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Clean Energy Venture Capital Trends

The document discusses seven new types of investors that are fueling the renaissance in venture capital funding for clean energy technologies. It lists these seven types as asset-light investors, strategic investors, creative partnerships, foreign investors, place-based investors, patient investors, and philanthropic investors. It also provides examples and brief descriptions of each type.

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Ronaky123456
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71 views11 pages

Clean Energy Venture Capital Trends

The document discusses seven new types of investors that are fueling the renaissance in venture capital funding for clean energy technologies. It lists these seven types as asset-light investors, strategic investors, creative partnerships, foreign investors, place-based investors, patient investors, and philanthropic investors. It also provides examples and brief descriptions of each type.

Uploaded by

Ronaky123456
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Financing Clean

Technology Ventures
S ESSI ON -9
V I DHE E AVA SH IA
3 RD S E PTEMBE R , 2 0 1 9

MANAGING ENERGY BUSINESSES 1


Fuelling Clean Energy's VC Renaissance
Traditional venture capital never was a good fit for energy technologies

Venture capital is surging back into the energy sector it


abandoned seven years ago

Overall investment in clean energy dropped 8 percent in 2018, venture


capital and private equity investment surged by 127 percent

7 new types of VCs


 Asset-Light Investors - companies that don't have to spend a lot of
money to build big manufacturing facilities – e.g. software
companies – Digital Energy?

 Strategic Investors - strategic funds- utilities or energy companies or


others who have a strategic motivation to deploy capital in addition
to their financial one
Source: [Link]
renaissance/#3800830c5f55

MANAGING ENERGY BUSINESSES 2


Fuelling Clean Energy's VC Renaissance
7 new types of VCs
 Creative Partnerships – early investors partner with later-stage funds

 Foreign Investors - cross-border investors from places in the world


where electricity and other resources are a lot more expensive

 Place-Based Investors- e.g. Clean Energy Trust that is investing in the


Midwest USA only

 Patient Investors - structured as a holding company which can buy


companies and hold them forever if they want to

 Philanthropic Investors - family foundations that have a social or


environmental mandate
Source: [Link]
renaissance/#3800830c5f55

MANAGING ENERGY BUSINESSES 3


Biogas
Biogas refers to a gas produced by breakdown of organic matter in
the absence of oxygen

Selling & Trading


Biogas plant

Electricity
Substrate

Heat

Biomanure Bio-CNG
Gas grid
Utilization of Biogas
BIOGAS

Drying, Gas conditioning with or


Desulfurization without CO2 separation

Reformation
Compression (possibly)

Boiler CHP
Bottling or gas Filling Fuel
grid station cell

Heat Electricity &


Heat Substitute for Fuel Electricity
LPG or nature and heat
gas
Future tech??

MANAGING ENERGY BUSINESSES 6


Instruments to Promote
Renewables

MANAGING ENERGY BUSINESSES 7


What drives Renewable energy?
Government renewable capacity targets (e.g. Indian INDCs)
Fossil fuel supply constraints
• Higher imports
• Capacity additions

Time to market
• Environmental clearances
• Lack of dependency

Water issues
• Thermal plants closed during peak summer due water scarcity
• Hydro plants closed during monsoons due excessive silt

MANAGING ENERGY BUSINESSES 8


What drives Renewable energy?
Air pollution
Carbon budget constraints
Quantum of fossil energy prices going down, bad for
renewables?
Time of day pricing and renewables
Grid stability issues (intermittency, assured intake - always?, how
much is too much?)
Preferential tariffs for renewables (until when? What capacity
share?)

MANAGING ENERGY BUSINESSES 9


Incentives to Indian renewables
 Capex incentives
• Capital subsidies
• Accelerated Depreciation in wind projects reduced now (20% for the
first year, 15% subsequently)
• 80IA Income Tax Holiday for 10 years
• MNRE Capital Subsidy offered for small hydro
 Operational incentives
• Generation Based Incentive of 50p per unit for wind IPPs
• Preferential Feed-in tariffs (FiT) for power produced from renewable
sources
 Clean energy incentives
• Renewable Purchase Obligations: SERCs to source specified percentage
of electricity purchased from renewable sources
• Renewable Energy Certificates (REC)
• Carbon credits

MANAGING ENERGY BUSINESSES 10


Wind Repowering
Indian wind turbine generators installed as of 31.3.2014
• Below 500 kW individual capacity: 2.46 GW
• 500 – 1 MW: 7.18 GW
• 1-1.5 MW: 7 GW
• 1.5-2 MW: 2.55 GW
• Over 2 MW: 1.75 GW

Some of the best wind sites were taken in initial years and thus
are having small turbines (installed prior to 2002?)

Repower? (yield to increase by over 2.5 times to make economic


sense for replacement)

MANAGING ENERGY BUSINESSES 11

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