6. Breakthrough Energy Catalyst Program Overview
Breakthrough Energy Catalyst Program Overview ©2021 Breakthrough Energy, LLC. All rights reserved. Confidential Information – use, reproduction or distribution without written permission is strictly prohibited. BREAKTHROUGH ENERGY OVERVIEW ©2020 Breakthrough Energy, LLC. All rights reserved. 2 Confidential Information – use, reproduction or distribution without written permission is strictly prohibited. BE CATALYST Technologies to Reach Net-Zero Emissions Getting to net zero requires a broad set of technologies and only some of those technologies are ready for cost-effective deployment. Global emissions (100-year GWP) Technologies that could make a difference These technologies typically 51 Direct air capture fall into one of two challenge Other (CH4, Meat substitutes categories: N2O, HFCs) 12 Cow methane reduction Green ammonia Agriculture 1. Implementation 1 Heat pumps Buildings 3 challenge: Scaling cost Building energy efficiency 4 effective solutions, Deforestation Low carbon steel where the key challenge Low carbon cement/alternative building materials Plastic recycling is coordinating and emissions Industry 11 Renewable hydrogen speeding deployment on CO 2 Renewables the global scale. Long duration energy storage Power 12 Bioenergy with carbon capture and storage (BECCs) 2. Innovation challenge: Perovskite solar cells Decreasing cost of new Small modular nuclear reactors climate technologies by Transport 8 Electric vehicles funding early deployment Sustainable aviation fuels to drive technologies 2016 emissions Batteries down their cost curves. Gt CO2e/year ©2021 Breakthrough Energy, LLC. All rights reserved. 3 Confidential Information – use, reproduction or distribution without written permission is strictly prohibited. BE CATALYST Getting the Next Set of Climate Technologies to Scale There is a gap in incentivizing actions to broadly commercialize the next set of climate technologies. We have systems in place to recognize companies and individuals for technologies that are ready to deploy, but no systems to bring the new technologies we’ll need to that point. Two types of actions needed to reach net zero 1. Implementation challenge: 2. Innovation challenge: Insufficient incentives Scaling cost effective climate Decreasing cost of new climate for supporting early technologies technologies commercial techs has led to slow Status There are systems in place that There are insufficient systems in place to scaling of critical incentivize and recognize implementation of give recognition for reducing cost of techs emissions reducing readily available, cost effective solutions. that aren’t yet ready for implementation. technologies. Example Impact If we don’t start systems and quantification recognizing recognition and reporting companies for Insufficient systems and deceasing the cost of new technologies, we Recognition recognition will run out of cost Supporting effective solutions products RECs Offsets and progress to netzero will stall. Example - Energy - Solar - Hydrogen - Long duration technologies efficiency - Electric - Sustainable energy storage - Wind Vehicles aviation fuel - Direct air capture ©2021 Breakthrough Energy, LLC. All rights reserved. Confidential Information – use, reproduction or distribution without written permission is strictly prohibited. BE CATALYST Addressing the Innovation Challenge: The Green Premium The green premium is the difference in price between a fossil technology and its low carbon alternative. It is a metric that can help us measure the progress we’ve made toward addressing climate change and understand where we still have barriers to overcome. Low Green Premium Example High Green Premium Example Electric Vehicles Sustainable Aviation Fuel Electric vehicles are Low carbon fuels, which reaching cost parity with will be required to internal combustion decarbonize aviation, engines. We compared shipping, and heavy duty the total cost of ownership trucking, still have a very of the EV Chevy Bolt to a high green premium. Chevy Malibu. Price Breakdown: The Price Breakdown: The cost per gallon of jet fuel average cost per mile in relative to advanced US cents assuming a 7% biofuels (e.g. HEFA) and cost of capital, 8-year electrofuels (e.g. power to depreciation, 12,000 miles liquid). driven per year. ©2021 Breakthrough Energy, LLC. All rights reserved. Confidential Information – use, reproduction or distribution without written permission is strictly prohibited. BE CATALYST Breakthrough Energy Catalyst The goal of Breakthrough Energy Catalyst is to build projects that help the next set of critical climate technologies reach scale, eventually catalyzing the replacement of fossil-based technology with low carbon alternatives. Key Program Components Impact for Contributors Increasing supply of technologies that enable 01 transitions to low carbon business models Increased production for cost competitive clean technologies will help financiers and large emitters transition to low carbon business models. Creating demand for technologies needed Deploy capital to buy Build coalition and Raise to reach emissions commitments down the green 02 partnerships capital Projects will provide opportunities for corporate premium buyers to procure products that allow them to Assemble the necessary Solicit contributions from Use capital to fund reach their emissions commitments. partnerships to make the philanthropy, government, projects across a set of Recognizing climate leadership project a success (e.g., corporates, and individuals priority technologies and with control point partners enable market penetration 03 A new methodology, the catalyzed emissions in the value chain) reduction framework, will recognize leadership on funding climate technology deployment based on a rigorous calculation methodology. ©2021 Breakthrough Energy, LLC. All rights reserved. 6 Confidential Information – use, reproduction or distribution without written permission is strictly prohibited. BE CATALYST Technology Focus Areas Green hydrogen, SAF, DAC, and LDS have been prioritized as initial focus areas for BE Catalyst. Selected technologies Key selection criteria We have prioritized these three technologies for the BE Sustainable aviation fuel (SAF) Catalyst program because: — The technology can play a critical role in a net zero future, but cost is currently too high. Green Hydrogen — A modest amount of deployment funding can dramatically reduce cost because the technology is at the appropriate stage in the deployment cycle: past Direct Air Capture (DAC) R&D but before major investment has already matured project development. Long Duration Energy Storage (LDS) ©2021 Breakthrough Energy, LLC. All rights reserved. 7 Confidential Information – use, reproduction or distribution without written permission is strictly prohibited. BE CATALYST Key Program Components Contributors will aggregate capital into a pooled fund. Breakthrough Energy will allocate funding to projects with highest potential for impact. Contributing Funds Aggregating Capital Funding Projects Measuring Impact Corporate 8 Green Hydrogen Projects Breakthrough Energy Catalyst Contributors will measure impact in terms of 7 SAF Projects long-term ‘catalyzed emissions Companies will contribute Breakthrough reductions.’ dollars to the program fund, Energy Catalyst which will distribute capital Program Fund 4 Direct Air Capture Projects Contributors will be recognized to projects in priority technology areas. 15 based on the long-term climate LDS Projects impact of their contributions. Example Project: Sustainable Aviation Fuel in the Pacific Northwest SAF green premium in Washington ($/L) $250 - $350M 1.00 for a SAF plant that Governments Individuals Philanthropy 0.53 0.33 produces ~100M 0.14 Other contributors will aggregate funding liters per year to help buy down the green premium. Total Cost Kerosene Federal RFS Green premium ©2021 Breakthrough Energy, LLC. All rights reserved. 8 Confidential Information – use, reproduction or distribution without written permission is strictly prohibited.
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