🌎 Google’s new tariff for clean firm power #201

Happy Monday!

Hope you’re staying cool in this heat wave. Google is turning up a different kind of heat by introducing a Clean Transition Tariff, a new type of energy rate structure in Nevada that would allow corporates to pay extra for clean firm power — a potential game changer for getting next-gen technologies like advanced geothermal, nuclear, and LDES on the grid.

In other news, Europe’s new tariffs for Chinese EVs; Musk’s big payday; and Solugen gets the “Tesla loan.”

In deals, a $5bn emerging markets climate fund; $382m for liquid air energy storage; and $136m for EV charging.

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A new tariff structure for clean firm power

First came FiTs, then RECs, then PPAs, and now – the CTT.

Now that the AI race is in full swing, the rally for clean, firm power has begun. Tech companies like Google, who have long been pushing the envelope on net zero, are now taking “power” back into their own hands with a new power procurement structure, the Clean Transition Tariff (CTT).

Last week, Google introduced this first-of-its-kind model, the CTT, to bring new clean, firm power online, where it would otherwise be too expensive for a utility to add to its energy mix. In other words, the CTT lets corporate giants with deep pockets opt to pay a higher rate for much-needed clean, firm power without putting the burden on the everyday ratepayer.

So how does it work?

Fervo's project red geothermal drilling — *Fervo Energy’s commercial pilot project, Project Red, in northern Nevada (source:* *Fervo Energy*)

Google’s CTT model, proposed as part of its partnership with the utility NV Energy (NVE), aims to bring geothermal developer Fervo Energy’s 115 MW of enhanced geothermal power onto the grid to power two of its Nevada data centers. But it’s not just for Google and Fervo:

The CTT would be a rate option available to any customer with a monthly energy demand above 5MW. It would allow these customers to pay for the costs associated with bringing clean firm capacity onto the grid.
“This means that NVE is able to sign a PPA for a technology that they would not otherwise sign due to its relative cost,” Briana Kobor, Google’s head of energy market innovation, told us. “By sending the right price signal to the customer, the CTT unlocks investment in projects that can provide clean firm power.”
With the CTT, participating customers can access credits against the full power value (energy and capacity) in a bundled rate — incentivizing participating customers to invest in clean capacity resources and helping them achieve their clean energy mandates.
“The power developer, the tech company, and the utility work together from the start, as opposed to Fervo and Google just negotiating unilaterally and then trying to force the hand of the state utility to make sure there’s enough grid infrastructure to bring that load online,” said Gabe Malek, chief of staff at Fervo Energy.

Why this matters

AI means go-time for clean, firm power. The launch of the CTT comes at a critical time when data center electricity usage is set to double by 2026. Data centers are notoriously power hungry, and need to run at essentially 100% uptime. But Big Tech companies have decarbonization targets (for instance, Google set a goal to run on 24/7 carbon-free energy on every grid it operates, which means matching its electricity demand with clean energy generation where and when its electricity consumption occurs). So they need access to high-capacity factor power sources that are clean and reliable — like advanced nuclear, geothermal, or renewables paired with long-duration energy storage (LDES).
Getting paid for the big leagues. But until the CTT, emerging climate tech like advanced nuclear and geothermal have been too expensive to leave the bench, whereas cheap(er) wind and solar typically get favored for first-round picks by utilities as they’re generally easier to get approved by public utility commissions (PUCs) looking out for ratepayers. In PUC testimony to the Nevada PUC, NV Energy indicated that “without the Google CTT ESA, the enhanced geothermal resource would not have been brought under the current integrated resource plan due to concerns over cost.” Now, the CTT can pave the way for commercial customers willing to pay a premium for clean, firm power.
Next-gen projects like Fervo’s can swing for the bleachers. Last year, Google and Fervo announced that their 3.5MW pilot project went online, supporting Google’s data centers via a PPA. As Gabe told us, Fervo signed a development agreement with Google for Project Red, a structure similar to the CTT — in which Fervo sold the brine it produced from the project to a local power plant that generated electricity, which then sold the power to NVE. Google paid NVE for power, and Fervo a development fee. This setup enabled Google to count the electricity towards its carbon-free energy commitment via additionality requirements. (Fervo aims to own power generation in its next projects.) This could be replicated under the CTT.
Breaking the chicken-and-egg cycle. If approved in Nevada, the CTT could jumpstart the deployment of new clean energy technologies and solve the chicken-and-egg problem of high costs. Similar to Europe's feed-in tariffs (FiTs) or contracts-for-difference (CfDs), which boosted solar and wind by having governments pay higher PPA rates for new technologies, the CTT now has private companies stepping up to the plate, for the long run.
And it’s not just Nevada. In May, Duke Energy joined Amazon, Google, Microsoft, and Nucor to accelerate emerging clean energy technologies through Accelerating Clean Energy (ACE) tariffs which also include a CTT – allowing Duke to provide individualized portfolios of new carbon-free energy like advanced nuclear, geothermal, or LDES to C&I customers. While the CTT is still awaiting approval in the Silver State, if all goes well in Nevada, look out for CTTs in your local power market, especially in regions expecting data center growth (PJM, ERCOT, we see you).
- “It’s a new paradigm in big tech companies’ power purchasing strategies, because they're all competing to scale AI,” said Gabe. “We're entering a golden era of clean firm power development, and that should present more opportunities for not just Fervo, but for other providers of clean firm power and other geographies to replicate the CTT.”

