Every September, New York City is abuzz as thousands of people across the public and private sector flock to the city for the nearly 900+ events that take place during Climate Week and the UN General Assembly to discuss, deliberate and debate how to reach net zero targets. This year, Yash Kaman, Managing Director at Kerogen | CelerateX, participated in many of the week’s events focused on the role private capital plays in unlocking climate solutions. Yash distils his key themes and takeaways below.
1. We must be practical about delivering the transition today
The conversation this year shifted from big, ambitious climate targets toward more realistic steps we can take today to reduce our emissions now. We can no longer afford to focus exclusively on a distant net zero future or solutions that may or may not come online in the next decade. We must instead focus on practical steps to ensure large climate and energy projects are finished on time and within budget now.
While new technologies remained a topic of discussion, there was greater attention on solutions that are ready, or almost ready, to be put to work. This is a sentiment we share at Kerogen | CelerateX, and our focus remains on investing growth capital into technologies already proven at commercial scale. For example, one of our priority investment thematic is sustainable aviation fuel (SAF), a commercially proven solution to decarbonise the aviation industry now. Our portfolio company, EcoCeres Inc., is currently one of the leading SAF producers globally and has been playing a vital role in decarbonising this hard-to-abate industry since 2022.
While no technology is perfect, we cannot let perfect be the enemy of the good. We must scale current solutions while developing future technologies that could come online in the next decade.
2. Partnerships will unlock action
While governments will be critical in supporting the transition, the private sector often leads the charge in scaling and implementing new technologies. One of the most exciting developments unveiled during Climate Week was the Climate Group’s 24/7 Carbon-Free Coalition. This initiative represents a major commitment from some of the world’s largest companies to revolutionise electricity procurement and reduce carbon emissions. Likewise, stakeholders across the public and private sector must work together to help streamline and accelerate permitting and planning processes to bring transition projects online quicker. The Hydro-Quebec transmission line project is a great example of how collaboration between government, industry, private capital and communities can overcome long regulatory processes.
3. Modern, low-carbon electricity grids will be the backbone of the energy transition
Throughout the week, I heard climate experts across various disciplines discuss one of the most important aspects of the energy transition: our electricity grids. As AI drives a surge in new data centers, rising demand for electricity is challenging our aging power infrastructure. This strain on the grid will be compounded further as new technologies like electric vehicles are adopted at scale.
Ensuring low-carbon, reliable and resilient electricity supply will be a near-term priority for communities around the world. To support these efforts, conversations at Climate Week were bullish about the role of batteries in supporting distributed generation and grid balancing for the future of the grid and electricity supply. While batteries are a critical part of the solution, there was also a clear consensus that new technologies must still be developed to keep pace with modern demand.
While the grid is evolving to become smarter in managing loads and distributed energy sources, there is still substantial work ahead to increase resiliency and responsiveness to fluctuations in demand and supply. At Kerogen | CelerateX, we are focused on scaling up green sources of baseload power, such as geothermal, which will play an important part in shoring up reliable renewable electricity supply for homes and businesses. Our European geothermal platform aims to capitalise on the region’s rich geothermal natural resources to drive the decarbonisation of heat.
4. Nuclear energy sees renewed optimism
Nuclear energy was front and center at Climate Week. The Nuclear Symposium 2024 welcomed developers, investors, off-takers and other stakeholders – all reflecting a renewed hope for nuclear energy as a reliable source of carbon-free power.
Recent positive announcements, like Microsoft’s decision to buy all the output from the recommissioned Three Mile Island project, have reinvigorated the industry.
However, rebuilding the nuclear supply chain will require a focus on domestic value chains in politically stable and reliable regions. There remain investment opportunities to develop and build local nuclear supply chains in suitable jurisdictions. Nuclear SMR technology, which is easier to scale and quicker to build than traditional nuclear projects, offers one such opportunity.