🌎 Inside Cloverleaf Infrastructure’s power play #206

Happy Monday!

We’re officially in the dog days of summer, but we’re powering through by bringing you a Q&A on the evolving energy grid with Brian Janous, co-founder of Cloverleaf Infrastructure, which announced a $300m raise last week.

In other news, the EU stays the course by reelecting its current environmentally-friendly president, while the US shakes it up with VP Kamala Harris in the running and a new anti-clean energy Trump VP pick.

In deals, $65m for PPA marketplace expansion, $49m for vertical farming, and $43m for carbon-negative chemical production.

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The race to power

Last month, we sat down with Brian Janous, former head of Microsoft's global energy strategy, who recently turned over a new leaf and founded Cloverleaf Infrastructure.

He walked us through the shifting needs of the grid amid AI’s growth, emerging challenges and opportunities, and why he decided to start Cloverleaf Infrastructure, which recently announced a whopping $300m raise.

This interview has been edited for brevity and clarity.

CTVC: You were at Microsoft for 12 years — what new challenges arose in that time with regards to grid and connection?

Brian Janous: When I first started, the cloud was young, and data centers were pretty small. Network was the driving force in terms of siting and building out infrastructure, not power. That's why US data centers are in Northern Virginia, because it's the biggest network hub. Over time, as the cloud and the size of data centers grew, people realized that constraints were not access to network or land or people, but rather, access to power. Even before AI, there was a shift, as the availability of power, time-to-market, scale, and, of course, sustainability, led decisions around data centers.

Then, with ChatGPT’s release in November 2022, it became abundantly clear our biggest challenge was power. At that time, people worried about access to chips. But today, no one is worried about getting chips. They're worried about being able to plug those chips in.

CTVC: How did data center strategy shift?

Brian: The whole AI game is about building the largest, most sophisticated models. The more you can scale these things, the more powerful they become. The closer you get to AGI, it's all about brute force computation. And constraints around power become an existential issue.

All of the big tech companies are focused on how to get access to as much power as possible, finding locations where they can plug in as many chips as possible, places with robust power supply. They need high voltage networks, and these are the 765kV systems in Ohio and Indiana, where many hyperscalers have recently been buying land.

But utilities are becoming overwhelmed. They've got a massive backlog of interconnection requests. They're entering a world of 1-3% annual growth, which doesn't sound like a lot, but for an industry that hasn't grown in 20 years and usually operates on 5-10 year planning cycles, it’s a significant challenge.

CTVC: What's the top list of things that data centers and tech care about (around power)? And how does that affect the willingness to pay?

Brian: For priorities, time-to-market is number one. High availability is a non-negotiable. Data centers need to be up the vast majority of the time. Reliability is a given. Flexibility is key. But it comes down to the time to market — this is a race to build the most sophisticated models, the strongest sort of inferencing capabilities. They're not particularly price sensitive in that context — no one's thinking about the cost of power. They're thinking about when the power can be available.

After that, scale. They need to be big. Then, it's probably sustainability. Companies want to continue to meet their aggressive climate targets. They’re still making progress towards decarbonization, but emissions are actually going up, not down. The reality is lots of headwinds exist today that didn't when companies like Microsoft, Google, and Amazon set goals in 2020 — AI growth being one of them, plus supply chain and interconnection issues.

Price is probably last. Power isn’t the only cost of operating a cloud or AI service, and the view is that in the AI opportunity, a few winners will come out on top, and you're willing to spend a lot of money in the short run so it’s you.

CTVC: What solutions can address the supply-demand mismatch in that timeframe? Are new gas plants inevitable?

Brian: It's likely that we'll have to build some new fossil fuel generation to meet demand. There's a lot of levers, though, that utilities can deploy that can minimize impact to the greatest extent possible, like grid-enhancing technologies — reconductoring of transmission lines, applying dynamic line ratings, using storage as transmission. These can extract more capacity out of the existing systems without significant investments in fossil fuels. It doesn't mean there will be none, but there are things utilities can do.

CTVC: Switching gears, what led you to decide to co-found Cloverleaf? And what are you focusing on there and why?

Brian: When I left Microsoft, I was thinking about this issue of grid expansion and how we are going to meet the demands of AI and all these other loads coming on the grid. It became clear that there would be a shortage of powered land in the country.

All these levers we have — grid-enhancing technologies, storage-as-transmission, optimizing customer-side resources — take time to orchestrate and determine where on the grid we can support more capacity and more growth. And utilities need help with this. They don't fully understand the demands coming at them, because they're changing all the time and growing really fast, and there’s lots of bad information out there.

So, we've founded Cloverleaf as a powered land developer. We work with utilities and partners in the industry to bring some of these technology solutions, to find locations to start to unlock more power capacity, to enable time-to-market scale and sustainable solutions, for these customers. We want to help on the orchestration side to solve, when, where, and how we can create, scale, and runway for these companies.

CTVC: What does the business model for Cloverleaf look like?

