Top predictions for 2021 — The climate-tech startups VCs say are set to pop — Khosla shares his strategy

 
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Ticktock, 2020. Your time is running out. 

It was a year to remember that most of us are trying to forget. So this week, we're looking to the future. To the future! 

We spoke to two dozen energy experts, CEOs, and investors — from Daniel Yergin of IHS Markit to Vinod Khosla of Khosla Ventures — about what to expect in the year ahead. 

Let's start there.


Proterra 35′ Catalyst Bus 3 1

24 energy experts dish on what to expect in 2021

No one is really jonesing to predict the future after a year of mayhem, but our sources had a lot to say. Two themes stood out. 

Relief for oil: As more people get coronavirus vaccines, demand for fuels like gasoline will tick back up. That should raise the price of oil — and provide relief to the companies that sell it. What else? 

  • Producers will be much leaner next year, now that they've cut spending, and that may inspire investors to load up on energy stocks. 
  • Still, there will be pain ahead for oil firms until demand for fuel returns. Experts we spoke to offered up different dates for when that might happen, including never. 
  • There's another reality: Should demand return, it will inevitably fall back down, following the rise of electric cars. The oil industry doesn't have a lot of growth potential in the long term. 

Clean-energy surge: Climate change and renewable energy garnered a ton of attention this year. Next year they'll have an even bigger spotlight — especially with a climate-friendly Biden administration ready step in. 


Imprint Energy

These 46 climate-tech startups are set to soar, according to VCs

Venture capital is pouring into climate tech, a trending industry that encompasses tools to curb carbon emissions. (The term is often used interchangeably with cleantech.)

Big number: $15.7 billion, the total VC funding in cleantech this year, according to PitchBook. 

  • That's more than double the yearly average over the last decade.

Flashback: This isn't the first time climate tech has boomed. In the first decade of the century, VCs backed the industry with billions. Then it went bust (for a number of reasons that we outline here).

  • This time, however, will be different, experts say.  

Startups to watch: We asked 15 venture funds which climate-tech startups are set to take off in the year ahead. 

  • They shared companies both inside and outside their portfolios. 
  • You can find the full list — including how much each has raised — here

6 standouts: During our interviews, six companies came up again and again including carbon marketplace Pachama and digital utility Arcadia. See the other four here


Vinod Khosla

Vinod Khosla tells us his strategy for investing in climate tech — which appears to be paying off 

Remember that bust we were just talking about? Well, VC titan Vinod Khosla doesn't see it that way. He was a big climate-tech investor back then, and he says some of his bets have paid off

  • Several startups that Khosla Ventures has backed around a decade ago are now unicorns, he said, such as battery startup QuantumScape. 
  • QuantumScape, which recently went public, delivered more than $1 billion to his firm, according to Khosla. 
  • Investors who got burned in the clean-tech bust of the 2000s didn't stick with their winners or made bad bets, Khosla said. 

Khosla's approach: Bet on tech that can dramatically lower carbon emissions and not just drive incremental change. And then be patient. 


N.C. Department of Environmental Quality Secretary Michael Regan.

Biden just named 5 key energy picks. Here's what you need to know. 

President-elect Joe Biden appears to be readying a team that can unravel Trump's unraveling of climate policy and then start stitching anew. This week we learned about five key picks. 

Energy secretary: Jennifer Granholm

  • Who she is: The former governor of Michigan, who previously served as the state's attorney general.
  • Why it matters: Granholm has a close relationship with the auto industry, and the transportation sector is the largest contributor of greenhouse gas emissions. Granholm has been an outspoken proponent of clean technologies. 

Interior secretary: Deb Haaland

  • Who she is: A congressional representative from New Mexico and one of the first two Native American's elected to congress, BI's Robin Bravender reports
  • Why it matters: If confirmed by the Senate, she'll be the first Native American to lead the Interior Department — and the first to lead any cabinet-level agency — which oversees about 500 million acres of public lands. She has also shown a history of support for pro-climate policies and was a cosponsor of the Green New Deal. 

EPA chief: Michael Regan 

  • Who he is: The top environmental regulator in North Carolina, and a former associate vice president at the Environmental Defense Fund
  • Why it matters: If confirmed, he'll be the first Black man to run an agency in charge of lowering pollution, which disproportionately harms communities of color. "The next EPA leader is set to be at the center of Biden's effort to roll back Trump's climate change and environmental policies while putting stricter regulations in place," Bravender reports

White House Climate Advisor: Gina McCarthy

  • Who she is: President and CEO of the Natural Resources Defense Council, and former head of the EPA in the Obama administration. 
  • Why it matters: McCarthy, who's credited with crafting the country's first climate-change policies under Obama, will have the authority to "reach across the government to embed climate policies in virtually every federal agency," The New York Times reports. "She will be expected to press cabinet secretaries to enact rules not requiring Congressional approval." 

Council on Environmental Equality chief: Brenda Mallory

  • Who she is: A former EPA attorney who was CEQ's general counsel during the Obama administration, Bravender reports. She's now director of regulatory policy at the Southern Environmental Law Center. 
  • Why it matters: Mallory, who would be the first Black person to head the office, is yet another advocate of climate legislation that Biden has selected for a powerful role. She's likely to elevate environmental justice across the administration, Bravender reports.  

5 other big stories from this week

  • Exxon: The oil giant announced new targets to reduce its greenhouse gas emissions, following criticism from activist investors, Bloomberg News reports. 
  • BP: The London-based firm bought a majority stake in Finite Carbon, the largest producer of carbon offsets in the US.
  • Oil market: The International Energy Agency once again revised down its forecast for oil demand next year, BI's Amanda Cooper reports. "Demand for aviation fuels is expected to remain weak next year, even with the rollout of a vaccine," Cooper writes. 
  • Batteries: The cost of some lithium-ion battery packs fell below $100 per kilowatt hour this year — the price at which EVs became comparable in price to traditional cars, according to BloombergNEF. 
  • Solar: The solar industry is set to install a record amount of solar power this year, despite a pandemic slowdown, according to a new report by  the Solar Energy Industries Association (SEIA) and energy research firm Wood Mackenzie.

That's it! Have a great holiday. See you on January 1! 

- Benji 

Ps. Here's my derpy dog this week when his lip got caught on his teeth. 

Jumanji benji jones

 
 
 
 
 
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