Breakthrough Energy Catalyst put together a guide for companies to take their technologies from pilot to commercial scale.
Breaking Barriers in Clean Energy
The Challenge:
Innovators have made strides in clean energy, but the real test lies in deploying these technologies on a large scale. Breakthrough Energy Catalyst aims to bridge this gap with capital and expertise.
Their Approach:
Breakthrough Energy Catalyst provides over $1 billion in flexible funding and partners with the EU to support projects. Beyond financial support, they offer critical operational assistance to help companies scale effectively.
The Capital Gap:
Early deployment projects struggle to access large, cheap capital, as infrastructure investors prefer de-risked technologies with predictable cashflows. Catalyst seeks to fill this funding gap.
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Catalyst’s 12 Keys to Scaling Up:
- Commit to a First-of-a-Kind (FOAK) Project:
The journey begins with a commitment to a FOAK project, moving from pilot to demonstration to FOAK, each step providing crucial learning and de-risking the technology for investors. - Prove Before Licensing:
Startups should focus on proving their technology at the DEMO and FOAK levels before considering licensing, ensuring they retain control and expertise. - Lock-Up Project Design:
Establishing design parameters for DEMO and FOAK facilities early on is essential for project development, providing visibility on costs and schedules. - Design for Modularity:
Scaling through modular units (e.g., multiple smaller units rather than one large unit) reduces capital intensity and risk. - Build a DEMO:
Construct an end-to-end DEMO as soon as possible after the pilot to refine project delivery and build company know-how, unlocking further funding. - Sharpen Capex Cost-Down Strategy:
Have third parties verify cost estimates to ensure they are realistic and credible, avoiding overly optimistic projections that could undermine investor confidence. - Build-Out Project Execution Team:
Establish a dedicated project management team early to deliver DEMO and FOAK facilities, separate from the technology development team. - Price Offtakes Flexibly for FOAK:
Structure offtake agreements to secure financing and accommodate potential capex cost increases, ensuring project viability. - Control Your Own Destiny:
Develop the FOAK project independently to maintain governance and oversight, proving the technology’s viability. - Accelerate FOAK Project Development:
Begin FOAK development in parallel with DEMO execution to speed up commercialization, identifying long-duration activities early. - Finalize the Puzzle Pieces:
Ensure key commercial contracts are in place before approaching funding partners, aligning all project elements to support required returns. - Raise the Capital:
Once the FOAK project is de-risked, line up capital sources and begin the next series of fundraising, ensuring a well-structured project to attract investors.
These keys, based on real-life project analyses, provide a roadmap for scaling clean energy technologies and unlocking cheaper funding sources to build a clean economy faster.
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