Our Investment in Energetic Insurance

Modern finance to enable renewable energy deployment

Widely considered the tip of the spear of the renewable energy transition, solar energy has benefited from market forces and technological advances that have materially reduced the cost of installation and spurred its deployment. According to MIT News, improvements in the efficiency of photovoltaic modules and global economies of scale in their production are two major reasons solar energy has fallen steeply down the cost curve and, as a result, experienced a surge in adoption. Government policies have also been a boon to the solar industry, with the Biden Administration’s proposal to source 45% of U.S. energy from solar (from a current share of 4%) by 2050 serving as the latest example. 

Commercial solar installation has been uneven but has steadily grown over the past decade. Onsite solar’s share within the commercial market still remains very small.

In spite of solar energy’s overall growth and the continuing tailwinds driving it, penetration in the commercial & industrial (C&I) market continues to lag behind residential markets. The primary reason for this is that commercial installers have poor financing options, due in large part to the absence of a standard credit score. An estimated 90% of organizations are unable to deploy solar projects because their credit is unrated or deemed below investment grade, which results in fewer lenders underwriting prospective C&I solar projects due to perceptions of heightened default risk.

Energetic Insurance, a Boston-based company enabling more organizations to access solar energy projects, is addressing the underwriting risk that hinders C&I from obtaining financing for solar installation. It does this by providing developers seeking financing for C&I projects with “trade credit insurance,” which guarantees loan repayment in the event the organization faces insolvency or bankruptcy. Energetic leverages a full-suite of software tools to model risk and manage insurance claims. Energetic’s co-founder & President, Jeff McAulay sat down with Jason during an MCJ podcast interview over the summer and shared the company’s story and mission. We’re pleased to announce our investment in Energetic, as the team — which includes co-founder & CEO James Bowen — executes its vision of applying modern finance tools and technology to spur renewable energy deployment.

What is Energetic?

Operating at the intersection of climate, insurance, and FinTech, Energetic enables more C&I organizations to access onsite solar energy by ensuring project developers have greater access to financing. Through its EneRate Credit Cover® product, Energetic de-risks the underwriting opportunity of C&I solar projects by guaranteeing payment to lenders in the event of an organization’s default. Serving as a Managing General Underwriter (MGU), Energetic is authorized to underwrite policies on behalf of the insurance carrier with whom it partners as well perform a range of activities of a typical insurance company.

Energetic offers protection against default by the “Business Buyer,” allowing the “Project Co.” to mitigate risk and access financing from the “Bank.”

Energetic makes money by receiving a percentage of the insurance premium, in exchange for the company’s work to underwrite and price the risk on behalf of its partnering insurance carriers. Since Energetic gets paid based on the size of each deal rather than a typical SaaS fee, its top-line revenue grows as it serves more and larger C&I developers. Notwithstanding, the company aims to keep policy costs affordable, allowing more organizations to access solar projects.

Why Did We Invest?

Compelling Founder-Market Fit

Energetic founders, James Bowen and Jeff McAulay, both have robust backgrounds in the renewable energy sector. Prior to founding Energetic, James co-founded Vertex Energia, a developer and investor in renewable energy projects, and Jeff spent several years at EnerNOC, driving partnership strategy in solar, storage, and distributed energy resources. Their relationship spans a decade, in which they’ve collaborated multiple times in the realm of energy and entrepreneurship. And a fun fact is that they were fellow co-working space tenants of Jason’s prior to the pandemic.

Impressive Market Traction

Since its founding in 2017, Energetic has achieved impressive traction towards its mission of helping project developers deploy solar installations at C&I sites. Backed by one of the world’s largest reinsurers, SCOR SE, Energetic has insured more than 160 sites, amounting to over $70MM in insured value. The projects it insures cover 12 U.S. states and the company plans to expand overseas in the not too distant future.

With its latest round of funding, we believe that Energetic is well-positioned to expand on its value proposition, paving the way for more commercial and industrial facilities transitioning to clean renewable solar energy.

Additional Resources

If you are an accredited investor, and want to learn more about being an investor in our fund (to back more great companies like this one!), reach out here.

Episode 179: Corporate Climate Initiatives and the Clean Energy Transition with Microsoft's, Brian Janous

Today's guest is Brian Janous, General Manager of Energy and Renewables at Microsoft. We cover Microsoft’s climate commitments, the clean and sustainable energy future, and how we get there.

Listen now!

As always, please consider giving us a rating or leaving a review. We heard that helps spread the word about our little show and engages more folks in the climate fight!

Well, to kick things off, maybe just talk a little bit about your current station, what you're up to at Microsoft and where you sit within the organization.

