From cost-effective, 24/7 renewable electricity and heat to utility-scale energy storage, Gross’s trio of climate change combating companies — Heliogen, Energy Vault, and Carbon Capture — is offering investors attractive returns and the opportunity to solve climate change.
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Bill Gross, 1990s Dotcom Trailblazer, Is Now Betting on Green Energy
Swapping software for solar, investor sees similarities but also bigger challenges
Bill Gross’s Idealab has put $2 million of
seed money into a trio of renewable-energy companies.PHOTO: ANDREAS GEBERT/ZUMA PRESS
Oct. 6, 2020 9:00 am ET
Bill Gross bet early on the internet and got rich with a stable of startups. He’s hoping to be right
a second time in staking his money and reputation on green energy.
The pandemic, by decimating oil demand, crashing prices and challenging the economics of some fossil-fuel projects, has accelerated some industry moves toward low-carbon energy. In Mr. Gross’s view, it has also leveled the playing field for green energy’s drive to displace fossil fuels.
“COVID-19 could well be the cataclysmic event that is the turning point for renewable energy,” said Mr. Gross, who is 62 years of age.
Mr. Gross has amassed a fortune worth tens of millions of dollars through creating and betting on early-stage companies in such areas as e-commerce and paid search, with seven startups backed by his Idealab incubator achieving valuations north of $1 billion.
He is now focusing his efforts on developing green-tech unicorns, with Idealab putting $2 million of seed money into a trio of renewable-energy companies that have attracted a further $200 million of funding from external investors. Idealab holds a major, if not the largest, stake in each.
A Heliogen pilot project in
Lancaster, Calif., uses mirrors to reflect sunlight and generate intense heat suitable for
industrial purposes.
PHOTO: HELIOGEN
A prolific angel investor who nevertheless has to sometimes explain he isn’t the Bill Gross who co-founded Pimco—a recent article about the tech investor pictured the bond king—Mr. Gross says his interest in renewable power goes back decades. The fast-talking entrepreneur, who works out of Pasadena. Calif., paid his way through college by selling solar-panel plans in the back of magazines.
His most recent foray involves businesses for storing renewable energy, producing carbon-free industrial heat and capturing carbon dioxide.
One business, Energy Vault, uses towering cranes to stack blocks of compacted soil that store solar and wind power for use on cloudy or windless days. The company, which counts SoftBank Group Corp.’s Vision Fund among its investors, pitches itself as a solution to renewable energy’s storage problem. Its first commercial project, with the Swiss government, is now connected to that country’s grid.
Another Gross-backed company, Heliogen, uses mirrors to reflect sunlight at a target the size of a basketball hoop, generating the intense heat needed to make hydrogen, as well as steel and cement. Cement alone accounts for 7% of global carbon-dioxide emissions, according to the International Energy Agency.
Heliogen demonstrated its technology at a test site last fall, and Mr. Gross says he is now in talks with potential customers including heavy industry and foreign governments. Bill Gates was among Heliogen’s early backers.
Mirror Power
Heliogen claims its technology can generate a continuous power flow of 5 megawatts in good weather, enough to power more than 3,000 typical U.S. homes.
Carbon Capture Inc., with Mr. Gross’s support, has developed a technology that sits next to solar farms and traps excess carbon dioxide from the atmosphere. It recently raised money for a full-size pilot project and counts Marc Benioff, Salesforce.com Inc.’s CEO, among its other investors.
Mr. Gross, whose TED talk about the role of timing in a startup’s success has been viewed more than eight million times, hasn’t always timed his moves right.
He felt the brunt of the early 2000s dot-com bust, when some bets backed by Idealab, such as online women’s retailer eve.com, fizzled after its IPO was pulled. Investors also accused Idealab of breaching shareholder responsibilities when it doubled Mr. Gross’s salary as the boom soured. He denied wrongdoing.
Other misfires include Z.com, a YouTube forerunner, and electric-vehicle startup Tara, which lost out to Tesla in a quest for government funding.
Ben Rosen, an Idealab investor who once led computer maker Compaq, first met Mr. Gross at a trade show in the early 1980s and has since become a mentor. Mr. Rosen says Mr. Gross’s decision to cash in early on pay-per-click advertising technology—which has made billions of dollars for giants like Google—cost him his first shot at a place in the Silicon Valley pantheon.
Mr. Gross sees parallels between the internet bubble and today’s rush to invest in green energy. What’s different in energy, he says, is that supply and demand can’t be faked, whereas dotcom-boom companies could fudge and “fluff” their metrics.
“These projects are real, they have real internal rates of return, and they have real revenues,” he said. Renewable energy’s share of global electricity generation climbed to 27% in 2019, from 19% at the start of the decade, according to the IEA.
Bringing energy projects to market is harder than launching a website, Mr. Gross notes, and finding investors willing to pour money into research and development for large, long-term engineering projects has required more legwork.
The projects need backers “who care enough about the area so they’re willing to fund it before it exists,” the wiry Californian said.
Energy Vault and Heliogen, Mr. Gross’s most advanced projects, are twists on existing technologies made cost effective. In pursuing them, Mr. Gross is trying to solve problems in areas where others have failed, such as exploiting excess electricity produced by solar and wind farms.
Energy Vault’s cranes use excess solar and wind energy to build towers of 35-ton bricks. When that energy is needed, those bricks are dropped to turn a generator, creating electricity.
Previous attempts at the process used concrete bricks but they proved too expensive, while other physical options split apart. Energy Vault made breakthroughs both in using an adhesive that binds soil and rock, which is then encased in concrete, and by lifting those blocks from underneath to keep them stable.
Heliogen also offers a solution to an old problem. Previous attempts at concentrating solar heat used mirrors that were too large and acted like sails in the wind, misdirecting the sunlight they were meant to focus. Heliogen uses smaller mirrors, which catch less wind, and software that corrects for gusts at 30 frames a second.
Mr. Gross and other tech trailblazers explored the internet as new territory three decades ago. This time, he is entering a crowded field with numerous experienced competitors, including BP PLC and Repsol SA, which have pledged to become carbon-neutral in the coming decades and ramp up spending on green power.
It has taken a long time for the big players to embrace low-carbon energy, says Mr. Gross, but such projects are now attracting attention. “The incumbents are embracing it,” he said, “and they’re going to be my friends in this, not my enemies.”
Appeared in the October 7, 2020, print edition as 'Early Internet Investor Tilts to Green Energy.'