Special thanks to Briana Kobor and Gabe Malek for contributing to this piece.

Deals of the Week (6/10 - 6/16)

Late-Stage / Growth

⚡ FLO, a Québec, Canada-based EV charging network operator, raised $136m in Growth funding from Export Development Canada, Business Development Bank of Canada, Caisse de Depot et Placement du Quebec, Energy Impact Partners, Investissement Quebec, and MBK Partners.

⚡ Battery Smart, a New Delhi, India-based battery swapping network platform, raised $65m in Series B funding from LeapFrog Investments, Blume Ventures, British International Investment, Ecosystem Integrity Fund, MUFG Bank, and Panasonic.

🔋 Echion Technologies, a Cambridge, England-based fast charging battery anode materials developer, raised $31m in Series B funding from BGF, CBMM, Cambridge Enterprise, and Volta Energy Technologies.

⚡ Gorilla, an Antwerpen, Belgium-based utility data management platform, raised $27m in Series B funding from Headline, Beringea, and PMV.

🏠 Parity, a Toronto, Canada-based HVAC operations management platform, raised $19m in Series B funding from Idealist Capital.

Early-Stage

☀️ Swift Solar, a San Carlos, CA-based solar perovskite cell maker, raised $27m in Series A funding from Eni Next, Fontinalis Partners, BlueScopeX, Climate Capital, Good Growth Capital, HL Ventures, Stanford University, and Toba Capital.

⚡ ElectronX, a Chicago, IL-based electricity market exchange, raised $15m in Seed funding from Amplo, BoxGroup, DCVC, Innovation Endeavors, and Lightning Capital.

🔋 UNIGRID Battery, a San Diego, CA-based sodium-ion battery maker, raised $12m in Series A funding from Foothill Ventures, Ritz Venture Capital, Transition Venture Capital, and Union Square Ventures.

⚒️ Aepnus Technology, an Oakland, CA-based electrified chemicals manufacturer, raised $8m in Seed funding from Clean Energy Ventures, Impact Science Ventures, Lowercarbon Capital, MUUS Climate Partners, Nextfab, and Voyager Ventures.

🏠 Rendesco, a Royal Leamington Spa, England-based ground-source heat pumps maker, raised $7.7m in Seed funding from Aviva Ventures, Clean Growth Fund, Copley Point Capital, and Eurazeo.

🐄 Beta Bugs, an Edinburgh, Scotland-based maker of insect protein for animal feed, raised $2.2m Pre-Seed funding from the TRICAPITAL Syndicate LLP, SIS Ventures, Scottish Enterprise, Beeches Group, Climate.vc, and InnovateUK.

⚡ Mirico, a Didcot, England-based maker of laser-based methane gas sensing tools, raised $2m in Seed funding from New Climate Ventures and Shell Ventures.

