Prashant Rao from Semafor and Freya Pratty from the FT-backed Sifted join Richard Delevan and discuss the latest in climate tech, investment challenges, and the evolving energy landscape. We also share our interview with Laura Fleming, UK and Ireland country director at Hitachi Energy.
Key Topics Discussed:
1. The Valley of Death
- Prashant Rao discusses the significant funding gap in climate tech, referencing the International Energy Agency's (IEA) estimates. He highlights that while a $7 billion fund by KKR is substantial, it is a drop in the ocean compared to the $4 trillion needed annually.
- Freya Pratty shares insights from the Climate Impact Summit in London, emphasizing the "valley of death" for climate tech startups. She notes the difficulties in securing late-stage funding and the growing importance of debt in financing these ventures.
2. Innovative Funding Models
- Richard and Prashant explore innovative funding models that could mitigate the valley of death problem. They discuss the need for different types of CFOs who are familiar with high capex industries and can de-risk projects through creative financial strategies.
3. European Climate Tech Expansion to the Gulf
- Freya Pratty recounts her recent trip to Dubai and Abu Dhabi, observing a significant interest from European climate tech companies in the Gulf region. Despite the enthusiasm from European founders, she notes a potential mismatch with local priorities, which are more focused on Asia and Africa.
- The discussion also touches on the ethical and human rights concerns surrounding mega-projects like Saudi Arabia's NEOM.
4. Political Uncertainty and Its Impact on Climate Tech
- The panel delves into the political uncertainties in the US and Europe and their implications for climate tech investments. Richard raises concerns about the potential impact of a Trump presidency on the Inflation Reduction Act and investor confidence.
- Freya mentions that many founders seek stability and long-term policy certainty, which is currently lacking.
5. Tesla's Hardcore Pivot
- The conversation shifts to Tesla's recent pivot away from a $25,000 model to focus on AI-driven Robo-taxis. Richard and Prashant debate the implications of this move for Tesla's market position and the broader EV industry.
- Prashant highlights the intense competition from Chinese EV manufacturers like BYD, which poses a significant challenge to Tesla's dominance.
Laura Fleming from Hitachi Energy, at InnovationZero
- Laura Fleming, Managing Director of UK and Ireland for Hitachi Energy, joins the conversation to discuss the future of the energy grid. She explains the need for a more integrated and flexible system to accommodate the increasing reliance on renewable energy.
- Laura emphasises the importance of storage solutions and the role of Hitachi Energy in facilitating the transition to a more resilient and secure energy system.
Links
Sifted’s Climate Tech newsletter
Key Quotes
1. Prashant Rao: "The theoretical requirement of funding if you take the IES estimates is $4 trillion a year for clean tech and renewables. It's currently $1.7 trillion. So that's a gap of $2.3 trillion which means this $7 billion fund as enormous as it is by any regular standard is less than 1%."
2. Freya Pratty: "There was a huge enthusiasm from the European founders heading out there. I felt like perhaps local players were looking more at Asia and Africa than Europe."
3. Laura Fleming: "The system has also got to grow. Because with any electricity becoming the backbone of the energy system we're going to increasingly use electricity to power all of the things that we're doing day to day."
Thanks for listening!
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