So I'm responsible for our global energy strategy for our cloud infrastructure for our data centers, which for Microsoft is really all of our energy consumption. It represents about 95% of our energy consumption. And I- I've been in this role for 10 years. I started, um, I was actually the first person to come to Microsoft to work on energy. At the time, it wasn't even clear to me why a company like Microsoft needed someone like me. In fact, I told the person that was recruiting me into the role that it sounded like a dead-end job to be an energy guy at a tech company. I just didn't understand.

So when you came into Microsoft so many years ago, what was the landscape at that time? So you talked about how the cloud business was nascent and growing. What was motivating them to create this energy role and what was the charter of the role and of the organization then it sat in at the time?

Yeah. So at the time, it was pretty pragmatic. It was, hey, we're starting to build these data centers and someone said, "Hey, I think we're going to have to spend some money on electricity. I think we're going to have to, you know, figure out how to enter into a contract with a utility, how to acquire the infrastructure, how to think about how we manage the rates." There wasn't a whole lot that was super strategic behind at the time. It was- it was just very pragmatic.

But as time went on, I think it became clear that energy actually, in fact, I've heard Satya say, is an existential issue for the company. As we've transitioned to being a company where when I joined cloud was the low single-digit percentage of our revenue and today it's approaching you to know 50% of the company's revenue, it's become a lot more clear that, and again, all of that is runs on electricity. Energy is critically important to us, both for growing our business because we are a very large energy consumer, data centers represent about 1 to 2% of the world's electricity consumption and the big cloud players are in the hyper-scale companies are a pretty big percentage of that.

And as we look through this next decade, I think the cloud companies will be the sort of single largest commercial consumers of electricity in the world. So that's kind of a big deal. But the other issue of course is then how we think about the source of that electricity. And over that time, over the last decade, sustainability has increasingly come a more important issue for the company and therefore the focus quickly goes to, well, what are the biggest sources of carbon emissions for the company?

And of course, electricity rises to the top pretty quickly. And so that was the other issue that- that happened over the last several years, is that has sort of risen, increased the importance, I guess, of energy and how we consume energy and what the source of that energy comes from and when- why it's become so important for Microsoft.

So as it sounds like you know since you've listened to some episodes of my show before, I've been on this "climate journey" for the last few years, I've been so impressed by some of the recent moves that Microsoft's been making in terms of not only the boldness of your goals but also the detailed and structured thinking that's gone into the plan and the transparency to make all of that public. What's been Microsoft's climate journey, if you will? Did that all come from nowhere or was that kind of quietly brewing under the hood? Can you talk a little bit about what you've seen from the company when you came in today in terms of that evolution?

Absolutely. And I've been there for most of it 'cause I was actually doing some consulting for Microsoft dating back to 2008. And so I've been at the table for almost every decision that the company has made around commitments around climate. And- and the most significant one initially was in 2012 when we committed to being carbon neutral. And so this was sort of our first foray and at the same time we established an internal carbon tax where we said, "Okay if we're going to- if we're going to be carbon neutral, we're going to make sure that the businesses that are responsible for carbon emissions actually have to foot the bill." And so we started with a carbon tax that taxed all of the business groups, and that- that money then went into a centralized fund and we used it at that time to largely buy renewable energy credits and carbon offsets.

Why was it a pull from the top? I think it's great, but I want to understand it because even today, most organizations are not getting that pull from the top. Like they might get a push from employees, they might get a push from fear of future regulation that's coming, but they're- they're not excited about it, I don't think.

No. But I will answer that with a bit of a story. I was on Twitter yesterday and I saw our former CEO, Steve Ballmer, who was party to many of the early conversations around this when I would have said that sustainability was maybe a nice to have for the company, but it wasn't a priority. So Steve now the owner of the Clippers was discussing the new arena that they're building and he said, "You know, this hasn't always been an important issue for me, but within the last years, I've really come to take this issue seriously."

And he said, "The reason was my kids. My kids finally got to me." And he goes, "We're going to build the most sustainable arena," you know? And he starts going through all the stuff they're going to do about how important it is for their business to really lead on sustainability. And it was because it was a personal value of his. He's the boss, he's the leader, he gets to set the tone. He wasn't talking about, "Oh, because it's going to be more efficient, it's going to save us money or this is..." He was saying, "My values are driving this decision."

So what I observed over that period of time and Steve readily admitted those weren't core values for him back you know in that timeframe. So as the guy who was at the top, he was not pulling us to say, "Go faster, go bigger, do more." But what happened over time is that I started to see each and every year that sustainability started becoming more and more of a value of our executives such that when we made that commitment, the announcement, the carbon negative commitment, it was Satya, Brad Smith, our president, and Amy Hood, our CFO, who were the ones that were on stage announcing that this is our commitment, this is what we're going to go do.

