🌎 What the dire straits in Hormuz mean for new energy flows #287

Happy Monday!

With oil prices rising, there’s a renewed focus on domestic electrons and molecules. Here’s what the Strait of Hormuz crisis means for new energy flows.

In deals, $2bn for vertically integrated AI infrastructure platform, $651m for solar and battery storage development, and $600m for green technology development.

In other news, inside the European Commission’s new clean energy investment strategy, California’s zero-emissions plans and residential solar take hits, and DOE earmarks ~$2bn for grids.

ICYMI: Go behind-the-scenes on what Stargate’s (Oracle and OpenAI’s flagship data center) retreat could signal for the data center landscape in our newest newsletter, Powerstack. Subscribe here for Power updates every Thursday.

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Plus, read our breakdown on China’s 15th Five Year Plan which comes at a critical juncture for climate, energy security, and the global balance of power.

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Dire straits in Hormuz put a premium on energy security

The world's most important energy chokepoint, the Strait of Hormuz, has been effectively closed since 28 February 2026. Since then, tanker traffic has dropped to near zero, Brent crude has broken $100 a barrel several times, and unprecedented levels of strategic reserves have been released.

As we saw with COVID, supply chain shocks are most felt in the aftermath of a crisis. The focus on energy security has already been at an all-time high, but this latest shock could fully tip the scales in favor of domestically produced electrons and molecules (read below: clean fuels and renewables).

What happened

In February, US-Israel strikes on Iran triggered swift retaliation. Iran announced it would attack all vessels traveling through the Strait of Hormuz. The scale of disruption has been severe, as the strait represents:

~20% of global petroleum liquids consumption. Cutting off ~20m barrels per day, with bypass pipeline capacity covering only ~33% of Gulf export flows, sent Brent to $100 a barrel on 8 Mar, peaking at $126 and remaining above $100 as of this weekend.
Of those barrels, ~5.5m barrels per day of refined products, including diesel and jet fuel. Diesel flows are roughly double those of jet, but jet is more exposed: over half of Europe's jet fuel imports sail through Hormuz. (The rest is crude.)
~20% of global seaborne LNG trade. While the 110bn cubic meters that transited Hormuz in 2025 represent only ~3% of all globally traded gas, LNG markets clear at the margin, meaning a 3% physical shortfall creates a price spike far larger than the volume suggests. European natural gas prices nearly doubled in days.
~33% of globally traded fertilizer. Nearly half of global urea and sulphur exports transit the Strait. With no strategic reserve to draw on and the closure coinciding with the Northern Hemisphere spring planting season, the agricultural supply chain impact could be dramatic.

Multiplying all these price shocks is shipping costs. War risk insurance premiums have surged, Houthi attacks in the Red Sea have resumed simultaneously, and major carriers have rerouted via the Cape of Good Hope, adding weeks to transit times and compounding port congestion worldwide.

Why it matters

There's no fast clean substitute for many of these commodities, so those that are quicker to deploy and have more resilient domestic supply chains are poised to fare better.

Winners:

Domestic clean fuel producers. Ethanol and domestically sourced biofuels have the least exposure to chokepoint risk and the most to gain from the energy security narrative. The ethanol-to-SAF pathway gets more attractive as UCO-based feedstock costs spike, a tailwind for US projects like Gevo's Net-Zero 1 and LanzaJet's Freedom Pines. As we wrote in China’s 15th FYP, China’s regulators are signaling strong policy backing for green hydrogen and fuels production and consumption as a security hedge.
Renewables. Wind and solar added 830TWh of generation globally in 2025. The Hormuz LNG shortfall, converted to electricity, is roughly 600TWh. It’s a surmountable gap from normal deployment momentum, even before any crisis-driven policy push, as Michael Liebreich wrote.

Losers:

UCO-dependent SAF producers. HEFA-based producers face a triple squeeze — tariffs, traceability rules, and now shipping disruption — and the EU's ReFuelEU mandate doesn't flex feedstock requirements. Compliance gets dramatically more expensive, accelerating the pivot toward AtJ and power-to-liquid pathways.
Gulf-anchored hydrogen and ammonia projects. NEOM, ACWA Power, and Oman's green hydrogen corridor face delayed FID timelines, repriced financing, and offtaker interest shifting toward Australia, Chile, and the US Gulf.

