Gates Leads Clean Energy Investment Pact

As climate talks got underway in Paris this week, Microsoft founder and philanthropist Bill Gates announced the formation of a coalition of private billionaire investors to support the transfer of clean, zero-carbon energy technologies from the lab to the marketplace.

The Breakthrough Energy Coalition will back private, early-stage companies, although the innovations will come out of basic and applied research—much of it initially funded by governments. Indeed, the group will target investments in countries that seek to double public clean energy R&D funding over five years. Already, 20 countries including the U.S., China, India, and Brazil have signed on to that initiative, called Mission Innovation.

In addition to Gates, the coalition is made up of 27 high-net-worth individuals from around the globe who have pledged to invest in renewable energy breakthroughs. The list includes cleantech investor Vinod Khosla, Amazon founder Jeff Bezos, Facebook founder Mark Zuckerberg, and Jack Ma, the chairman of China’s Alibaba Group. More are expected to join.

In contrast to traditional venture capital investors who expect returns in three to five years, Gates says those in the coalition will provide backing and business support for longer periods of time. He says this sustained investment is essential for energy companies to prove that their technology works well, is scalable, and can be made affordable.

“Experience indicates that even the most promising ideas face daunting commercialization challenges and a nearly impassable Valley of Death between promising concept and viable product, which neither government funding nor conventional private investment can bridge,” the group says.

No dollar figure was attached to the announcement, though it is expected to add up to billions of dollars in future private investments. The Coalition says it will focus specifically on investing in early technologies—so called seed, angel, and Series A rounds that traditional venture investors have shied away from in recent years.

Three promising technologies cited by Gates in an essay on the topic are chemistry-based: solar chemical, flow batteries, and solar paint. Climate change is only one driver for the effort. Gates says affordable, renewable, scalable energy will be a boon for the 1 billion people around the world who lack basic energy services.