Venture capital is no stranger to climate change or the need to seek energy alternatives that don’t pollute the planet. In just three years from 2019 to 2022, Investment in clean energy initiatives increased sixfold to $12.3 billionAccording to the ‘Clean Energy Initiatives Radar’ study by consultant Oliver Wyman. This contrasts with the negative environment prevailing in the business ecosystem, where the rise in interest rates and the ensuing liquidity constraint caused a 53% drop in overall investment across all sectors. This greater interest is in part responding to the rise in individual ‘mega-investments’, each of which has funded more than $500 million.
According to the report’s authors, the new green proposals are mainly favored by two measures: European regulations that support the energy transition, such as the Inflation Reduction Act (IRA) in the United States and the Zero Industry Act. Derived from the Green Pact’s Industrial Plan. But at the same time, the size of the deals was the deciding factor for venture capital. According to Oliver Wyman, average size of agreements reached multiplied by more than threeIt rose from $17 million in 2019 to $53 million in 2021 and then stabilized in 2022. “Larger deals often reflect the more mature state of funded startups that have already reached the development stage.”
interest in batteries
Within the scope of clean energies, battery technology attracted increasing interest from investors. In 2022, two-thirds of global energy venture capital financing, a total of $5 billion, was invested in batteries. Large-scale decentralized storage technology is vital in the race for energy independence, and this is how the investment world sees it; The investment world has tripled its stake, from $1,000 million in 2021 to $3,000 million in 2022.
Another great beneficiary is hydrogen. Technological solutions for hydrogen production between 2019-2022 increased from approximately $70 million to approximately $550 million. Carbon capture and storage has also gained increasing confidence in recent years, as it is sometimes used to extract carbon from hydrogen produced from natural gas or ammonia to turn gray hydrogen blue. While $600 million came to this technology in 2022, it had an investment of approximately $100 million three years ago.
Europe, second investor in clean energy
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By regions, USA leads investments In energies that will help decarbonize the economy with a total of $7,000 million in 2022. Europe lags far behindWith an investment of $3,500 million. Its contribution fell from the 4,600 million channeled in 2021 as a result of economic pressures from inflation and continued increases in interest rates, according to the report’s authors. 85% of global financing in clean energy is pooled between the two regions.
China is in third place. HE Asian giant raises funding from $300 million to $700 million in three years for his interest in companies working on batteries, renewable energy technology and energy efficiency. In 2022, he increased his bet by more than 71% to $1,200 million as the country turned to renewable energy. Other countries in the region, such as Japan and Australia, also actively participated in the investments of these initiatives, with a total investment of $1.7 billion from the Asia-Pacific region; this was almost 14% of last year’s total.