Investing to Mitigate the Unintended Consequences of Renewable Energy

June 23, 2025
Blog

The book, “Material World,” written by Ed Conway and published in 2023 by Knopf, discusses the six raw materials that shape modern civilization.

Reading the book got me to wonder if there are climate tech investment opportunities that address the unintended consequences of the transition to renewable energy.

To slow down global warming, it is imperative that we transition from petroleum-sourced energy to renewable energy. But what are the down sides of that transition and do they create investment opportunities?

An illustration.

According to Ed Conway, “Between 1900 and today,  the quantity of stone one needed to move and process to produce a single ton of copper rose from 50 tons to 800 tons.”  [Due to the depletion of ore which is richer in copper]. “The flip side of getting ever more effective at mining even poorer copper ores is that we displace even more mass of the planet. ….  Between 2004 and 2016 Chilean miners increased annual copper production by 2.6% , yet the amount of ore they had to dig out of the ground to produce this marginal increase in refining rose by 75%.”

The renewable energy transition requires lots of copper. Quoting Mr. Conway again, “Between 2020 and 2050, the share of our primary power coming from electricity is forecast to rise from about 20% to 50%. All of a sudden copper becomes the backbone of well everything. …   A battery powered bus will require nearly half a ton of copper as motors and circuitry and large slabs busbars as they’re called, capable of carrying even more current than conventional wires. ….  Solar needs roughly 7 times as much copper as conventional power stations while the offshore wind needs needing about 10 times as much copper to generate the same amount of power. …..  The real question is how much more of this blasting and digging of ore will people tolerate.”

The photo shows an open-pit copper mine in Chile.

The Semilla Climate Capital Fund is interested in finding and learning about under recognized and underfunded  investment opportunities that mitigate the unintended consequences of the shift to renewable energy.

Lessons for Investors from the massive Spain power blackout

May 6, 2025
Blog

What does the massive Spain power black-out suggest about needed climate-tech solutions?

Reports have explained the blackout this way:

Spain has long had the goal of achieving net-zero carbon emissions. In 2011, Spain’s renewable energy fueled 31% of its electricity, according to Statista data. The share grew to 57% last year, meaning a significant drop in the combined use of fossil and nuclear fuels.

On April 16th, for the first time, Spain achieved the net-zero goal across the entire grid.

But the massive increase in low-cost wind and solar generation sent power prices tumbling. On Jan. 20, electricity in Spain’s spot market cost $165 per megawatt hour, according to Trading Economics data. That fell to $12 by March 21. Those falling prices meant Spain’s nuclear power plants temporarily stopped operating, and natural gas plants cut back on generating electricity. The result is an inability of the grid to quickly add generating capacity when the renewable generators provide insufficient output. Hence, blackouts.

If this explanation is correct, what opportunities exist for climate tech startups and their investors?

Energy storage! For example, by investing in companies creating vanadium redox flow batteries, iron-air batteries, and other next-gen storage solutions.

But these technologies are hard tech. Hard tech requires significant capital and time to reach broad deployment. And it can be difficult for investors to pick the winners and losers. For example, university researchers frequently claim battery chemistry breakthroughs. Which breakthroughs will find commercial success?

  • To manage these challenges, investors need to stick to the basics:
    Is the technology proven and protectable?
    Is there a practical and cost-effective go-to-market approach?
    Does the technology provide a near-term ROI for its users?
    Can the startup be successful assuming a reasonable total capital raise?

Climate Tech Investing – 2025 Edition

April 30, 2025
Blog

Climate Change demands Solutions.

It is critical that new climate tech solutions be developed and deployed. The difference between the previous and current administrations’ approaches to protecting the environment is estimated to be an added 4 billion tons of CO2 emissions by the US by 2030, which equates to the combined annual emissions of the EU and Japan. This is a significant chunk of the remaining carbon budget that the earth has — making achieving 1.5 degrees even more unlikely.

Climate Tech startups face significant challenges in the current environment:

  • Launching products during a time of high uncertainty
  • Securing revenue from developers of mega climate projects, including those that advance green hydrogen and direct air capture.
  • Securing investments if their business plans are based, at least in part, on federal funding.

That said, Climate Tech startups have significant opportunities in the current environment:

  • Providing solutions, such as solar power and batteries, that outperform fossil fuel technologies on unit economics. Note that fossil fuel state Texas is a leader in renewable energy.
  • Providing point solutions that result in near-term positive ROI for the owners of utilities, industrial facilities and commercial buildings
  • Enabling AI data centers to operate with less energy.

Announcing an Investment in Helix Earth

June 2, 2024
News

Semilla Climate Capital is pleased to announce an investment in Helix Earth.

Employing technology developed by NASA,  Helix Earth systems save up to 50% energy required by air conditioning systems worldwide. In a few hours, a Helix system can be effortlessly connected to existing AC rooftop unit or dedicated outdoor air system. The Helix unit pre-dehumidifies supply air, substantially dropping the load on the existing unit and lowering power needs by 50%. There is no need to replace existing AC units. There is no need for heavy lifting cranes during installation. There is no need for additional structural support on rooftops. And the Helix system is serviceable in minutes on the same schedule as normal AC maintenance.