And they're talking about scope one, two, and three emissions and there's like all this stuff that five years before that, there's no way the executives from Microsoft would have been on stage saying something like that. But it shifted to become something that was marginally important or at least, yeah, we'll spend a little bit of time thinking about this too. Something that elevated to becoming a core value of the company and then once it- once it's of value, then you're not debating about, you know, well, what's it going to cost or how many resources? It's like, no, this is what we're going to go do, go figure it out.

One thing that I wonder about is in order for sustainability to really become of value in practice as you were describing, it can't just be a group that is preaching it that sits outside of the business units, it really needs to be infused in each and every decision within the business units. So if you have a group that it's not infused in the business units, but if it's infused in the business units, then everyone owns it and no one owns it. So how have you structured things at Microsoft and what learnings might there be from that journey that you've had internally that people at other companies trying to figure out similar to my benefit from? 

Yeah, you're right. I think you kind of alluded to, you know, if it's everyone's job, it's no one's job, right? And so I think there was a period of time where I would have said that about Microsoft, that if you would have asked, for instance, even on our SLT five years ago, who's accountable for sustainability, they would've thought it was a trick question. Like all of us are nobody or what? Like no one knew because there wasn't that clarity of- of priority and of stilling that as a value that we have today.

And so when we were actually around the time of making our carbon-negative commitment, Satya also tapped Brad Smith our president with being accountable for sustainability. That was the first time that any SLT member had ever been given that accountability. We have since added to that where we actually have a compensation scheme for the executives that are also tied to sustainability. Again, it's going back to, how do you make something of value? Right? You make it important to the executives.

And we actually have a committee that meets on a quarterly basis, a climate council, and each SLT member has to-to nominate someone to that council. So there's just a lot of just sort of fundamental things like that where once it's coming from the top and saying, hey, this is a- this is of value for the company, you are going to be you know, as a team member evaluated on the degree to which your part of the organization is driving towards certain sustainability goals and metrics. It becomes a non-negotiable.

And I get the question a lot about you know how do you build a business case? 'Cause you know, there's always going to be a price tag associated with these things. And once something becomes of value, people stop talking about the business case. Like for instance, customer privacy is a core value of Microsoft. No one sits around in debates, is it too expensive to keep you know customer data safe? It's like, well, that's a non-negotiable for the company.

There's no price at which we would say no, no it's too expensive to do that. No, that's- that's the reality of doing business in the world that we operate in. And it's gotten to the point within Microsoft where sustainability sort of sits at that same level, that there are not these debates going back and forth of like, well, can we really afford to buy more renewable energy? Can we really afford to buy lower carbon you know materials? Once we made the commitment to say this is what we're going to be as a company, we're going to operate as a carbon-negative operation. Now it's just the debate about how.

We knew, going in and as we sat around, you know, with the executives when we're making this decision about coming up with this you know, carbon-negative framework, we were very clear we have no idea how we're going to get there. Like there's a lot of stuff that we just don't know. Like we had some pretty clear path on some things like electricity, that was one. I was like, "Why shouldn't we go buy a lot more, a lot faster?"

But there were a whole lot of things in our supply chain where it's like we don't even have perfect visibility into what- what's in there, like what's in that giant bucket of scope three. And so we certainly don't have a roadmap yet or didn't at the time. We have, since, you know, since we made that announcement, I've done a lot of work to develop clear year by year roadmaps of how we're going to get to 2030 but we didn't when we made the announcement. That was really about saying, "Hey, this is just going to be of value. And as leaders, we're going to send this message and we expect everyone then to go figure it out."

Given that ultimately I would assume that the goal is low cost, highly scalable carbon-free energy, so there's kind of a cost lever, there's a carbon lever and there's a performance lever. And maybe there are other levers I'm not thinking about so feel free to enlighten me. But the question I have is not all of those are gonna come together at once, it's a journey over time. So how do you prioritize along the way?

That's great. And you hit the nail on the head. I mean, for us, it is, if you ask anyone on my team, what are their priorities, they're going to say it's- it's reliability, right? So we have to be able to keep the lights on to deliver services to our customers. It's cost, we've got to continue to drive costs down so that we can grow the business and you know, provide the services we wanna provide. And it's- it's sustainability. We have that, that is also a... So we basically have three non-negotiables that we have to balance all the time.

And of course, there's going to be trade-offs along the way. Of course, there's going to be times where we can't get all three together, you know, in the way that we like. I think, you know, an example of that right now for us is, you know, what we're trying to do with our diesel generation fleet. You know, we set a goal to be off of diesel fuel by 2030, once again, a goal that when we set it, we didn't really have a clear vision as to how we were going to get there.

