Pitchbook’s Q2 2024 Clean Energy Report highlights key trends, investments, and innovations within the clean energy sector, focusing on venture capital (VC) activity, emerging technologies, and notable company developments. As the clean energy landscape evolves, VC investment plays a critical role in shaping the industry’s future, especially in areas such as grid infrastructure, renewable energy, and alternative energy storage.
Key Findings
- VC Deal Activity: Despite a slight dip in total deal value, the clean energy sector saw consistent investment, with $8.7 billion raised across 459 deals in the first half of 2024. This puts 2024 on pace to potentially fall short of 2023’s $18 billion in deal value.
- Sector Highlights: Grid infrastructure attracted the most VC funding in Q2, securing $2.6 billion, accounting for 60.1% of all clean energy funding. Battery energy storage led the way within grid infrastructure, surpassing solar photovoltaics in VC deal value.
- M&A Trends: Post-2022, M&A activity in clean energy has significantly declined. However, with $1.9 billion in deals in H1 2024, the sector is on track to exceed 2023’s total of $2.6 billion.
Notable Deals and Innovations
- Nexamp: A renewable energy developer, Nexamp raised $520 million in Series E1 funding to expedite its project pipeline and expand into new markets.
- Proxima Fusion: The European nuclear fusion tech developer raised $21.7 million in the largest seed funding round of Q2 2024, fueling team growth and partnerships.
- EnerVenue: This metal-hydrogen battery developer secured $308.2 million in Series B funding, with plans to build a large factory in Kentucky to scale its energy storage solutions.
- Highview Power: Known for its liquid air energy storage technology, Highview Power raised $381.9 million to develop commercial-scale storage facilities. The company operates two pilot facilities in the UK and is expanding internationally.
Change the World - Subscribe Now
Sector Performance
- Grid Infrastructure: Dominated the funding landscape, driven by advancements in battery energy storage. The category attracted $2.3 billion in VC deals.
- Renewable Energy: Intermittent renewable energy sources such as solar and wind continued to see robust investment, with solar photovoltaic technologies raising $1.1 billion.
- Alternative Energy Storage: Innovations in non-battery storage technologies also saw significant funding, particularly in liquid air and metal-hydrogen storage solutions.
Related Article: Treasury and IRS Finalize Rules to Boost Clean Energy Jobs and Workforce
Policy and Regulatory Shifts
Key policy developments in Q2 2024 had significant implications for the clean energy sector:
- US Department of Energy: Revised its environmental review rules to streamline regulatory processes for energy storage, transmission, and solar projects.
- Nuclear Fuel Supply Chain: The US Department of Energy announced $2.7 billion in funding to bolster domestic nuclear fuel supply chains, enhancing energy security and supporting fission technologies.
VC Investor Insights
Top VC investors in the clean energy space in H1 2024 included:
- Energy Impact Partners: Leading with eight deals.
- Climate Capital: Securing seven deals.
- Lowercarbon Capital: Participating in six deals.
Additionally, 18 other investors made three to five deals each, signaling a diverse and active investor landscape.
Company Spotlight: Highview Power
Founded in 2002, Highview Power develops long-duration energy storage technology based on air liquefaction and regasification. Its innovative system stores compressed air in cryogenic form, which is later regasified to drive turbines and generate electricity. The company operates a demonstration facility in Manchester, UK, and is expanding its operations globally, with major projects planned in Scotland, Northeast England, Australia, and Japan.
In June 2024, Highview Power raised $381.9 million in later-stage VC funding, led by the UK Infrastructure Bank and Centrica. This funding will support the construction of a new 50 MW/300 MWh facility in Manchester, helping the company scale its operations and solidify its position in the energy storage market.
Looking Ahead
The clean energy sector remains a dynamic and rapidly evolving space. As regulatory frameworks and investor preferences continue to shift towards sustainability, the focus on grid infrastructure and energy storage will likely intensify. Emerging technologies like nuclear fusion, non-battery storage, and clean fuels are poised to play pivotal roles in shaping the energy landscape of the future. With continued VC investment and innovation, the clean energy market is well-positioned for growth, albeit with some potential short-term volatility.
This Q2 2024 Clean Energy Report provides a snapshot of where the industry stands today and highlights the key players, trends, and innovations that will drive the sector forward into the second half of the year and beyond.