*Source:* *Sightline Climate analysis* *on Strait of Hormuz impact.*

Key takeaways

Domestic clean fuel producers are the immediate winners. Ethanol, US-sourced renewable diesel, and the ethanol-to-SAF pathway all benefit from improved economics and a stronger energy security narrative.
Electricity is more insulated than fuels and fertilizers. The alternatives already exist and are scaling. After Russia's 2022 invasion, Europe briefly bounced back to coal; the lasting effect was a near-doubling of annual solar additions within two years. The same dynamic is likely here, only faster.
Whether this becomes a turning point depends on how long it lasts. Sustained price pressure moves capital; short shocks don't. With Goldman warning of $98+ Brent through April, the window is open, but it won't stay open indefinitely.

This is a preview of Sightline’s analysis on the Strait of Hormuz’s impact. Clients can read more on the Sightline platform here.

Deals of the Week (3/9-3/16)

VC / Growth

🏠 Nscale, a London, England-based AI infrastructure platform, raised $2bn in Series C funding from 8090 Industries, Aker ASA, Astra Capital Management, Citadel, Dell Technologies and other investors.

🚗 Zeron Truck, a Suzhou, China-based intelligent heavy-duty electric truck manufacturer, raised $175m in Series A funding from Puquan Capital, Momenta, NIO Capital, Anhui Lingtong Group, Blue Lake Capital, Fangguang Capital, and other investors.

☀️ Heliup, a Le Bourget-du-Lac, France-based solar photovoltaic solutions provider, raised $19m in Series A funding from Supernova Invest, BNP Paribas Développement, Crédit Agricole Alpes Développement (C2AD), Lita.co, MAIF Impact, and other investors.

🧪 Seprify, a Marly, Switzerland-based cellulose formulation ingredients developer, raised $16m in Series A funding from Una Terra, Cambridge Enterprise Ventures, IKEA, Kickfund, and Zürcher Kantonal Bank.

🏭 MGA Thermal, a Newcastle, Australia-based thermal energy storage developer, raised $12m in Series A funding from IP Group Australia and Main Sequence Ventures.

🏠 Coral, a Brooklyn, NY-based rebate financing platform, raised $8m in Seed funding from ResilienceVC, Accion Ventures, Blackhorn Ventures, Floating Point, New Climate Ventures, and other investors.

⚡ Newtrace, a Bengaluru, India-based electrolyzer technology developer for green hydrogen, raised $6m in Seed funding from HDFC Bank, Mitsui Sumitomo Insurance Venture Capital (MSIVC), Aavishkaar Capital, Micelio Mobility, Speciale Invest, Surge, and other investors.

⚡ Hyperscale Power, a Zurich, Switzerland-based solid-state transformer technology developer, raised $6m in Seed funding from Vsquared Ventures and World Fund.

☀️ Amelia, a Barcelona, Spain-based solar construction quality control automation platform, raised $6m in Seed funding from Actyus, Sabadell Venture Capital, Sergi Figueras, Aureli Bou, CDTI, and other investors.

🛰 Airmo, a Munich, Germany-based satellite technology developer for GHG emissions monitoring, raised $6m in Seed funding from Ananda Impact Ventures, Antler, Desai Ventures, E2MC, Findus Ventures, and other investors.

🌾 Cytotrait, a Manchester, England-based crop genetic traits developer, raised $4m in Seed funding from Northern Gritstone, The Northern Universities Venture Fund, and UK Innovation & Science Seed Fund (UKI2S).

🛵 Dat Bike, a Ho Chi Minh City, Vietnam-based electric motorbike manufacturer, raised $4m in Series B funding from Thien Viet Securities JSC.

🥩 Cellva Ingredients, a São Paulo, Brazil-based cellular agriculture technology developer, raised $4m in Seed funding from DigiBoard, Air Capital, and Rubens Pereira.

Project Finance / Debt

☀️ Arevon Energy, a Scottsdale, AZ-based utility-scale solar and energy storage developer, raised $651m in PF Debt and Equity funding from Canadian Imperial Bank of Commerce (CIBC), ING Capital, Nord/LB, Santander, Goldman Sachs and other investors.

🌬 Envision Energy Group, a Shanghai, China-based green technology developer, raised $600m in Debt funding from Banco Bilbao Vizcaya Argentaria (BBVA) and Crédit Agricole CIB and other investors.

🔋 GridStor, a Portland, OR-based battery energy storage systems developer, raised $120m in PF Debt funding from Nord/LB and Siemens Financial Services.

🏭 Electra, a Boulder, CO-based low-carbon iron producer, raised $30m in Debt funding from J.P. Morgan Asset Management.

⚡ Hero Future Energies, a London, England-based global renewable energy provider, raised $14m in Debt funding from Infrastructure Leasing & Financial Services (IL&FS).

Exits

🔋 Wildcat Discovery Technologies, a San Diego, CA-based innovative battery materials developer, was acquired by Holyvolt at an implied valuation of $73m.