But our thinking behind that was reliability for cloud services is a non-negotiable, therefore you- you always have to have that backup, some form of backup because the electricity grid is- is never going to be perfectly reliable. So that's why data centers are built with generators and UPS, you know, battery-based backup. So we were looking at that going, "Wow, that... this whole diesel thing is a perfect issue of thinking about cost and reliability and sustainability because we know we can't keep just building more and more gigawatts of data centers backing them up with diesel plants."

So we set that goal and that's really set us off on a journey to say okay, what can we do to drive down the cost of sustainable fuels for instance? And so we'd done some of our first deliveries. Our first one was in Sweden and we've recently done some more here in the US of renewable diesel fuel and HVO fuel in Europe. And there's a cost premium associated with that, and we get that, but we're also looking for opportunities you know via our climate innovation fund or our billion-dollar climate fund to start to invest in some of those technologies and some of those companies to help drive those costs down.

But we have to still have reliability. So we can't sacrifice that and say, "Well, the easiest way to you know lower the cost, improve our sustainability is to get rid of any sort of standby capability." Well, that's a non-negotiable. So we have to go solve that problem some way, we have to be able to provide reliability, but at the same time, achieve those other objectives.

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Carbon Dioxide Removal: The Unreasonable Bet We Need

By Ilan Gur

Carbon Dioxide Removal: The Unreasonable Bet We Need

By Ilan Gur

Last month, we launched Activate’s CDR Imperative to support entrepreneurial scientists whose ideas can allow for permanent, gigaton-scale carbon removal. We’ve been thrilled by the positive response so far, including from potential applicants. But I’m concerned that we failed to include an important disclosure: 

Starting a company to do gigaton scale carbon removal is an entirely unreasonable proposition. 

Separating carbon dioxide from air requires sifting through 10,000 fairly inert air molecules and grabbing hold of the four that are CO2—basically the chemical equivalent of harvesting four-leaf clovers. Now, do it efficiently with a process that can scale to processing a few hundred thousand liters of air per day per person on the planet. Now make it dirt cheap (removing CO2 at anything sub-$100/ton will require a process as economical as those used to produce the cheapest commodity chemicals on earth). In case that doesn’t sound daunting enough, there’s one more small hurdle: the market for large-scale removal doesn’t exist.

Nothing about large-scale CDR provides a reasonable basis for a startup. But history has taught us that unreasonable may be exactly what we need right now. Let me share a story to illustrate what I mean:

In 1985, an electrical engineering Ph.D. scientist named Dick Swanson decided to start a solar company. Dick believed the research in his budding field of photovoltaics (PV) would yield an industry capable of displacing fossil fuels in powering our world. He had enough conviction in that vision to walk away from a coveted tenured professorship at Stanford to jump in unharnessed as a first-time entrepreneur. 

What must have gone through people’s minds when Dick told them about the bet he was making? In 1985, PV was little more than a novelty, producing electricity at the equivalent of over $5 per kWh, 100x more costly than electricity from a home outlet. Meanwhile, a processed silicon wafer that yielded dozens of microprocessor chips and many thousands of dollars in revenue for a company like Intel could generate at best a few watts of electricity if deployed as a solar cell. The viability of PV powering homes or the grid was unimaginable. Dick’s startup was as unreasonable as they get.

But the future need not always be reasonable. 

Researchers and developers, subsisting on grants and niche markets, quietly advanced PV technology. Meanwhile, policymakers in the US, Germany, and Japan quietly advanced the market. Soon enough the tech push linked arms with the market pull, and everything changed. Dick’s startup Sunpower grew into one of the solar industry’s biggest corporations, solar became energy’s fastest-growing sector, and today solar PV produces the cheapest electricity the world has ever seen.

Maybe it’s not such an unreasonable proposition to suggest that CDR is destined for a similar trajectory. The tech push has already begun, with direct air capture and early demonstrations across a range of other technical approaches like accelerated mineralization, bio-conversion, macroalgae sequestration, and more. And advanced bioengineering, combined with the natural chemical plants of our forests or oceans, may offer new solutions with even faster and cheaper scaling laws. On the demand side, corporations like Stripe and Microsoft have stepped in as buyers of first resort, creating a nascent market far sooner than anyone expected, and raising the prospect of further action from governments around the world. Such accelerants are critical since we no longer have the luxury of taking decades to scale climate solutions.

