Business Lift

Advisory in Energy, Innovation and Business

It never ceases to amaze me how many billions are thrown at funding technologies and innovation that, of their nature, cannot succeed. They may be partial solutions, or too expensive, or only representing part of the cost profile, or their true addressable market is much smaller than they present… It is so easy for enthusiastic believers to convince even sophisticated investors that their technology is the future, when it plainly is not.

Two examples suffice, from the energy industry:

  1. About a decade ago $250m was invested in three startups in isothermal CAES. This only addressed half the thermodynamic cycle; their assumptions for the other half were – ahem – heroic. And all their equipment was novel. This totally messed up the investment prospects of adiabatic CAES, which addresses the whole thermodynamic cycle, will really solve the challenges and goes largely un-funded.
  2. Billions are being pumped into fossil fuel generation plus CCS, but the business cases ignore that (a) carbon capture imposes ~40% efficiency penalty on the power station; (b) it operates, erratically, at way below advertised capture rates; (c) the costs of CO2 transportation and sequestration; (d) the health and safety hazards to local communities; and (e) the cost of negative-emissions technologies to compensate for capture rates being below 100%. Instead, the money should go to industrial CCS for hard-to-abate sectors; there is a case for BECCS (bio-energy generation with CCS) but that’s predicated mainly on its negative emissions, and should be sited to piggy-back on the industrial version.

I could have picked examples from many other industries. How much wiser would governments and investors be to employ true experts who understand the industry and technology!