Brian: Our structure is a private equity-backed fund model. We raised a line of equity of a few hundred million dollars, between primarily two investors. We create value by buying land and dollars per acre, and selling in dollars per megawatt, by creating time-to-market density and scale. And with a line of sight to clean energy — that's where the valuation comes from in that portfolio.

Deals of the Week (7/15 - 7/21)

Late-Stage / Growth

⚡ LevelTen Energy, a Seattle, WA-based renewables PPA marketplace, raised $65m in Series D funding from B Capital Group, Aster, Constellation Energy, Google and Zoma Capital.

🌾 GrowUp Farms, a Bristol, UK-based vertical farms company, raised $49m in Growth funding from Generate Capital.

🚗 Infinitum Electric, an Austin, TA-based air-core PCB motors manufacturer, raised $35m in Growth funding from Marunouchi Innovation Partners and Rice Investment Group.

⚡ Heimdall Power, an Oslo, Norway-based advanced power grid sensing technology developer, raised $25m in Series B funding from Orlen, Eviny, Steinsvik Family Office, Hafslund, Investinor, and other investors.

☀️ Naked Energy, a Crawley, UK-based solar thermal collector, raised $22m in Series B funding from Barclays and E.ON.

🔋 Lyten, a San Jose, CA-based advanced materials developer, raised an undisclosed amount in funding from Luxembourg Future Fund 2.

Early-Stage

💨 Again Bio, a Copenhagen, Denmark-based carbon-negative chemical production platform, raised $43m in Series A funding from ACME Capital, Atlantic Labs, EIFO, GV, HV Capital, and other investors.

💨 44.01, a London, UK-based mineralizing CO2 into rock platform, raised $37m in Series A funding from Air Liquide Venture Capital, Alumni Ventures, Amazon Climate Pledge Fund, Breakthrough and Climate Investment.

🥩 Digestiva, a Davis, CA-based protein digestion enzyme technology developer, raised $18m in Series A funding from Astanor Ventures, Magdalena, The March Fund, and UC Investments.

💨 NovoNutrients, a Sunnyvale, CA-based CO2 to proteins developer, raised $18m in Series A funding from CM Venture Capital, Woodside Energy, Audacy Ventures, Decarbonization Consortium and SOSV.

🥩 Onego Bio, a Helsinki, Finland-based animal-free egg white protein developer, raised $15m in Series A funding from European Innovation Council.

🚢 ACEL Power, a Vancouver, Canada-based electric boat developer, raised $10m in Series A funding from Tau Capital.

⚡ Marathon Fusion, a San Francisco, CA-based fusion power technology developer, raised $6m in Seed funding from 1517 Fund, Anglo American, Malcolm Handley, Shared Future Fund, Übermorgen Ventures, and other investors.

🌾 ExoFlare, a Sydney, Australia-based biosecurity risk management & software platform, raised $5m in Seed funding from Salus Ventures, Cultiv8 Funds Management, In-Q-Tel, Precision Group, W23, and Wollemi Capital.

💧 Boon, a Gurgaon, India-based water purification technology developer, raised $5m in Series A funding from Roca Group Ventures.

🌾 Mitti Labs, a Mumbai, India-based AI-led rice monitoring services provider, raised $3m in Seed funding from Lightspeed Venture Partners, Overview Capital, and Voyager Ventures.

⚡ Rhizome, a Washington D.C., DC-based grid resilience software platform, raised $1m in Seed funding from Convective Capital.

💨 Bio-Logical, a London, UK-based nature-based carbon removal services provider, raised $1m in Series A funding from CrossBoundary Group, Redshaw Advisors, and Steyn Group.

Other

🏠 Cloverleaf Infrastructure, a Seattle, WA-based clean power data center campus developer, raised $300m in funding from NGP Energy Capital Management and Sandbrook Capital.

💧 SaltWork Technologies, a Richmond, Canada-based water treatment and lithium processing services provider, raised $5m in Grant funding from Natural Resources Canada.

🔋 Ore Energy, a Delft, Netherlands-based long-duration iron-air batteries manufacturer, raised an undisclosed amount in funding.

⚡ Ohmium, an Fremont, CA-based PEM electrolyzer-based green hydrogen producer, raised an undisclosed amount in Corporate Strategic funding from 3M Company.

⚡ Ionna, a Torrance, CA-based EV charging solutions platform, raised an undisclosed amount in Corporate Strategic funding from Toyota.

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In the News

The European Commission's current president, Ursula von der Leyen, won a second term, and indicated her intent to continue to pursue environmental policies for the bloc. Meanwhile, US president Joe Biden announced he would not seek reelection, clearing the way for VP Kamala Harris, who has a solid climate record, to run.

Plus, former president Trump chose a notoriously anti-clean energy politician, J.D. Vance, as his potential VP. He has a history of pushing fossil fuel interests and culture warrior talking points around the transition to electric vehicles and clean energy.