Neither the conviction nor the financial backing existed to support Activate’s CDR Imperative a mere 18 months ago. But what was unreasonable then seems like a no-brainer today. As part of our new imperative, Activate Fellows advancing CDR solutions will benefit from a powerful syndicate of support, leveraging philanthropic funding from the Grantham Foundation, Climate Pathfinders Foundation, Additional Ventures, and the Chan Zuckerberg Initiative, as well as carbon removal procurement contracts from Stripe, and ecosystem and policy support from Carbon180. 

I often think of George Bernard Shaw’s assertion that all progress depends on the unreasonable individual. It’s far too easy to assume that Shaw is referring to someone else, someone more exceptional than you or me. I’d like instead to imagine that each of us can choose to be that person. To be unreasonable. To attempt the impossible and lead us forward.

I’ve had the pleasure of getting to know Dick when he served on Activate’s board of directors. If you ask him about that early decision to leave his job and start Sunpower, he’ll humbly tell you there was nothing superhuman about it. It was simply the path he was excited to take, motivated by a future he was excited to see. He’ll also tell you that no matter how hard things got along the way, he woke up every day knowing that simply being on the journey was a privilege. 

Dick is right: diving into the deep end of the unreasonable is a privilege, predicated on access to knowledge, networks, and resources that are far too inequitably distributed. One way we’re using our privilege in the innovation ecosystem is to reach and support innovators from populations traditionally excluded from the sciences and in entrepreneurship. We’d love for the passionate, committed MCJ community to join us: Help us reach more aspiring science entrepreneurs across the country who need resources to turn their innovations into solutions!

  • Nominate scientists who are developing products aimed at CDR or any other aspect of decarbonization and climate resilience to apply for the Activate Fellowship. If you’re the first innovative, climate-focused scientist who comes to mind, and if you’ve got the technology you’re ready to commercialize: Apply for the fellowship!

  • Let your networks know about Activate and our paid, two-year fellowship.

  • Join us! We’re growing our team and partnerships.

  • Get involved—there are many ways to pitch in.

Applications for Cohort 2022 are open until November 30, and this year applicants have four different communities to choose from: Berkeley, Boston, New York, and Activate Anywhere, which will support fellows anywhere in the U.S. 

Thank you! When it comes to climate, the unreasonable individual won’t cut it. Progress depends on all of us, supporting one another as we work to create an unreasonably better future together.

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🎙Startup Series

This week, Jason sat down with Henrietta Moon, Co-Founder & CEO of Carbo Culture. In this episode, Henrietta and I deep dive into biochar, its impacts on climate, and why the climate community has been apprehensive about embracing it. We also cover Carbo Culture and what the startup is working on!

Listen & Subscribe

✨Highlights

Communities News

Community news and announcements

  • This week, long-time community member and MCJ podcast alum, Bill Weihl, was highlighted in Grist! Check out Report: Corporations are tanking America’s best shot at fighting climate change for more on Climate Voices and how corporate America is affecting climate change!

  • 📋The results of our quarterly member survey are in. Thank you to the many MCJ members who took the time to respond and share their views on how we can improve the community experience. Here are some quick highlights:

    • Member NPS improved markedly from 40 in Q2 to 53 in Q3 — a meaningful increase over the past couple of quarters.

    • An overwhelming 87% of respondents indicated that networking and connecting with like-minded individuals with a shared interest in climate was a key motivator to becoming a member. This was followed by 69% of respondents who cited a desire to learn about climate change topics as a reason for why they enrolled in membership.

    • The prevailing feedback we received spoke to a desire for more in real person events in the various geographies members live around the world.

  • 🏙Calling on MCJers in London! The #london channel is planning an event for this month. Check out this poll to vote for a time that works for you!

  • 🏙MCJers are getting together in Chicago later this month! Don’t forget to vote in the poll for a time to meet up and meet others in the windy city.

Climate Jobs

For more open positions, check out the #climatejobs channel in MCJ Slack.

Climate Events

For more community events, check out the #events channel in Slack or the MCJ Calendar on Luma.

🗽MCJ NYC Meet up (Wednesday, October 20th at 6:30 pm ET)
Come meet MCJers in NYC! First time? There are normally about 20 of us who show up, newcomers and regulars. Some people already work in climate, others are transitioning to it. Looking forward to seeing you all again soon! RSVP here

💡MCJ Ideas Jam (Thursday, October 21st at 9 am PT/12 pm ET)
 For those new to MCJ, this is a monthly 1-hour pitch event where MCJers pitch their climate business or idea to the community and guest experts. If you are interested in also presenting your idea, feel free to reach out to Mehrad Yaghmai directly in the slack. Please use this RSVP form to register for the event.

