France Emerges as VC Dealmaker for Alternative to Nuclear Energy
Three French companies have emerged as the most prolific venture capital dealmakers for new energy technologies as the country starts to seek out low-polluting alternatives for its aging nuclear reactors.
Engie SA, Demeter Partners SA and Total SA participated in more green-energy deals than any other venture capital firms last year, according to the most recent data compiled by Bloomberg New Energy Finance. While the $62.3 million that French funds put into the industry is a fraction of the overall $7.5 billion VCs invested in green energy, the number of deals indicates a budding community of early-stage financiers outside Silicon Valley.
Even as Electricite de France SA seeks to prolong the lives of aging nuclear reactors, the leading presidential contender is pushing for a shift toward renewables and companies are gearing up to make bigger investments in wind and solar farms. The VC funds are backing technologies that modernize the power grid to cope with power supplies that vary with the weather and can accommodate more electric mobility.“They are finally prioritizing renewables, perhaps at the expense of nuclear,” said BNEF analyst Dario Traum , referring to tenders where the government awards building permits and power purchase agreements. “France has set a clear quarter-by-quarter auction schedule through to 2019. Very few other markets in the world are as clear right now.”
The French firms remain small against established Silicon Valley companies. The three that led the ranking completed 21 deals in 2016 — as many as the next six VC institutions combined — in the Bloomberg New Energy Finance ranking. Draper Fisher Jurveston and Kleiner Perkis Caufield & Byers LLC continue to lead the industry, with a total of 286 deals between them since BNEF started collecting data more than a decade ago.
(Bloomberg) — Three French companies have emerged as the most prolific venture capital dealmakers for new energy technologies as the country starts to seek out low-polluting alternatives for its aging nuclear reactors.
Engie SA, Demeter Partners SA and Total SA participated in more green-energy deals than any other venture capital firms last year, according to the most recent data compiled by Bloomberg New Energy Finance. While the $62.3 million that French funds put into the industry is a fraction of the overall $7.5 billion VCs invested in green energy, the number of deals indicates a budding community of early-stage financiers outside Silicon Valley.
Even as Electricite de France SA seeks to prolong the lives of aging nuclear reactors, the leading presidential contender is pushing for a shift toward renewables and companies are gearing up to make bigger investments in wind and solar farms. The VC funds are backing technologies that modernize the power grid to cope with power supplies that vary with the weather and can accommodate more electric mobility.
“They are finally prioritizing renewables, perhaps at the expense of nuclear,” said BNEF analyst Dario Traum , referring to tenders where the government awards building permits and power purchase agreements. “France has set a clear quarter-by-quarter auction schedule through to 2019. Very few other markets in the world are as clear right now.”
The French firms remain small against established Silicon Valley companies. The three that led the ranking completed 21 deals in 2016 — as many as the next six VC institutions combined — in the Bloomberg New Energy Finance ranking. Draper Fisher Jurveston and Kleiner Perkis Caufield & Byers LLC continue to lead the industry, with a total of 286 deals between them since BNEF started collecting data more than a decade ago.
“We invest either as minority shareholders if it’s very technological, or take control if it’s core business, in companies which may become global leaders,” said Thierry Lepercq, head of innovation, research and technology at Engie, the utility formerly known as GDF Suez.
VC funding has always been a small but important part of the money going into clean energy, which reached $287.5 billion pounds last year. The VC funds typically put small amounts of money into frontier technologies, hoping for a double-digit return on the ones that work. Investment by VC and private equity firms increased a fifth annually over the last three years, rebounding from a peak in 2011 when the industry was backing manufacturers of wind turbines and solar cells.
Since then, the investments have moved onto technologies like electric cars and computer software that helps utilities better manage power grids.
Wide Range of French Deals
AQUIRER TARGET
Engie EV-Box: an electric car company
Engie Green Charge Networks LLC: battery storage company
Engie Heliatek: photovoltaic films
Engie Symbio FCEll: hydrogen fuel cells
Total Energy Ventures Off-Grid Electric: solar home systems in east Africa
Total Energy Ventures Cosmo: energy software
Total Energy Ventures Autogrid: energy software
Total Energy Ventures Stem: power grid management
Demeter Comarth: electric vehicle design
Demeter Altawest: power and waste processing
Demeter Green Gas: methane recovery
Demeter Ideol: floating offshore wind
To date, France has lagged neighbors developing renewable energy, which account for 15 percent of installed capacity, excluding hydropower. That compares with 34 percent in the U.K. and 51 percent in Germany. Last year, France received 72 percent of its electricity from nuclear reactors, according to BNEF.
A shift already is underway. President Francois Hollande’s government has introduced a clearer and more favorable legal framework for clean-energy and boosted incentives to switch to electric vehicles with higher taxes on gas guzzlers. Emmanuel Macron, who is the front runner in the presidential contest that culminates on May 7, has called for greater use of renewables. His rival Marine Le Pen has said she would prolong the country’s dependence on atomic power.
Source:Bloomberg
