Posts from climate crisis

100% Solar Match

Rocky Mountain Power emailed me last week and offered us a “100% Solar Match” which means that we can “match” all of our energy consumption in our home in Utah with power from their 20 megawatt solar plant in Holden Utah.

This doesn’t mean our home will be now be operating with energy from that plant but it does mean that we have opted for 100% solar. If every Rocky Mountain Power customer opted for this match, they would have to build more solar plants and decommission carbon based energy facilities.

There is the question of how Rocky Mountain Power could operate an all solar grid (they can’t as far as I know) and whether most customers care enough to specify what kind of power they want to purchase.

But I found the experience simple and easy. One phone call and I was cut over. And now I feel better about the energy we consume in Utah.

It does feel like a bit of a gimmick but it’s a positive one in my book.

#climate crisis

Betting On The Price Of Carbon

My partner Albert shared this article yesterday which suggests that the price of carbon will have to reach $150/ton by 2030 in order to create the conditions for the world to get to zero carbon by 2050. The current price of a ton of carbon on the EU’s Emission Trading System is about $60/ton and you can buy carbon offsets for much less than that although you may be purchasing junk credits if you are not careful.

If you bought carbon today at $60/ton and held it until 2030 and sold it at $150/ton, you would get 2.5x on your money and a roughly 11.4% annual rate of return. If you can figure out how to buy carbon for a lot less than $60/ton, then your returns could be a lot higher.

It is increasingly obvious that the world will need to get off its addiction to carbon in order to stave off very serious climate impacts. The path to doing so is fairly clear but will be expensive. This chart from our portfolio company Wren’s website shows how we might get there:

The bet on the price of carbon is a belief that the world will choose to eliminate its addiction to carbon over the next thirty years and that one way or another carbon emissions will become very costly and carbon capture will become very profitable.

If you believe that will happen, you can profit from it by investing in the price of carbon. There are many ways to do that and some will be more profitable than others. But a “macro bet” on the price of carbon feels like one of the strongest ones out there right now.

#climate crisis

Community Solar

We had a situation recently where a rooftop solar project on a building we own became too expensive (because of NYC Fire Department requirements) and it no longer made economic sense to do the installation. And yet we want to avail ourselves of solar energy to benefit from the economics of solar, to reduce our carbon footprint, and to increase the resiliency of our property.

So we are reaching out to some community solar developers in NYC who have built out solar infrastructure that the community can participate in.

I’ve been interested in community solar for a while now. It makes sense to me that a group of people can build and participate in a solar installation where it most makes sense and then share in the energy that installation generates.

Community solar works best when a consumer can receive a credit on their electrical bill for their community solar output. This is possible in the states that have deregulated their electrical systems.

At USV we think community solar represents an interesting way to participate in the renewable energy business and we are looking at a few opportunities now and would like to look at more.

#climate crisis

Putting Carbon Back In The Ground

As USV is now about six months into investing our first climate fund, I am starting to see more clearly what climate investing is all about and my partner Albert said something in a team meeting earlier this week that really stuck with me.

I did not write it down but it was something like, “we’ve spent two hundred years taking carbon out of the ground, burning it, and putting it into the atmosphere and what we now need to do is get it from the atmosphere and put it back into the ground.”

That is a simplification of the many technologies and projects that are underway to capture carbon and sequester it, but I am a fan of simple. In investing, the simpler the better for me.

#climate crisis

Nuclear Energy

When I was in my early 20s, I had a conversation with my dad. I told him I was against nuclear power because it was dangerous and because it created radioactive waste that we had no idea how to safely dispose of. He replied that there certainly were problems with nuclear energy but that they paled in comparison to those of burning fossil fuels. This was before greenhouse gases and climate change were front and center in my mind and the minds of most people. I was not convinced by my dad’s argument.

Forty years later, my dad is no longer with us, but his words ring loudly in my ears. I have come full circle on nuclear energy and now see it as way more attractive than most other forms of generating energy.