🌁MCJ Bay Area Meet up (Sunday, October 24th at 3 pm PT)
MCJ SF Bay Area gang! We are hosting another monthly SF meetup to connect, ideate, share ideas and get help from like-minded friends. Our next one will be Sunday, October 24th at 3 pm PT at Radhaus (Landmark Building A, 114, San Francisco, CA 94109) RSVP here

🏙MCJ Boston Meet up (Tuesday, October 26th at 6:30 pm ET)
Meet MCJers in Boston! Stay tuned for deets on the location, but for now, mark your calendars! Feel free to DM Amira V with your email address and she’ll add you to the invite.

🎙MCJ Podcast Listening Study Group (Wednesday, October 27th at 9 pm ET)
Join the very first MCJ podcast listening study group later this month! We selected a classic first episode to listen to, How to Save a Planet: Is Your Carbon Footprint BS! RSVP here!

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Our Investment in WattBuy

Empowering enterprises by delivering access to affordable clean energy for their consumers

We’ve previously written about how, in spite of the growing supply of renewable energy being generated, there remains a small minority of U.S. homes powered by — or purchasing — clean energy directly. Renewable energy faces several ongoing challenges to furthering its adoption by consumers: awareness of flexible options that go beyond installing rooftop solar, engendering trust in the energy provider, and surfacing recommendations when consumers are most receptive to the proposition of green power. 

New York City based WattBuy is addressing these areas of friction by creating a digital distribution network for clean energy plans, which consists of online real estate, financial services, and home energy management companies.

We’re excited to announce our investment in WattBuy, whose CEO & Co-Founder Naman Trivedi was a recent guest on the MCJ podcast. Since its founding in 2018, the company has rolled out its offering across the U.S., developed partnerships on both the energy supply and demand side, and enrolled thousands of consumers on clean energy plans. We look forward to continuing to support the company’s growth and its mission to increase access to affordable and sustainable electricity.

What is WattBuy?

WattBuy provides online services, in industries such as real estate, energy, and personal finance, with access to affordable clean energy plans that the companies can offer to its end consumers. With WattBuy’s API, companies can offer their customers personalized electricity plans, solar options, and other clean energy products.

Leveraging machine learning, WattBuy gathers property and climate data from a number of sources to forecast estimates around electricity consumption. This approach enables the company to tailor its recommended plans based on the address and characteristics of homes throughout the U.S.  By distributing clean energy plans through partners, such as Mint or Opendoor, WattBuy is able to present sustainable electricity options when prospective customers — typically using those services to view their electricity expenses or planning a move — are most receptive.  This contextually relevant distribution model is key to providing WattBuy’s network of clean energy suppliers with the lowest cost to acquiring customers. Companies that integrate with WattBuy’s API reap a meaningful revenue share of any energy plans sold as well as a brand lift that comes from providing this sustainable offering. WattBuy makes money from commissions resulting from enrollment as well as platform fees for use of its API.

Why Did We Invest?

Expanding Access to Affordable Clean Energy

According to Pew Research Center, approximately 6% of U.S. households report installing rooftop solar. With so few American homes running on renewable energy, WattBuy represents part of the digital infrastructure required to increase uptake of clean energy plans by expanding access through improved distribution and raising awareness among end consumers.

Growing Traction and Market Expansion

Since its founding in 2018, WattBuy has sourced over 4,000 clean energy plans from 25 electricity providers that are available in 11 states across the U.S. In addition, it has developed relationships with a number of consumer Internet companies across several strategic categories.

By simplifying access to clean energy and educating consumers on the climate impact of purchasing it, WattBuy is helping to power more homes with renewables. We expect that, as the company scales, its service will prove to be an integral part of rolling out sustainable electricity throughout households across the country.

Additional Resources

If you are an accredited investor, and want to learn more about being an investor in our fund (to back more great companies like this one!), reach out here.

Episode 178: Cryptocurrency and Climate Change with Crusoe Energy's CEO, Chase Lochmiller

Today's guest is Chase Lochmiller, Co-Founder & CEO of Crusoe Energy. Crusoe is on a mission to eliminate routine flaring of natural gas and reduce the cost of cloud computing.

Listen now!

As always, please consider giving us a rating or leaving a review. We heard that helps spread the word about our little show and engages more folks in the climate fight!

Which is the problem Crusoe Energy is focusing on?

It's called flaring. Flaring results when oil companies drill oil wells, oil is the primary product that they're, you know, looking to get, and they produce natural gases of byproduct to that production. And, when they don't have midstream infrastructure, they basically transport that gas to a downstream market where it can be sold and consumed. What they're left with is their next best option is either to vent it or flare it. Venting is terrible for the environment. Methane's an incredibly potent greenhouse gas. It traps 84 times more heat in the atmosphere than CO2. And flaring it, they also end up venting quite a bit of the gas as well, just because flares don't fully combust the methane.