🚗 Torev Motors, a Washington D.C.-based axial flux electric motors maker, raised Pre-Seed funding from BetterWay, Climate Avengers, EcoSphere Ventures, and Intbox Ventures.

Other

🔋 Highview Power, a London, England-based liquid air energy storage developer, raised $382m in Debt funding from Centrica, Goldman Sachs, KIRKBI, Mosaic, Rio Tinto, and UK Infrastructure Bank.

🧪 Solugen, a Houston, TX-based bio-based chemicals developer, secured a $214m loan guarantee from the U.S. Department of Energy (DOE) Loan Programs Office (LPO).

⚡ Zapmap, a Bristol, England-based electric vehicle network mapping platform, raised $2.2m in Convertible note funding from Good Energy.

New Funds

Brookfield Asset Management, a Toronto, Canada-based investment firm, announced the launch of a $5bn emerging markets climate fund with a $1bn anchor commitment from ALTÉRRA.

Can’t get enough deals? See full listings and deal analytics on Sightline Climate

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In the News

It’s tariff season! The European Union announced additional tariffs of up to 38% on Chinese EVs, just a week after US president Biden announced tariffs of 100%. The decision reflects the growing concern in the EU and US about the influx of subsidized Chinese green tech products into global markets, as Chinese EVs made up roughly a fifth of European EV sales last year.

Meanwhile, Tesla CEO Elon Musk got his money and his move approved, as Tesla shareholders voted to reinstate Musk’s $45bn pay package. While initially rejected by a Delaware judge, where the company is located (until it soon moves to Texas), the all-stock compensation remains entangled in legal proceedings and is unlikely to be resolved soon.

Biochemical maker Solugen received a conditional commitment for a $214m loan from the DOE to construct a new Bioforge in Minnesota — the single largest US government investment in bioindustrial manufacturing to date. This FOAK commercial facility will produce eco-friendly chemicals from corn sugar for concrete production, industrial and wastewater treatments, and household detergents.

Formerly well-renowned companies SCiFi Foods and Running Tide ceased operations this week. Reflecting broader challenges in the cultivated meat industry, SCiFi Foods faced difficulties fundraising despite having previously raised $40m from investors. Meanwhile, pioneering carbon removal startup, Running Tide, grappled with a contracting voluntary carbon market despite having raised $50m.

In nuclear news, Terrapower broke ground on the first US SMR facility in recent history, which will house a sodium-cooled reactor, although it’s still waiting on a permit via the Nuclear Regulatory Commission. Plus, the US DoD posted an RFP for microreactors through the Advanced Nuclear Power for Installations (ANPI) program, aiming to deploy the microreactors on-site by 2030.

Meanwhile, across the pond, the UK Labour Party released a manifesto pledging to decarbonize the electricity grid by 2030. That includes carbon capture and storage (CCS), hydrogen and marine energy, long-term energy storage, and new nuclear power.

A new IEA report predicts a slowdown in global oil demand growth in the medium-term. It notes that amid a surging supply, oil markets are poised for a major surplus in the next decade, leading to unprecedented spare capacity levels rivaled only by those resulting from the height of COVID-19-related shutdowns.

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Opportunities & Events

📅 EM Power Conference: Register to attend the EM-Power Europe Conference from June 18-19th and engage with experts focused on modernizing and digitalizing the power grid into a flexible smart grid.

📅 Battery Show: Register to attend the Battery Show Europe from June 18-20th to connect with industry leaders, top battery manufacturers, and buyers and explore the latest advancements in battery and electric vehicle technology.

📅 London Climate Action Week: London’s own climate week will be June 22-30th with 200+ in-person and virtual events and 45,000+ attendees. If you’re in town, shoot us a note!

📅 Pickleball for the Planet: Register to join Pickleball for the Planet on July 1st for a night of pickleball fun in support of young climate leaders.

💡 Bezos Earth Fund: Apply to participate in the Bezos Earth Fund AI for Climate and Nature Grand Challenge by July 30th to receive up to $50,000 in funding and mentorship for your climate tech startup.