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Financing Energy Innovation: The Need for New Intermediaries in Clean Energy

1
Precourt Institute for Energy, Stanford University, Stanford, CA 94305, USA
2
Global Projects Center, Stanford University, Stanford, CA 94305, USA
3
Department of Urban Studies and Planning, Massachusetts Institute of Technology, Cambridge, MA 02139, USA
*
Author to whom correspondence should be addressed.
Sustainability 2020, 12(24), 10440; https://doi.org/10.3390/su122410440
Received: 15 November 2020 / Revised: 9 December 2020 / Accepted: 10 December 2020 / Published: 14 December 2020
This study aims to advance the understanding of and address the valley of death that is significantly widening in the clean energy domain due to its financing challenges. We conduct a case study on three new investment vehicles in the US energy sector (First Look Fund by Activate, Prime Impact Fund by Prime Coalition, and Aligned Climate Capital), which set their missions to contribute to bridging the valley of death in clean energy. While three cases focus on different technological development phases, they raise a consistent point that investment opportunities (and risks) are not assigned to the appropriate investors. We argue that current financial intermediaries have failed to effectively channel funding sources to entrepreneurs, as we evidence network fragmentation and information asymmetries among investor groups and companies. Therefore, we propose three intermediary functions that can facilitate intelligent and effective information flow among investors throughout the entire energy technology development cycle. Our findings highlight the emergence of collaborative platforms as critical pillars to address financing issues among new energy ventures. View Full-Text
Keywords: energy innovation; financial innovation; entrepreneurial finance; valley of death; financial intermediaries; energy investing ecosystem; collaborative platforms; catalytic capital energy innovation; financial innovation; entrepreneurial finance; valley of death; financial intermediaries; energy investing ecosystem; collaborative platforms; catalytic capital
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MDPI and ACS Style

In, S.Y.; Monk, A.H.B.; Knox-Hayes, J. Financing Energy Innovation: The Need for New Intermediaries in Clean Energy. Sustainability 2020, 12, 10440. https://doi.org/10.3390/su122410440

AMA Style

In SY, Monk AHB, Knox-Hayes J. Financing Energy Innovation: The Need for New Intermediaries in Clean Energy. Sustainability. 2020; 12(24):10440. https://doi.org/10.3390/su122410440

Chicago/Turabian Style

In, Soh Y., Ashby H.B. Monk, and Janelle Knox-Hayes. 2020. "Financing Energy Innovation: The Need for New Intermediaries in Clean Energy" Sustainability 12, no. 24: 10440. https://doi.org/10.3390/su122410440

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