Flaring meaning set it on fire?

Exactly. It's just a big flaming fireball out in the middle of the oilfield. If you look at the EIA website, you can see the history of flaring. It's not a new problem. It's existed since we've been producing oil and gas. To me, it's low-hanging fruit in the energy transition. So you have initiatives like the World Bank has the initiative to end routine flaring by 2030, and it's been signed on by, you know, many different, large, global oil companies. But the reality is there aren't great solutions for it. It's a tough problem to solve in an economic capacity. And what Crusoe's solution was, instead of having them flare that gas or vent that gas, we're able to capture it onsite, and then co-locate data cells alongside the oil and gas production. And then, utilize that gas onsite to generate power, to power these mobile modular datasets for high-performance computing and digital currency mining, uh, applications.

So, putting aside the emission footprint and the harm for the collective good on the planet, what are the advantages and disadvantages of flaring versus venting for these oil and gas companies?

Flaring is better than venting but it's still not a super-effective way to deal with a natural resource. It's almost a tragedy that the quantity of gas that's being flared globally is not being captured for any sort of beneficial use. So, you know, putting some numbers in perspective here, globally, we flare about 14 1/2 billion cubic feet a day of natural gas. Domestically, here in the United States, we're about 10% of that. So, about 1.4 billion cubic feet a day. Fourteen and a half billion cubic feet a day from a power perspective could generate about 65 gigawatts hour, basically power Africa. So, really substantial global waste that's occurring. I mean, it's creating a large climate impact, alongside being an incredible waste of that natural resource.

Can you talk a bit about the process of taking this flared natural gas and using it to power these data centers? And also, what's special or differentiated about it, relative to anyone else that might go and see your success and try to follow suit?

We generally set up onsite that all of our equipment is designed to mean mobile and modular, so we have individual data centers that we ship to the site. And then, we have power generation equipment that we ship to site as well. They basically have a gas line that feeds into this big flare stack, which is just this big tower; it's this giant fireball sitting on top of it. And we've got a bunch of photos and videos kind of on our website. A few years ago, having never spent time in an oil field, like seeing this firsthand, I was like, "Holy cow! This is insane." Seeing it happen, like driving around to the Willinston Basin in North Dakota, and just kind of seeing how prevalent it was, just kind of everywhere, which was kind of, uh, shocking.

We take a tee-off of that pipeline that feeds their flare line, and then the gas sort of feeds into our system. And then, we use that gas to generate power. In doing that with gas engines that we use, we do what's called stoichiometric combustion, which means they're getting the right air-to-fuel ratio to fully combust the methane. So, we end up getting a, you know, 99.99% combustion efficiency with the methane, as opposed to, you know, something closer to, you know, 90 to 93% of the methane getting combusted in a flare. That methane savings is actually a massive reduction in CO2 equivalent for the actual climate impact of flaring compared to the usage of digital flare emission. Putting it in perspective, one of those systems, on an annual basis, is a net reduction of 8,000 tons of CO2 equivalent per year.

By using the flared natural gas, it is getting consumed by the data center rather than released into the sky?

You end up getting full combustion of the methane. It's like air from a climate impact standpoint. It's not too dissimilar from something like biogas, that's emitted from cattle or livestock. If you're able to capture that and combust it, it's actually a massive environmental improvement compared to just letting cows belch, fart, into the atmosphere directly. 

What kind of scale are we talking about in terms of how much that natural gas is being utilized?

We have about 60 units deployed today. The bulk of that footprint is across Willinston Basin, in the North Dakota. So, we look at flaring as a problem. You know, it's kind of, domestically, the North Dakota-Montana area called the Willinston Basin. That's kind of one of the biggest, you know, flaring areas in the country, as well as West Texas. It is called the Permian Basin. That's the other major flaring market in the US. We're mostly deployed up in that North Dakota-Montana region. And we also have operations in Wyoming and Colorado. And we're planning to expand into the Permian later this year. Secondarily, a lot of the technology that we've deployed is useful in other capacities that are not a waste methane recoveries set-up.

So, we actually have a big project that we're working on in the wind energy space, where we're able to actually co-locate data centers alongside a very large-scale wind farm. And, in doing so, we provide this buyer a last resort, and that helps wind energy companies underwrite the development of more and new projects that helps accelerate the transition to a more renewably powered grid. The real problem there is this asynchronicity that you have between how renewables generate power and how humans consume power.