Announcing an Investment in Nabaco

February 1, 2024
News

Semilla Climate Capital is pleased to announce an investment in Nabaco.

Food waste contributes to 8% of greenhouses gases. Nabaco reduces the greenhouse gas load associated with fresh fruits and vegetables, which in turn helps to address food scarcity and helps to provide greater access to fresh fruits and vegetables. Their organic, all-natural, post-harvest processing solutions improve yields and storage quality of fresh foods, safeguarding environmental sustainability.

The Pros and Cons of investing in carbon-credit related startup companies

January 26, 2024
, , Blog

Carbon credits are part of the overall solution for reducing CO2 in the atmosphere and have attracted significant interest from investors and companies.

When considering investing in a carbon-credit related  startup company, it may be helpful to consider the following Pros and Cons.

Pros

  • The world must find ways to slow global warming.
  • Startups developing carbon reduction products may find that their customers can benefit by selling credits generated when using the company’s products. This may incrementally lower the sales friction encountered by the startup.
  • A startup can directly deploy carbon reduction technology and benefit from selling credits. For example, the startup can own and operate wind or solar power generation facilities or can own and operate systems that capture and utilize the methane gas that is emitted from waste disposal sites, coal mines, or livestock farms.

Cons

  • Thinking big picture, carbon credits are an indirect approach to reducing carbon entering the atmosphere, and most often don’t reduce CO2 at the source, where the CO2 is most concentrated.  And  the purchasing of carbon credits allows buyers to avoid reducing or eliminating their own emissions and may be motivated more by a need for greenwashing marketing campaigns than a financial commitment  to slowing global warming.
  • If the company’s primary mission is to sell carbon credits, consider that carbon credits are unregulated and vary widely in quality and impact. There is no standard way to measure, verify, and certify the emissions reductions or removals that carbon credits represent. Some carbon credits may be based on dubious or fraudulent projects that do not actually reduce or remove greenhouse gases from the atmosphere.
  • Carbon credit marketplace startups face the same challenge that every marketplace startup faces, namely, achieving a balance of supply and demand, and having to be equally successful with two disparate marketing campaigns.
  • A carbon credit selling startup may be creating credits planting monocultures of trees, which are inherently damaging to the environment by decreasing biodiversity has negative impacts on soil quality, water availability, and wildlife habitat, thereby reducing the resilience and adaptability of forests to climate change and natural disasters. Insect and bird populations around the world are plummeting precipitously in part due to the destruction of the biodiverse habitats that they depend upon. Read more

The Mensarius Oath of Ethical Investing

May 19, 2023
News

The Fund General Partners Juan Thurman and Bob Bridge, have taken the Mensarius Oath.

As a financial professional that invests in enterprises using personal or investor capital, I hereby pledge to honor these values. If it is determined by myself or a panel of my peers that I have violated these values without reconciliation agreed between all involved parties, then I will voluntarily leave the industry.

  • With my dealings, I create positive outcomes financially and otherwise for all of those involved, including the conscious avoidance of harm to any parties.
  • In my profession of finance, I endeavor to help create positive outcomes for all of humanity.
  • Being in the industry, I will help others to achieve the highest standards that I set for myself and my organization.
  • As a steward of the trade, I work against any abuse of power that leads to unfair advantage, seduction, corruption or mistreatment.
  • As a person who can affect the outcome, I commit to reducing inequality and increasing fairness in society.
  • In honor of the community, I pledge to treat all that approach me with fairness, equality and the attention that each opportunity deserves.
  • As part of my work, I keep all matters that are understood to be private with all available protections to keep safe from public or other unwanted disclosure.
  • As a professional, I am open and honest in all of my dealings with those that I serve, including Investors and Founders.

Announcing an investment in ClearFlame Engine Technologies

March 9, 2023
News

The Semilla Climate Capital is pleased to announce an investment in ClearFlame Engine Technologies, part of a larger raise of $30M in Series B funding for the company.

The latest investments were led by Mercuria Energy Group, one of the world’s largest privately held energy and commodities companies, with Mercuria and Breakthrough Energy Ventures both making second investments. New investors, including mining corporation Rio Tinto, and WIND Ventures, the strategic venture arm of Copec, one of Latin America’s leading mobility and energy companies, see ClearFlame as part of a holistic suite of strategies to advance environmental, social and governance (ESG) goals.

ClearFlame Engine Technologies significantly reduces GHG emissions for long-haul trucking, agriculture, power generation, and other sectors by transforming heavy-duty engines to run more cost-effectively and cleaner on 100% renewable, plant-based fuels.

GP Juan Thurman in the news.

December 2, 2022
Blog

The investment tracking platform SERAF featured Juan Thurman in the seventh in a series of interviews highlighting the work of interesting impact investors. Juan Thurman is a General Partner of the Semilla Climate Capital.

SERAF asked, “Looking ahead in early stage impact investing, what are you most excited about? What keeps you up at night?”

Juan replied, “When we started engaging with investors in 2016 they assumed impact investing was concessionary. Fortunately, investors have become more educated and now know you can make market or better returns investing in impact startups. The thing I am most excited about is working with early stage founders, helping them get traction and seeing them deliver impact in their chosen markets. Missing out on good deals is what keeps me up at night.”

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