In an attempt to create what is being described as an “economic revolution,” revolving around clean energy, some of the world’s most recognizable billionaire entrepreneurs have launched a new investment drive for renewable resources.
The Breakthrough Energy Coalition includes Microsoft co-founder Bill Gates, Facebook co-founder and chief executive Mark Zuckerberg, and Virgin Group head Richard Branson. Other investors include Reid Hoffman, founder of LinkedIn, and Amazon founder Jeff Bezos.
“The existing system of basic research, clean energy investment, regulatory frameworks, and subsidies fails to sufficiently mobilize investment in truly transformative energy solutions for the future,” the coalition said in its mission statement. “We can’t wait for the system to change through normal cycles.”
The Breakthrough Energy Coalition, made up of more than 25 investors from 10 countries, was launched in Paris as a part of the U.N. climate talks. The coalition is based on the principle that technology will solve our global energy issues and will be a public-private partnership between governments, research institutions and investors.
The group will mainly invest in early-stage clean energy companies across a range of sectors, such as electricity generation and storage, transportation, and agriculture. The initiative has been announced in conjunction with Mission Innovation—an effort from 21 governments, including Australia, the U.S., the U.K., Germany, China, and Brazil to double the amount of public money going into clean energy innovation.
It’s expected this will bolster governmental assistance in renewables, such as solar and wind energies, to $20 billion.
Earlier this year, Gates announced he would invest $1 billion of his private fortune in clean energy over the next five years. The Microsoft founder has also talked about energy poverty in recent years, suggesting that some of the investment could go to distributed solutions that bring modern energy access to the more than one billion people who live without it.
With off-grid solar solutions having begun to proliferate and become a profitable business, the time is now.
According to Gates, the world will use 50 percent more energy by the middle of this century than it does today; however, this is still problematic because most of this energy will be derived from fossil fuels such as coal and oil.
“The renewable technologies we have today, like wind and solar, hav made a lot of progress and could be one path to a zero-carbon energy future,” said Gates. “But given the scale of the challenge, we need to be exploring many different paths – and that means we also need to invent new approaches. Private companies will ultimately develop these energy breakthroughs, but their work will rely on the kind of basic research that only governments can fund. Both have a role to play.”
Zuckerberg believes the ongoing process toward achieving sustainable energy is too slow, while Branson added: “We must produce an abundance of clean, renewable energy and drive further innovation to make the next generation of energy more efficient. It will benefit the environment, our society, and the economy.”
Meanwhile, Hoffman said efforts to transform energy sources have struggled because they require collaboration between private and public sectors.
“The swords that cut this Gordian knot: breakthrough technologies built and deployed by entrepreneurial companies with global scope,” he said. “Making the right investments in the right innovations now is essential to solving this energy challenge for current and future generations across the planet.”
The group hasn’t yet put a total dollar amount on its level of investment, but acknowledged it will be focusing its resources on government-funded innovation that comes from countries involved in the Mission Innovation initiative.
Global investment in clean energy rose to $270 billion last year, which is the first significant increase after a three-year lull in investment. China led the way with $89 billion in new money for renewables, followed by the U.S. at $51 billion.
The tumbling costs of renewables – solar, for example, has fallen by 70 percent since 2009 – has helped increase installation, although experts have warned that dependency upon fossil fuels will need to be wound back more quickly if the world is to avoid dangerous climate change fueled by greenhouse gases.
According to the Intergovernmental Panel on Climate Change, most of the world’s electricity can – and must – be produced by low-carbon sources by 2050. The panel said that renewables needed to grow from a 30 percent share today to 80 percent of power generation by 2050, with fossil fuel energy without carbon capture and storage technology phased out by 2100.
Executive director of the environmental group the Sierra Club, Michael Brune, said clean energy was already “winning the fight” against fossil fuels.
“Now, these incredible public and private commitments, which are historic, essential, and timely, show that the nations of the world – as well as many of the world’s leading visionaries and philanthropists – are committed to making clean energy even more widespread, even faster,” said Brune.
“What’s now clearer than ever is that our future will be 100 percent clean energy, and that dirty fossil fuels are merely riding out their final wave.”
This article originally appeared in the magazine edition of Business Review USA & Canada.