Last year saw a significant increase in energy prices due to the Russian invasion of Ukraine, with oil, gas, and electricity reaching their highest levels in 10 or more years. As a result, households in Switzerland expect to see energy bills rise by an average of 27%, in 2023, although this will vary by location.
According to the Swiss Federal Statistical Office, in November 2022, the price of gas for home heating averaged CHF 3’526 for 20’000 kWh. That compares with CHF 2’128 for the previous November and just 1’882 francs for the same month in 2021.
With the pressing need for a greener world, clean technology, or “cleantech,” has become more important than ever. Cleantech refers to a range of environmentally-friendly technologies, including wind, solar, hydrogen, carbon fiber, and more.
The Paris Agreement, signed, in December 2015, has spurred the growth of climate technology start-ups. Over 120 nations, comprising nearly 50% of worldwide GDP, have already set a net-zero target for 2050 emissions, or plan to do so. Cleantech start-ups are now targeting various industries, including energy, transportation, construction, food production and distribution, and various industrial processes.
This is a significant shift from Clean Tech 1.0 (2006-11), which only focused on the energy sector. Venture capital (VC) investors lost nearly half of the USD 25 billion they had invested in the cleantech start-ups during that period, leading to a slowdown in industry expansion. This time, established companies and start-ups are seeking to decarbonize not just energy production, but every economic and business sector. This is both through the advent of environmentally-friendly technology and efficiency improvements to existing technology.
While it is estimated that existing technology can reduce up to 65% of emissions, substantial further innovation is required for the remaining 35%. Moonshot believes that requirement will provide savvy investors with many opportunities for exceptional growth.
Many have seized on this already. Between 2013 and 2019, investment in climate technology grew five times faster than overall venture capital growth, despite comprising only 6% of the total VC investment assets at the end of that period.
So much for the recent past; what does the future hold for cleantech?