Four climate investors explain the new boom at CERAWeek panel

Clean energy is attracting billions of dollars in investments, but as the pace and scope of the transition to a greener economy accelerates, experts say the trend is just getting started.

“I think we’re early days,” Eli Aheto, managing director at BeyondNetZero, said recently at CERAWeek. “There is still a good amount of room to add more and more capital into this theme,” he added, noting that the “theme” itself is broad and encompasses a host of different technologies across industries.

Aheto, alongside three others with climate investing expertise, came together for a panel called Financial Innovation’s Growing Role in Climate & Cleantech. The panel was one among many focused on the renewable energy side of the equation at a conference in Houston that was once focused squarely on oil and gas.

In 2021, global venture capital funding for clean tech hit $43 billion, more than double 2020’s $20 billion, according to data from PitchBook. A separate study from PwC found that when other forms of financing including private equity are included, $60 billion was raised during the first half of 2021 across more than 600 deals.

Brad Fierstein, a partner in the infrastructure group at Apollo, said funding for the space has returned with a “vengeance.” 

Interest in clean tech began to accelerate in the mid-2000s when oil and natural gas prices were rising and money was cheap. But then the financial crisis hit. Ultimately, more than half of the $25 billion in venture capital funding that went to clean tech between 2006 and 2011 was lost, which led to investors shying away from the space.

But even now, Fierstein said the amount of money chasing the space is “a drop in the bucket in terms of the scale of the opportunity.” This is both when it comes to the necessity to accelerate clean technologies, as well as the large opportunity set across investments.