The Urgency of this Moment.

Reflections from CERA Week 2024 from Michael Kearney

I had the opportunity to attend CERA Week 2024 along with my Engine Ventures colleagues Katie Rae, Colleen Calhoun, and Lisa Hansmann. Returning home, the urgency of this particular moment in the energy transition could not be more apparent.

We are clearly at a pivotal moment in time that will dictate our ability to meet our climate goals and build a clean energy economy. We have made enormous progress in the United States with the IRA and Infrastructure bills bringing clarity to new, large market opportunities and across the world with COP 28 fortifying new coalitions of stakeholders toward large clean energy opportunities. Overlaid on top of that is the reality that energy demand, particularly in electricity, is increasing for the first time in decades, due to coincident loads from the electrification of transportation and other industrial processing and the rapid expansion of data center demands to support continued improvement in AI development. But, the challenge remains that if we are going to meet this expanding demand for clean energy, we need to scale clean technologies faster than we have ever scaled technology in this sector. Today we are falling short of the pace needed.

If we don’t find a way to move faster, those growing energy loads will be met with fossil resources, and our best chance at mitigating the worst of climate change and building a robust clean energy industry will be lost.

However, returning home, I remain optimistic about our ability to meet this moment, primarily because of the wealth of talented individuals across critical stakeholder groups that are mobilizing against this challenge. Evident in conversations in and around the conference are a few recurring themes:

1. Urgency: The explosive demand increase from the hyperscalers presents both a challenge and an opportunity. On the one hand, the demand growth requires the deployment of technology today when many clean energy solutions are not yet scaled. However, for the first meaningful time, critical players in the energy transition have both higher risk tolerance and a desire to move very quickly.
2. Partnerships: At the core of progress to date, is partnership/collaboration: between investors, corporates, startups, and government. Undoubtedly, more of this is necessary for us to get where we want to go with pace — the capital needed to finance firms across their deployment journey, corporate balance sheets to provide know-how and potentially offtake for early projects, and government support to shape markets all have to come together simultaneously. The elements are in place today, but those networks still do not have enough connectivity. Continued development of partnership networks remains critical.
3. Cultural change: Finally, more important than ever is the role of courage and culture. As we talk about the energy transition, we have to recognize that a fundamental element of any transition is change. Change requires courage and the foresight to recognize necessary organizational culture shifts. Specifically,

• Startups need to build extensive team competence in operations, project delivery, and risk management
• Investors must grapple with the time it takes to build things that matter;
• Utilities and corporates must find comfort in relinquishing business-as-usual standard operating procedures and processes that are ill-suited for an industry in transition
• Regulators have to support organizations working creatively to experiment in an industry short on experimentation.

Frankly, none of these are comfortable. All are necessary. Importantly, our collective ability to meet this moment requires that we re-orient the way we, diverse stakeholders, engage with each other to find new ways of working together on these issues.

Coming home from Houston, I’ll be challenging myself to find ways to both orient our firm’s culture internally around deployment and scale and, more importantly, to orient the way we engage with stakeholders externally around this, too. The collaboration between investors, corporations, startups, and government is essential for accelerating the deployment of clean energy solutions and achieving our climate goals. Engine Ventures is committed to continuing to develop those partnerships and convene crucial conversations across the ecosystem that will bridge us to a cleaner and more sustainable world for future generations. We count on you to join us on this critical journey and look forward to collaborating with you toward our shared mission.

— Michael Kearney, General Partner @ Engine Ventures