Interview with Anthony DeOrsey, research manager at Cleantech Group

WT: Please give us an overview of the Cleantech Group.

DeOrsey: Cleantech Group was launched in 2002 as a research-driven authority on global cleantech innovation. We assist corporates, the public sector, and others in identifying and engaging with innovative solutions and opportunities related to the environmental and climate challenges that confront our world.

Cleantech Group’s research is comprised of analysts specializing in: energy & power; materials & chemicals; agriculture & food; resources & environment; transportation & logistics; and the ecosystems of innovation that launch the cleantech technologies.

A proprietary cleantech taxonomy sorts and label companies according to specific technology categories.

Our insights and expertise are delivered through tailored consulting, and through events to clients worldwide.

WT: Has the Cleantech Group seen a shift in investment focus?

DeOrsey: While overall investments have cooled off since the 2021-2022 funding craze, in the clean-tech space it has not been a hard landing but rather a return to normality. We see 2023 coming out ahead of 2020.

The cleantech space is faring better than the wider technology universe, dropping only 27% in the first 3 quarters of 2023 when compared to the first 3 quarters of 2022. Various sources have estimated 37-42% drop across the full technology spectrum.

WT: Can you comment on other triggers that are now influencing the world view of innovation?

DeOrsey : The pandemic exposed many cracks in the way global economy works. Supply chains were affected. As an example, if we look at the critical materials theme – everything from more efficient mining, out to distributed mining materials, recycling, the entire onshoring effort influenced the view.

Companies that were driven by growth in energy storage and electric vehicles were suddenly shaken by the fact that clean components of technology products can stop showing up at factories.

Another dynamic in the cleantech space is that major industrial corporates have not slowed down on engaging innovative technologies. In the wake of the pandemic and even with a tough macroeconomic environment we still see the same levels of corporate motivation engaged in innovation.

WT: Does Cleantech Group research point to any specific technologies that need scaling up or need to come on stream?

DeOrsey: As a top-line trend, we are seeing more focus on ‘deep tech’ innovation in new types of hardware, chemicals or re-engineering of industrial processes for improved sustainability.

Technologies to decarbonize high-emitting heavy industries such as cement and steel are the best examples. In cement there are new technologies to reduce the amount of CO2 intensive materials into the mix, injection of CO2 into cement during the curing process or very new techniques such as electrochemical cement production that does not use heat or fuels in the process.

In steel we are seeing exciting innovation that uses hydrogen for the direct reduction of iron ore; smelting of iron ore with green hydrogen and renewable electricity; and the use of renewable electricity to melt iron ore with electrochemical reactions (molten oxide electrolysis).

Renewables will continue to be deployed in energy but are intermittent (only generating power when the sun is shining, and the wind is blowing). Long-duration energy storage will be needed to make renewable power ‘dispatchable’, that is to say, able to be pulled into the grid whenever needed).

WT: A great deal of discussion revolves around the use of critical materials in energy production. What insights is the Cleantech Group research able to provide for our viewers?

DeOrsey: Batteries such as lithium–ion will fulfill most of the short-duration (multiple hours requirements), but more technologies will need to be deployed to store power for 10 + hours or days.

We have been examining Vanadium Redox Flow Batteries as one pathway – a technology that has been around for a few decades that is currently seeing some innovation to become more practical.

We have also dug deep into thermal energy storage, the concept of heating up/cooling down a substance with materials that can withstand significant temperature changes (sensible heat) or leveraging phase changes of materials (latent heat) for heat storage and discharge. Thermal energy storage can also be used to store very high heat for industrial processes (paper, glass, steel, cement), creating an additional use case.

In the critical materials space, there is little debate that more materials such as lithium, copper, cobalt, nickel, platinum group metals will be needed in the energy & mobility transitions.

To meet this demand, technologies that allow for faster and cleaner mines, better manufacturing of energy storage products, and recycling of critical materials from end-of-life energy storage products will all be necessary.