In other government news, the DOE unveiled a new AI-focused program, Frontiers in Artificial Intelligence for Science, Security and Technology (FASST). The initiative, within the Office of Critical and Emerging Technologies, aims to establish US government leadership in the AI sector and boost national security, as well as address related energy challenges like clean firm power and grid resilience.

Back across the pond, after Labour’s win in the UK General Elections, the King’s Speech unveiled a slew of new climate-related legislation, including a national wealth fund for green investment and a new state-owned clean power production company. Planning reform is at the heart of its legislative agenda, and aims to create a “solar revolution.” It also proposed a new revenue support mechanism for SAFs.

Speaking of SAFs, amid a recent string of SAF project cancellations, Oceania Biofuels canceled its planned $334m biofuels project in Queensland, Australia. The high-profile SAF and renewable diesel plant was supposed to begin production in 2025.

With the microscope off of global plastic pollution, Shell has backed away from its backs away pledge to increase the “advanced recycling” of plastics. Similarly, with the Chevron doctrine overturned in the US, hydrogen tax credits are in question — and Australian mining giant Fortescue laid off employees and cut two green hydrogen projects.

However, the US government has kept pouring money into new hydrogen projects, as the DOE announced the official signing of a landmark $12.6bn agreement to build a Hydrogen Hub in California. Meanwhile, in the EU, the European Court of Auditors published a scathing report criticizing the complexity and length of implementation of European hydrogen legislation.

Amazon announced in its latest sustainability report that it has achieved 100% renewable-powered operations, seven years ahead of schedule — but Amazon employees publicly questioned these claims, pointing to the use of renewable energy credits (RECs). The disparity highlights the risks of using RECs vs. going for 24/7 operational power — Amazon faces criticism for not being fully renewable, while Google hasn’t been able to hit its higher standard.

The Kazakhstan government announced plans to gradually increase uranium extraction taxes from 6% to 18% beginning in 2025. This substantial increase from the world’s largest producer of uranium comes as the material increases in importance amid the rise of SMRs.

With more and more critical minerals needed to power the rise of electrification and power-hungry AI, while mines are taking longer and longer to build, the UN’s International Seabed Authority has resumed negotiations around rules for deep sea mining.

Pop-up

(F)under the Weather: Sightline’s Kim Zou and Sophie Purdom discuss the tough climate tech fund fundraising conditions, and what it means in the context of teh broader venture slump.

Need for speed: Climate tech founder calls on SBTi to provide swift and decisive guidance on carbon credits for Scope 3 abatement.

Energy Gooooooals: Great Britain’s National Grid ESO observed some interesting trends in British energy usage during the Euro Finals.

How the Taliban is reconciling religion and climate change.

Not all that glitters is gold: Aspiration, a green consumer finance startup with a star-studded investor list, is under scrutiny from auditors and regulators.

The world revolves around climate change: New study finds that polar ice cap melt lengthens the Earth’s rotation by milliseconds each day.

Commercial nuclear fusion could be the next scientific race between the US and China, with China spending twice as much as the US.

The Fusion Industry Association (FIA) released its 2024 Annual Global Fusion Industry Report.

The US General Services Administration (GSA) will test 17 cutting-edge climate technologies in US federal buildings, like prefab ceiling tiles and microgrids.

No friend of mine: S&P Global Market Intelligence releases a report showing US mines have longer development times and face more uncertainty towards successful operation.

The UK Climate Change Committee (CCC) published its annual report on the UK’s progress towards 2030 climate targets, noting key areas the UK has fallen behind pace.

We were promised flying cars: Can eVTOL finally take off?

Opportunities & Events

📅 Twilio.org Climate Tech Prize: Are you using technology to boost climate resilience in frontline communities? Apply now for the Twilio.org Climate Tech Prize! The Twilio.org Impact Fund is investing $1 million in five entrepreneurs or organizations creating climate technology solutions that tackle immediate and long-term challenges, including migration and displacement. Don't miss this opportunity. Deadline to apply: August 14th.

📅 Climate Tech in the City: Join the Climate Tech in the City event in Boston on July 24th for an opportunity to connect with others in the local climate tech community and enjoy summertime games.

📅 Watt It Takes: Register to join a happy hour and live podcast recording of Watt It Takes on July 24th hosted by Powerhouse, featuring Matanya Horowitz of breakthrough AI and robotics startup sorting mixed material waste, AMP.

📅 Climate Base Fellowship Info Session: RSVP to join the Climate Base Fellowship Info Session on July 25th for an opportunity to learn about the cohort 6 application process and hear about the experience of past cohort participants.

💡 Joules Accelerator: Apply to the Joules Accelerator by July 26th to join the 14th Cohort and access support scaling your climate tech startup through corporate partnerships, customer introductions, and mentorship.

💡 5050 Accelerator: Apply to the 5050 Accelerator by August 15th to receive mentorship and support building your breakthrough research and science into a successful deep tech startup.