🚗 Protean Electric, a Farnham, England-based in-wheel motor manufacturer, was acquired by EXEDY at an implied valuation of $32m.

⚡ InductEV, a King of Prussia, PA-based wireless charging for fleet service provider, was acquired by ElectReon for an undisclosed amount.

⚡ Ozone Renewables, a Guilford, CT-based renewable energy developer, was acquired by Exus Renewables for an undisclosed amount.

Funds

RGREEN INVEST, a Paris, France-based sustainable infrastructure investor, raised over $1bn at the final close of its Infragreen V fund, targeting European energy transition infrastructure across renewable energy, energy storage, and electrification in Central and Eastern Europe.

Emerald Technology Ventures, a Zürich, Switzerland-based venture capital firm, announced $110m milestone for its Global Water Fund II, focused on water resilience and climate technology.

Persistent, a Nairobi, Kenya-based climate venture builder, announced $52m in a first close of its Persistent Africa Climate Venture Builder Fund, targeting pre-seed through Series A investments in energy, agriculture, and resource management across Africa.

This is a sample of deals available for Sightline clients. Can’t get enough deals?

Request a Sightline Climate demo

In the News

The European Commission launched a Clean Energy Investment Strategy to mobilize more private capital for the energy transition, aiming to close the gap between current financing and climate goals. The strategy focuses on grid equity, loan securitization, and de-risking innovation. The EU estimates the transition will require about €660bn ($759bn) in annual investment through 2030.

The Trump administration sued California over its zero-emission vehicle and tailpipe emission rules, arguing the state’s mandates conflict with federal authority over fuel-economy standards. The lawsuit targets California’s plan to phase out new gasoline car sales by 2035, escalating the long-running federal–state clash over EV and emissions policy.

In other California news, a California appeals court upheld the state’s 2022 net-metering reform, which cut payments to rooftop solar owners for excess electricity by roughly 75%. The decision preserves lower compensation that utilities say prevents cost-shifting to non-solar customers, but critics warn it could further slow rooftop solar adoption.

In other US federal news, the US Department of Energy announced $1.9bn to modernize critical grid infrastructure, focusing on upgrades like replacing power lines and deploying advanced transmission technologies. It also announced $500m for domestic critical materials processing and manufacturing in a new domestic battery supply chain push.

US forecasters say El Niño conditions are likely to develop by September, with about a 62% chance of forming by then, potentially pushing global temperatures even higher. The warming Pacific pattern could disrupt global weather and agriculture while adding to climate-driven heat trends.

Pop-up

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Base Power expands its VPP base with one of the largest home-battery fleets in the US.

Albany hits the brakes on one of America’s boldest climate plans.

Britain’s wildlife photography awards steal the spotlight in this year’s stellar shots.

Sightline updates

How Climate Finance Solutions used Sightline Climate to expand in Europe: Learn how Climate Finance Solutions used Sightline Climate to get a live, structured view of the climate market, so the grant advisory could pinpoint the best-fit companies for each opportunity based on subsector, stage, geography, investors, and competitive positioning. Read more here.

Opportunities & Events

📅 Energy & Eggs: Join Planeteer Capital on March 18 in New York, NY, for an opportunity to engage with leading climate and energy investors over breakfast and discuss the latest innovations in the sector.

📅 Bagels > Panels: The Cost of Compute: Join a breakfast climate conversation hosted by Planeteer Capital and Foley Hoag focused on AI × energy infrastructure on March 19 for an opportunity to engage with climate tech leaders discussing compute demand, power management, and energy market infrastructure.

📅 Power Plays Podcast Launch: On March 24 from 6:00-8:30pm GMT join Lucy Shaw and Charlotte Kirk in London for the Power Plays Launch Night and Live Podcast. Hosts Lucy and Charlotte will cover the tech, finance, and politics driving the energy transition of the week.

💡 C10 Labs AI Nexus Accelerator: Apply by March 27 for C10 Labs' inaugural cohort of the NYC AI Nexus – NYC's applied AI venture studio and accelerator. The NYC AI Nexus accelerator program, built in partnership with NYCEDC, is for early-stage AI-first startups in healthcare, BioTech, energy, climate, robotics and manufacturing.

📅 Small Group Networking: Join Climate Conscious Leaders for small group networking on Zoom from 3-4pm EST on April 1. Expand your network with eco-conscious product professionals who share your passion for sustainability.

📅 Energy Tech Summit: Join thousands of startups, investors, corporates, and policymakers at the 7th edition of Europe’s leading energy innovation event in Bilbao, Spain from April 15-16 (CTVC subscribers can get 15% discount with the code: SIGHTLINECLIMATE).