We’ve looked closely at the upstream extraction of lithium, especially technologies such as direct lithium extraction that can mine lithium faster and cleaner. There is ample lithium in the world to supply needs for the energy transition. It will be a matter of accessing it fast enough to meet demand and without serious environmental impact.

We see improvements to batteries via new chemistries such as silicon anodes

and lithium-sulfur batteries.

We believe that manufacturing techniques will be improved to identify better battery formulations (AI for materials discovery) and nano-structuring techniques to make batteries more energy-dense (atomic layer deposition)

Technologies that recycle critical material maintaining their quality, will become crucial to keeping materials supply onshore in North America and Europe.

These technologies are now being used to recycle manufacturing scrap at battery production facilities but will be used for recycling end-of-life batteries in the future as well. This is not a trend limited to North America and Europe.

This year we have seen a precipitous jump in Asia Pacific-based venture investments underpinned by fast growth in battery and battery components innovation.

Innovation to make the built environment more sustainable is also coming into focus -- from the perspective of building operations out to more sustainable building materials.

Making the built environment more sustainable

will be a matter of chasing the 'moving target’ of firstly reducing energy (primarily from heating and cooling) in buildings today. Secondly, by using building materials with less embodied carbon such as green steel and green cement while also using less emitting construction techniques like modular construction and robotics. Thirdly, by re-inventing high energy use devices to be more efficient in a more crowded urban future.

Reducing energy use in data centers is also an innovation area that we’ve been watching closely. Immersion cooling is a technology class that is effective but too expensive today and will continue to evolve.

WT: Is there a change in perspective regarding hydrogen. In a recent study by Cleantech Group key findings state that low carbon has robust growth prospects but needs policy support. In a recent press release, it was stated that ‘Global demand for low-carbon hydrogen is predicted to rise steadily although it accounted for less than 1% of the total hydrogen production in 2022. Demand increases are estimated to reach 150Mt by 2030 and 520Mt in 2050. An estimated $80-$300B will be required to build the global low-carbon hydrogen economy by 2030.’ Please comment.

DeOrsey: Hydrogen is a space that we've watched evolve from a relatively niche set of technologies to what is now becoming an industry unto itself, and a mainstream one at that.

Produced with at least 80% lower emissions than fossil fuels, low-carbon hydrogen costs up to three times more than alternatives, but robust policy support including direct financial incentives, can help it become competitive. low-carbon hydrogen could gain 14% share of global energy demand by 2050, according to the IEA.

Until 2021, venture investments in hydrogen innovation were relatively small and slow. They have increased significantly over the past three years and there is now a clear focus on hydrogen production technology.

WT: How does the Cleantech Group connect cleantech entrepreneurs and innovators with opportunities?

DeOrsey. We work across a wide surface area (energy & power, materials & chemicals, resources & environment, transportation & logistics, agriculture & food) and are constantly engaging with innovators.

Our analysts conduct research mostly through primary research with innovators, investors, and corporates in our network to understand “the bottom up” of what’s happening at ground level in cleantech innovation.

WT: How can innovators and start-ups become involved in your research and connect with investors?

DeOrsey: To become highly successful in getting our analysts intimately familiar with innovators’ stories we suggest:

• Claiming and regularly updating your i3 profile. This is often the first stop for analysts teeing up primary research outreach.
• Meeting our team at events
• We are frequently speaking at/attending events and often book sideline chats/updates with innovators we’ve got relationships with there
• Book annual/semi-annual check-ins with our analysts – this is common for innovators in our network that are moving fast and will see their situation materially changing in short periods of time.

We do not charge innovators anything for the engagements listed above, and analysts have full editorial freedom over who/what they include in research and public-facing presentations, so there is mutual benefit in having consistent engagement.

We hold three Cleantech Forums every year (California, Singapore, different city in Europe each year) where we always have innovative showcases for innovators to present to an audience of investors and corporates.

We encourage anyone interested in engaging with us to reach out.