This will surprise nobody who has been following renewable energy news for the last 10 years or so, but Texas — aka the oil and gas capital of the country — has been stealthily transitioning into a new role as the clean tech capital of the US. Now it seems the cat is out of the bag, and global energy players are pricking up their ears. Earlier this morning, word dropped that GS Group of Korea is backing the new Energy Transition Ventures fund, which bills itself as the first such entity in Texas committed to disrupting the energy industry with seed money for promising clean tech startups.
Wait, What is GS Group?
GS Group is new on the CleanTechnica radar, so let’s kick off with them.
GS Group is connected to the new Energy Transition Ventures fund through its capital branch GS Futures, which is based in California’s Silicon Valley.
More to the point, GS Futures is just one piece of the GS puzzle, which encompasses the legacy fuel company GS Energy as well as GS Caltex, GS Retail, GS SHOP, GS EPS, GS Global, GS E&R, GS Sports and GS E&C, whatever that is.
The point is that GS Group is the 7th largest business group in Korea as measured by assets, so its dive into the US cleantech marketplace of startups in Texas is a big deal.
Okay, So What Is Energy Transition Ventures?
Energy Transition Ventures is a new fund, not to be confused with the similarly named Energy Transition Ventures Group launched by Kinder Morgan last month.
In an interesting twist, the ETV website hosts blog posts that date all the way back to an October 2008 entry by ETV partner and former US Senate candidate Neal M. Dikeman, in which he offered up a prescient warning for early stage clean tech investors.
“Be forewarned, you do not have a comparative advantage here,” he wrote. “The oil men invented risk taking, AND risk management. The oil men are bigger, faster, smarter, richer, have more scientists and more entrepreneurial spirit than you, AND they know energy.”
Okay, so he wrote females and other identities out of the picture, but that was written back in the olden days of 2008, when oil men ruled exclusively over everything oil.
Where were we? Oh, right. The main idea is that Dikeman foresaw the ability of the big oil and gas giants to pivot into renewable energy once the opportunity presented itself.
That’s pretty clear now, considering all the renewable energy activity undertaken by global firms like Shell. Some of that clean tech pixie dust could rub off on GS Energy and GS EPS, which are represented in ETV through partner Q Song. The third partner in ETV partner is Craig Lawrence, formerly of SunEdison and SolarBridge/SunPower as well as Accel Partners and IDEO.
As for Dikeman, his resume includes Shell Technology Ventures as well as Jane Capital, Smart Wires, and Cleantech.org (not to be confused with CleanTechnica.com) among many others.
The Many Hands Of The Renewable Energy Revolution
Circling back around to that old blog post, the institutional know-how of legacy energy firms is one factor that is (finally) beginning to push the renewable energy revolution into high gear. Another factor is the supply chain, as illustrated by the goings-on in another iconic oil and gas state, Louisiana.
Louisiana Governor Jon Bel Edwards has become fond of pointing out that several of the Pelican State’s leading oil and gas services companies were instrumental in the construction of the very first offshore wind farm in the US, the Block Island array off the coast of Rhode Island. Now the state is peering into a wind-powered future of its own, aided and abetted by its existing industrial base.
Texas Emerges As Renewable Energy Leader
If you’re wondering where Texas figures into all of this, that’s a good question. Despite its deep roots in fossil energy, Texas is firmly among the frontrunners in the nation’s wind power race, its solar industry is beginning to catch fire, it just launched a pilot project leading to a regional green hydrogen hub, and its grid operator ERCOT is part of a global consortium aimed at turbo-boosting the electric vehicle market with renewable energy.
Aggressively growing clean tech firms like Octopus are eyeballing Texas as fertile ground for growth in the clean tech field, and that brings us back around to ETV.
“Investments will focus on companies driving or benefiting from the energy transition off fossil fuels, across categories including distributed energy, electrification, mobility, and resource efficiency,” ETV explains, noting that it expects the fund to hit the $75 million mark with new investors on board.
Tae Huh, the Managing Director of GS’s new venture arm GS Futures, explains that his firm is already primed for action.
“We’ve already run successful pilots in Korea with three US startups even before this fund closed an investment – we are working to accelerate the old model of corporate venture dramatically,” he said.
As for why Texas, Lawrence explains ETV’s decision to locate squarely in the epicenter of US fossil energy production:
“Texas is the energy capital of the world, and outside of corporate venture capital, there are not many venture funds in the state,” he said, “So it makes sense to start an energy transition focused fund here as the latest wave of clean technology investing accelerates.”
Covering all the bases, ETV will also share a Silicon Valley office with GS Futures.
Biofuel Missing From The ETV Renewable Energy Picture
ETV is casting a wide net in terms of clean tech, but it has a take on renewable energy that will not please biofuel fans. ETV does not appear particularly interested in biofuel. In fact, not at all.
“Combustion processes that have defined our energy use for the last 100 years are in the final stages of their product lifecycle – we aren’t going to be doing things in 100 years the way we did them 100 years ago,” ETV explains, adding that “We see a sustained battle between electrical and biological pathways, with electrification winning in many cases by providing superior flexibility.”
Reading between the lines, that is one Texas-sized clap-back at ExxonMobil, which is still betting its renewable energy marbles on various forms of biofuel.
ETV also notes that that scale-up in the electric vehicle field and other industries will help propel the cost of electrification technology down, by which they mean silicon and lithium will continue to be competitive.
“Don’t bet against silicon and lithium,” is the ETV message.
Hmmmm…but what do they really mean? Perhaps they foresee plenty of room for growth in the silicon and lithium fields, even as low-cost alternatives begin to emerge.
Perovskite solar cells, flow batteries, and green hydrogen are among the non-silicon, non-lithium electrification mediums popping up on the CleanTechnica radar, but it’s a big world out there and the renewable energy transition can use all the help it can get.