There are two ways of making energy with atoms. We can split atoms to generate energy and that is called Fission. Or we can combine atoms to generate energy and that is called Fusion.

We have understood how to make nuclear reactors that generate energy with fission for 80 years now. But these fission reactors have two unsolved issues. In rare situations they can get out of control and melt down. We have seen that at Three Mile Island, Chernobyl, Fukushima, and a few others. While rare, these have been scary events that have shaken confidence in the safety of nuclear reactors in the public eye. Fission reactors also create radioactive waste that we have not yet found a good way to dispose of and that nuclear waste has slowly been building up around the world.

We don’t yet understand how to make nuclear reactors that generate energy with fusion in a sustainable way, although there has been a lot of exciting technological progress on fusion over the last few decades. I believe fusion is not an if, but a when.

As we electrify more and more of our energy use, we will need ever more electricity and most students of energy consumption do not believe we can fully electrify our lives with renewable energy (solar, wind, hydro, etc). I’ve heard people say there is a 30-40% gap between what we need and what we can generate with renewables.

At this time, nuclear is the best way to close that gap.

At USV, we believe that fixing fission and making fusion work are technological and engineering problems that can be solved with sufficient creativity and capital.

In fission, that means figuring out how to make reactors that are not prone to catastrophic meltdown and figuring out how to use/consume the radioactive waste that fission generates. There are a number of promising technologies that are attempting to do these things.

In fusion, that means figuring out how to make a reactor that generates more energy than it is given. The progress on that dimension is promising but we are nowhere near where we need to be and more creativity and capital will be needed to solve the fusion puzzle.

Our climate fund is focused on both mitigating the climate crisis and adapting to it. Solving these technological problems with fission and fusion is an important part of mitigating the climate crisis and we are talking to teams working on both approaches.

I am excited to do that and believe my dad would be too.

#climate crisis

Solar For Outdoor Devices

A trend I’ve been watching for a while now is the use of solar for devices that live outside away from electrical outlets.

Last summer, I bought an inexpensive device that keeps snakes away from our yard. It vibrates into the ground like the animals that hunt snakes and scares them away. I don’t really know if it works but we have not seen any snakes since we got it. The device is powered by a small solar device that is on top of it. Installation was basically pushing it into the ground.

This morning on my way back from getting coffee, I passsed this Citibike station.

I have noticed that most (all?) Citibike stations are now powered by solar. I imagine they also have a battery of some sort that stores solar energy for use at night.

Solar is slowly but surely making its way into all of our lives. It is a great way to power homes and offices, cars and buses, and, it turns out, all sorts of devices that live outdoors away from the electrical grid.

#climate crisis

Geothermal

We have a house in the northeast United States where the summers are warm and the winters are cold. We have solar on the roof and we heat and cool this house with electricity. This is the electrical generation/consumption chart for all of 2020 for that house:

We produce almost all of the heating and cooling for that house with solar power. How do we do that?

We use geothermal energy to heat and cool it. We drilled wells down into the earth and pull water up to heat the house in the winter and cool the house in the summer.

The combination of solar on the roof and geothermal heating and cooling is powerful and can get you off the grid if you design your house appropriately. It will be hard for us to get our house completely off the grid because we have large south-facing windows that generate a lot of solar load. But even with that, we are pretty close.

Geothermal is a technology with a lot of potential to address the climate crisis and we have been studying it at USV.

My colleague Hanel wrote an excellent post on USV.com last week talking about our interest in Geothermal and areas we are most interested in investing in.

Here is the opening paragraph:

Geothermal energy has massive potential: just 0.1% of the Earth’s heat content could supply humanity’s total energy needs for two million years. Geothermal power is essentially inexhaustible and resilient; unlike solar and wind, it can run as baseload power around the clock, and uses a reliable, onsite resource not subject to surface climate conditions or fuel-price volatility.

You can read the rest here. If you are working on a geothermal startup, go read Hanel’s post and you can reach out to her on Twitter if you want to talk to us about what you are working on.

#climate crisis

Crypto and Climate Continued

I wrote about crypto and climate earlier this month and suggested that the narrative that crypto is bad for the climate is not as straightforward as many make it out to be.

