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Event Recap: MIT Energy Innovation Webinar Series

Benjamin Torda, Research Associate
June 9, 2020

Lux recently attended three webinars organized by MIT's Industrial Liaison Program (ILP) and Energy Initiative (MITEI). The webinar series focused on how the global COVID-19 pandemic is complicating the energy industry's already challenging transition toward a low-carbon future and on key technologies that will speed up decarbonization efforts. Speakers included MIT professors and startup founders connected to the MIT innovation landscape.

While the sessions touched on a wide range of topics, from nuclear fusion to battery mineral supply chains, some key takeaways are as follows:

Decarbonization is not a long-term problem but a challenge we need make major headwinds against in the next five to 15 years. 

Professor Robert Armstrong, the director of MITEI, highlighted that we are careening toward surpassing the carbon dioxide levels generally accepted as necessary to keep the Earth from warming less than 1.5 °C by 2027 and less than 2 °C by 2037. As a result, carbon capture and negative emissions technology will allow critical time to tackle more difficult-to-decarbonize industries like aviation and select industrial sectors. In addition, biofuels with carbon capture and sequestration would allow for expanded electrification with a much lower cost of carbon than other potential decarbonization pathways. This analysis matches our overall take: The energy transition must quicken its pace across both developed and developing economies – with the power sector leading the way on decarbonization to spur on deep electrification and provide time to develop new technologies that can tackle emission reductions in industries like steel and cement. 

Across all the sessions, a note hit on again and again was that one of the greatest threats to innovation from the COVID-19 pandemic is a slowdown in R&D investment.

Critically, the investment timeline into new and emerging technologies determines the learning curves for reducing costs and thus emissions, meaning that delays could increase the cost pathways of currently available and upcoming renewable technologies. Professor Chris Knittel of the Sloan School of Management highlighted that even one or two years of delay in investment can have significant consequences for capital-heavy technologies like those in the energy industry, which require cost reductions from learning curve drivers like economies of scale and installation know-how.

The clear message from all the startups was the need for a focus on scale from the very beginning, which presents a clear opportunity for established industry partners.

This focus on scale is critical from both a technological perspective, e.g., material costs and ease of manufacturing, and the organizational structure of the startup itself. As scaling is often the hardest challenge for startups, leading to the "valley of death," a robust organizational structure should be set up from the beginning to facilitate rapid scaling. Otherwise, a product will never reach the point where investors make a return and the technology can make dent in decarbonization. Companies with innovation strategies including strategic investments in startups should consider how, in addition to funding, providing manufacturing and process engineering and management expertise early on to portfolio companies can improve the chances of startup success. 

To summarize, the COVID-19 pandemic has shown us how sensitive the global economy is to disrupted supply and demand. While the speed and extent of disruption from a changing climate are uncertain, extreme weather and unpredictable secondary effects in the realms of politics and consumer behavior will certainly accelerate in the next decade and beyond. In this context, getting ahead of market shifts has never been more important. As the speakers in this webinar series pointed out, the major threat to the energy transition from the current pandemic is governments and companies delaying investment in decarbonization projects and research and development. The message from MIT was loud and clear: Invest now or pay the price later.





Free Access to our COVID-19 Resources

- Blog: Tech Scouting and Innovation Investing During Systemic Pandemics

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