Wind turbines are going to generate power kind of when the wind is blowing. Humans are going to consume power when they get hot and they want to turn on their A/C or when they get home and they want to charge their EV or, you know, turn on their TV. Those two things aren't necessarily always in sync. You have this sort of problem that wind farms often don't have a marginal buyer, an electron that's being generated, which is why you're seeing, at times, negative power pricing in markets like the ERCOT in Texas. But then, you also have this problem where you actually don't have enough deployed capacity to meet sort of the peak demand. So, we saw this happen earlier this year when, you know, there's a big freeze in Texas or when it got very hot this summer, we saw power pricing spike up to $9,000 a megawatt hour. This is a very crazy price for consumers to pay for power. And part of that is there's wasn't enough capacity deployed onto the grid. So, by being able to create a flexible interruptible load, you can actually create an opportunity to accelerate the development of more projects and more renewable power to power a grid like ERCOT.

Why do you think that bitcoin gets such a bad rap from the climate world?

I think there's a couple of different reasons. I think one is that people argue that bitcoin mining is not creating any real utility because they don't find value in bitcoin. But there are millions of people around the globe or hundreds of millions of people around the globe that do find utility in bitcoin. So, it's tough to make the argument that bitcoin has no value when there's literally a market price today that you can go buy and exchange bitcoin for dollars for.

I just want to make sure I understand. So, today, bitcoin consumes a lot of energy. Is the message that it adds so much value that the energy is worth it? Or is the message more that it does add value, yes, but that there's also a path for that energy or emissions footprint to be reduced over time? If the latter, then what does that look like?

I think it's both. So, I think the sign of a thriving society is the ability to generate and consume energy. You look at the acceleration of human quality of life. Acceleration of the improvement of human quality of life that's happened over the last 150 years, largely in part, is driven by our ability to harness energy and natural resources. The future of that is going to be driven by our ability to harness renewable sources of energy, like create a sustainable way for us to benefit from, you know, the positive impact of being able to generate and, and harness, you know, large-scale energy sources.

Now, what I view, from a bitcoin standpoint, is one, it's to spend on energy is worth it because it creates security for a non-essentially managed, digital monetary asset, which I think is a very useful thing for society at large. And there are hundreds of millions of people around the world that most tend to agree with that. But, secondarily, I think that the incentive system of the bitcoin protocol is such that if we can harness it in the right way, can actually help accelerate more renewable energy development and a faster transition to a more renewably powered grid. And it can also help be a net emissions reducer for the fossil fuel industry.

On the energy side, what are the criteria that are the same if you look at flared natural gas and wind? And are those set criteria that you would look at for any other expansion path of other energy sources you might utilize over time? 

Each power source is inherently different. We have a whole process that we go through. It's like an environmental approval process for any project that we're going to do. And the criteria for that, particularly working with oil and gas companies is, is this a net reduction in emissions compared to what would happen without Crusoe being? And if the answer is yes, we'll do the project. If the answer is no, we're not going to do the project.

And the reason for that is that it can be a slippery slope working with some of these operators and trying to be true to that core ESG mission, you know, that we really have as a business because we've been approached by a number of operators that have stranded gas fields. They have gas balls that they've drilled that gases the product they're trying to monetize. And, you know, they're not monetizing it because maybe they don't like the gas prices, maybe they don't like their cost to connect into the grid, or whatever. But their interest is basically utilizing that gas to mind bitcoin with and monetize it. In that case, in that specific scenario, we would not do that project because that gas, otherwise, would just stay in the ground, which is what we think is probably the best use for it, otherwise.

In the case of flare mitigation, what we're doing is we're identifying sites that would otherwise be flaring, and we bring our technology onsite to be a net reduction in that emissions footprint, which I think is a... It's nuanced but it's really, really important to our longterm mission here as a company. So, that's kind of like the criteria that we look for on the fire gas projects we evaluate. On the renewable side, you know, we've looked at a bunch of different types of projects, and wind is going to be the first of this type. They all kind of have a similar flavor and a similar theme. And it depends on if it's an intermittent source like wind or solar, or if it's a base-load source like, you know, geothermal or hydro, the way in which we kind of work with them can be somewhat different.

In the case of these stranded wind projects, what we're really looking for is either wind assets that have been overbuilt, that lack transmission to kind of get out of a certain zone or a certain region. Or areas that are just overbuilt for a large portion of the time, in which case, like the effective power price that the wind operator's getting, in many different cases, is actually a negative price. They're actually paying to get rid of marginal electrons because there's literally no buyer for them. But there are these moments of peak demand, where we can actually curtail our workload and help them sort of monetize the wind asset, and help the grid be more stable with entirely renewably powered energy. 

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