Over last weekend (a beautiful one in the northeast), two of my partners wrote on this topic.

My partner Albert took a similar approach as I did in my post and outlined many reasons that crypto and climate are not at odds with each other. He went further than I did in my post and it is worth reading his, even though they are similar.

My partner Nick went out on a limb and compared Bitcoin to a battery. He used that analogy to be provocative. He took some heat for doing it, but I think it was worth it because you sometimes have to stake out a provocative position to get people’s heads to turn a bit on something.

This is the key part of Nick’s post:

Which brings us back to crypto mining. Crypto mining converts electricity into value, in the form of crypto assets (BTC, ETH, etc). Those assets, like the aluminum produced in Iceland, can then be moved, transferred and transformed. But unlike aluminum, which must be physically shipped to its final destination, crypto assets are programmable, and can move there instantly via an internet connection.

So, if we think of Bitcoin as a battery, what can we do with it?  The key properties of Bitcoin’s battery are: 1) always on and permissionless (no need to find customers, just plug and go) and 2) naturally seeking low-cost electricity: it will always buy when the price is right.

https://www.nickgrossman.xyz/2021/bitcoin-as-battery/

We have been addressing this topic (crypto and climate) for multiple reasons. First, because we believe the narrative in the mainstream media is too simplistic and we would like to see it evolve. And second because we know that there are many entrepreneurs out there that are working with crypto to help address the climate crisis and we would like to meet them.

Nick and Albert’s posts last weekend opened the floodgates on the latter point and we are now talking to a number of very interesting projects as a result.

#climate crisis#crypto

Crypto and Climate

I keep reading that Bitcoin, Ethereum, NFTs, etc are a climate issue.

It is true that proof of work mining which secures the Bitcoin and Ethereum blockchains uses electricity to do that work. And certainly there are carbon emissions associated with that electricity consumption.

However, it is not as simple as that for the following reasons:

1/ Proof of work miners are constantly seeking the lowest cost of electricity to mine with. That leads them to electricity sources like geo, hydro, solar, and wind. There is a meaningful financial incentive to mine on clean energy in many cases.

2/ The Ethereum blockchain is moving to proof of stake and moving away from proof of work. Many other popular blockchains, like the Flow blockchain that powers NBA Top Shot and other NFT experiences, already use proof of stake. Proof of stake consensus uses vastly less electricity to secure the network.

3/ There is a narrative that much of China’s Bitcoin mining happens on coal powered electricity, but I have read that most of it happens on China’s overbuilt hydro capacity.

4/ Proof of work mining can stimulate the buildout of clean energy capacity because it can produce immediate monetization of that capacity.

It is time for the crypto industry to study this issue carefully and provide real data. I would like to see carbon emissions from proof of work mining measured over time and projected into the future.

#climate crisis#crypto

Going Off Grid

It is terrible what is happening to people in Texas and other parts of the country where this super cold snap has caused power outages and freezing cold temperatures in their homes.

But it is also a reminder that we need not be reliant on the grid. In fact, we should figure out how to reduce our reliance on the grid when things like this happen.

Until recently, that generally meant a generator that is powered by oil or gas. And that is still a good thing to have when the grid becomes unreliable.

But there are also new ways of doing this with solar and batteries.

A Sonnen Eco battery can store up to 20kWh. A Tesla Powerwall stores 13.5kWh.

A fully electrified home, heated and cooled with energy-efficient heat pumps, would consume on average 20kWh per day to heat and cool the home in a moderate climate. Rooftop solar could produce that or more on most days on sunny days.

A home that is fully electrified and has rooftop solar could operate off grid many days. Adding a battery means that the home could also operate off grid at night.

And when the grid goes down, the combo of solar, battery, and a heat pump could allow a home to stay warm (or cool) for as long as necessary.

I have been drawn to this model of resilience and have been working towards it personally for a while now. I think what is happening with the weather out there might be the catalyst for many more to think this way.

#climate crisis