster pace of deployment that we see today (and still, we should be deploying it even faster).
So, at Breakthrough Energy we asked the question: what if we had accelerated investment in solar earlier? What would have been the impact, for example, of $5 billion more of funding between 1985 and 1990 (that’s about $12 billion in today’s dollars) when it was at the catalytic phase? The impact would have been substantial. Solar would have reached scale eight years sooner and allowed us to reduce emissions by an additional 70% through 2030.
Additional investment from Catalyst will accelerate technology cost declines and market adoption. If we had invested $5B in 1985, solar costs would have come down sooner. As a result of these cost declines, solar would have been adopted more quickly into the market.
Eight years sooner might not seem like a lot, but consider that we are now operating on a timeline of just 30 years to reach net-zero emissions and avoid a climate disaster. Any action today that accelerates innovation – whether it’s the invention of a new solution or the maturation of an existing technology – means fewer emissions and less climate harm. We have to make the right investments today for the next set of critical climate technologies, and every year counts. We can learn from the solar journey to design solutions for scaling low-carbon solutions in the future.
A New Partnership with the European Commission
As we build Catalyst, we’re proud to partner with the European Commission to mobilize up to $1 billion over the next five years to build large-scale, commercial demonstration projects for clean technologies – lowering their costs, accelerating their deployment, and delivering significant reductions in emissions in line with the Paris Agreement. This partnership is a critical next step as we mobilize the world to build the clean industries of the future.
Decarbonizing the global economy is the greatest opportunity for innovation the world has ever seen. Through this partnership, Europe will lay solid ground for a net-zero future in which clean technologies are reliable, available, and affordable for all.
Read the press release from the European Commission and check out the joint announcement from President Ursula von der Leyen and Breakthrough Energy Founder, Bill Gates.
The Emerging Climate Technology Framework
We need to ensure that the next generation of critical climate technologies gets to scale as quickly as possible. In order to rapidly commercialize these new technologies, we need to create the right structure to incentivize investment from companies, individuals, and governments. There are many promising clean technologies that could do just that, like sustainable aviation fuel or green hydrogen, but they are still in the early stages of development and deployment and are perceived by the market to be more risky. As a result, these technologies are not receiving the investment needed to derisk and commercialize them in order to drive down costs and make them competitive with existing fossil fuel-based technologies.
The Emerging Climate Technology (ECT) Framework quantifies the climate value of investments that help scale technologies critical to a net-zero future. Individuals, companies, and governments will be able to use the framework and tool to assess their climate impact and receive recognition for investing in activities that will eliminate the sources of emissions permanently and over the long term. Establishing clear, high-quality metrics for these types of investments is a critical step toward funding technologies in an effective and efficient way.
Over the last several years, many companies and governments have committed to reaching net-zero emissions by 2050. Aligning the private sector around this shared goal will be necessary if we are to avoid the worst impacts of climate change. But while ambitious goals and targets are critical, what are even more important are credible and detailed plans to achieve them. Companies, for instance, need to fully transition their business models away from fossil fuels, but right now only a subset of the low-carbon solutions they’ll need to get to net-zero are widely available. There are no cost-effective ways to reduce emissions from business travel, decarbonize manufacturing, or reach 100% clean electricity.
A Framework for Progress
We are proud to work with CDP to build this powerful tool which will enable anyone to contribute toward critical climate technologies. Check out a preview below of how the Emerging Climate Technology Framework (formerly referred to as the Catalyzed Emissions Reduction Framework) makes a new stage of climate leadership possible.
Learn more about the Emerging Climate Technology Framework.
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