How Innovation is Driving Clean Energy Breakthroughs

Clean energy has a critical role in achieving a net-zero world and improving energy security. That’s why BMO has been exploring the role of innovation in driving new forms of clean energy, addressing the challenge of reaching scale, and increasing the efficiency and cost effectiveness of new energy systems.    

For example, Kevin Kong, of climate tech startup Everstar AI, has created a nuclear compliance platform that uses artificial intelligence to streamline the compliance and licensing process for nuclear reactors. With the exponential growth in AI applications, energy-intensive data centers can’t afford to wait for decades for reactor approval, Kong says. Everstar helps by reducing timeframes and lowering costs so requirements can be met more efficiently. 

Meanwhile, Lumora Technologies helps energy traders become more efficient with software that corrals data from disparate sources into one place to enable fast but informed decision-making. “We’re trying to bring information about all diverse assets in one place, so that traders can have that information at their fingertips and respond and adapt to current market conditions,” says Lumora CEO Mariah Francis Carter.  

Everstar and Lumora, both companies recently featured on BMO’s Sustainability Leaders podcast, are just two of the thousands of startups that are addressing inefficiencies in the transition to cleaner energy sources with innovation and advanced technologies. They are developing new business models while also shedding light on the many ways that innovative market solutions are driving new potential forms of energy.  

Nuclear power has been gaining attention in recent years, as technology companies developing artificial intelligence applications and solutions procure clean energy sources to power data centers.  

Nuclear fusion holds the promise of supplying carbon-free nuclear energy without some of the drawbacks of conventional fission nuclear technology. As fusion technology matures into commercial development, helium-3 is emerging as a key fuel for fusion reactors due to the ability of two helium-3 atoms to fuse and create a burst of energy without creating radioactive waste. In addition, helium-3 is used as a refrigerant in quantum computing. 

Though there is hardly enough helium-3 on Earth, there is a high concentration of helium-3 on the Moon. The Extraterrestrial Mining Company (XMC) is on a mission to mine helium-3 on the moon. Not only is the approach innovative, but XMC is developing innovative technologies, financing structures and partnerships to start meaningful operations in the 2029-2030 timeframe. Helium-3 could just be a start. “Many of the elements that are in short supply on planet Earth are in abundance in celestial bodies”, says Glen Martin, Chief Executive Officer of XMC. 

Then there are approaches to renewable energy that are still being developed but could represent future breakthroughs. For example, researchers have shown that certain types of biological cells have concentration gradients that produce enough energy within the cell to make ATP, adenosine triphosphate, one of the building blocks of biological existence. Could such a process be mined further? 

While unconventional ideas might hold promise in becoming the next breakthrough technology, they face significant barriers along the way, including public acquiescence in the status quo. “The lack of scientific and political focus on deeper understanding of the role of energy extraction, production, transmission, and use” is also a challenge, says George Hathaway, founder and president at Hathaway Research International, a research and development laboratory that validates inventions.  

Among the challenges that startups face is finding funding to scale. That’s because the economics of business can’t begin and end at the lab. Startups need to prove that their products are viable and they can scale according to market demand.  

“We need to get innovation out into the market, but also do it in a way that can accelerate industrial adoption by driving down the cost and accelerating bankability,” says Tyson White, director of partnerships at Breakthrough Energy. “Unless we can drive down the cost of next-generation technologies closer to parity, or ideally they add over time a discount to fossil incumbents, they’re going to struggle.” Founded by Bill Gates, the organization invests in clean energy innovation and solutions.  

One of those solutions, Project RoadRunner from Infinium, is a power-to-liquid sustainable aviation fuel project. Headquartered in Texas, it produces sustainable aviation fuel that reduces lifecycle emissions by 90%. “It’s an example of a technology that has progressed out of the lab into the stage where they are building a pretty significant commercial deployment,” White says. American Airlines and Amazon have signed up to test drive the fuel. 

What advice do industry experts have for entrepreneurs focused on energy innovation? “The most important thing is realizing that talking to venture investors is just one very small part of this equation,” says Denver Yu, analyst with Generational Partners, a Los Angeles-based venture capital firm. Nail down the product that the end-customer wants, Yu advises, because sometimes what the customer says and what they want can be very different. “Think about how to de-risk your business plan by following the examples of past entrepreneurs who have walked the road before you,” he adds. 

There’s a need for ideas and a need for people to take risks and try to innovate. At the same time, have a strong understanding of the risks involved, says White from Breakthrough Energy. “Have an honest upfront conversation with different financiers involved and understand how you can bridge some of those gaps, whether it’s through the insurance marketplace or various government tools,” he says.  

White agrees. “We can’t be tone-deaf to certain challenges but humankind’s absolute hunger for incremental energy to power the way we live is just a massive tailwind that we continue to be tremendously excited about. [Especially for] what it means for innovation in the marketplace.”