ImpactAlpha, October 15 – Boston-based venture capital firm Clean Energy Ventures has been investing in new clean energy technologies for nearly 15 years. A few other investors have cropped up in that time, but there’s still too little money investing in new innovation, says Clean Energy Ventures’ co-founder Dan Goldman.
“More wind and solar capacity alone won’t address climate change. We need new technologies,” he tells ImpactAlpha.
Clean Energy Ventures has closed its first fund to scale up its investment capabilities and help de-risk and build the clean energy pipeline for later-stage investors. The fund is looking to back 20 to 25 companies in the next five years, using capital committed from financial advisors, large family offices, oil and gas companies, utilities and consumer goods firms. It’s targeting companies that can displace 100 million tons of CO2 emissions per year once they reach scale.
Clean Energy Ventures’ fund has already made seven investments, including SparkMeter, a metering and pay-as-you-go platform for mini-grid operators in emerging markets, and LineVision, whose technology helps utilities assess and optimize transmission line performance, which will better enable integration of renewable energy sources into the grid.
For impact, Goldman says the firm tracks portfolio companies’ greenhouse gas emission offsets. But given the early nature of the companies Clean Energy Ventures invests in, that will largely be estimated rather than actual impact.
“We ask the company to develop a framework for how they think about GHG emissions reduction—if your business grows as you expect it will, what would it look like in terms of mitigating emissions?” he explains.
Goldman adds that Clean Energy Ventures’ has developed a process over the years for assessing new technologies’ impact potential, having backed more than 25 early-stage ventures. But the firm wants to see more standardization and transparency in the field, however, and is collaborating on the development of an industry-wide impact assessment tool, called CRANE, which stands for Carbon Reduction Assessment of New Enterprises.