NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, December 23, 2016

Last week, Bill Gates, the co-founder of Microsoft and co-chair of the Bill & Melinda Gates Foundation, announced Breakthrough Energy Ventures, a $1 billion fund that will invest in clean energy innovation.

The investor-led fund is made up of members of the Breakthrough Energy Coalition, a group of investors working with countries that are increasing the size of their government research pipelines. Gates chairs the fund, and directors include Jack Ma, the China-based founder of Alibaba, and Vinod Khosla, the Silicon Valley-based founder of Khosla Ventures.

With 20 investors who have a high tolerance for risk, a combined net worth of $170 billion, and plans to work on a 20-year timeline, Breakthrough Energy Ventures may be in a position to invest in the commercialization of technologies in areas that might not be suited for traditional venture capital. This is one of a range of new funds to tackle climate change, and while most say it could fill gaps in climate change investment, others worry that by seeking out new energy technologies the investors might overlook the breakthroughs that exist today.

“The big questions are: How do you decarbonize while continuing our economic growth, how do you adapt to climate change, and how do you bring affordable modern electricity to several billion people who do not have access to energy today?” said Dr. Arun Majumdar, a Stanford University professor and energy expert who is advising Breakthrough Energy Ventures. “The goal of Breakthrough Energy Ventures is to really fundamentally change the direction of the global energy system in a way that will continue economic growth and save the planet.”