Bill Gates has become a real life superhero who is out to save the world from climate change. The Microsoft (NYSE: MSFT) founder has even organized his own version of the Justice League – a league of billionaires – to fight for clean energy.
The league will take the form of a $1 billion hedge fund called Breakthrough Energy Ventures or BEV. The purpose of BEV will be to commercialize new technologies that will reduce greenhouse gas emissions, Quartz reported. Focuses will be electricity generation, electricity storage, transportation, manufacturing, agriculture, and energy efficiency.
“Anything that leads to cheap, clean, reliable energy we’re open-minded to,” Gates said of BEV’s goals. Areas that could cover include nuclear fusion, nuclear fission, batteries, electric cars, wind, solar panels and next generation transportation technology such as the Hyperloop.
Billionaires of the World Unite
Gates who will serve as BEV chairman has recruited a dream team of super-rich entrepreneurs to back his venture. Names mentioned as directors so far include Alibaba’s (NYSE: BABA) Jack Ma, Mukesh Ambani of Reliance Industries, Sun Microsystems co-founder Vinod Khosla, Silicon Valley venture capital pioneer John Doerr, and Hasso Platter of SAP.
Initial investors include Jeff Bezos, Sir Richard Branson, Masayoshi Son of Softbank, Michael Bloomberg, George Soros, Meg Whitman, Mark Zuckerberg and his wife Dr. Priscila Chan, Ratan Tata of the Tata Group and Prince Alwaleed bin Talal, a member of the Saudi Royal family.
Interestingly enough one name that is not mentioned is Gates’ long time best buddy and bridge partner Warren Buffett. Another is Buffett’s sidekick Charlie Munger.
Quartz estimated the worth of the BEV directors at $180 billion. The BEV is the second group of super-rich clean energy promoters Gates is involved in he’s also a leader of the Breakthrough Energy Coalition a loose alliance of the super-wealthy dedicated to the same goal.
Interestingly enough BEV will operate a lot like a traditional venture capital organization complete with an office in Silicon Valley. Quartz reported that Gates hopes to launch a number of different funds to invest in a variety of ventures.
Bill Gates might Commercialize Hot Fusion
The purpose of the BEV is to give the Coalition members a vehicle to make investments through. The fund will finance research and companies trying to commercialize new technologies.
A major goal will be to commercialize technologies being developed at research universities such as MIT’s Alcator C Mod hot fusion device. Another goal is to broaden clean energy research and investment; which so far has focused on green technologies such as solar rather than hard-science steapproaches like fusion and nuclear fission.
It sounds as if Gates has been listening to one of the men behind the Alcator C, Dennis Whyte the head of MIT’s Nuclear Science and Engineering Department. Whyte thinks it will be possible to build a working hot fusion device with off-the shelf technology within 10 years.
The BEV is designed to last for 20 years and make patient investments in energy technology. It can take a long time develop energy technologies. Germany’s Max Planck Institute has been working on the stellerator hot fusion device for around 20 years and is only now testing a prototype.
Is it Altruism for Profit?
The BEV and Gates’ own $1 billion investment in clean energy research is not as altruistic as you might think. Gates and his fellow billionaires would generate vast amounts of cash if they were to commercialize hot fusion or a better battery technology.
There is a $6 trillion global market for energy, the BEV estimated. That market is expected to grow by one third between now and 2040 which will create vast new opportunities for profit.
The league members would be in a position to get in on the ground floor of new technologies. They would be the first to get the stock options or to make private equity investments in new companies.
Next Generation Value Investing
“It’s such a big market that the value if you’re really providing a big portion of the world’s energy, the value of that will be super, super big,” Gates himself pointed out.
The operative word here is value, Gates is a famous value investor and a loyal follower of Warren Buffett. Gates’ investments include a 14% stake in the Canadian National Railway (NYSE: CNR) which makes him the largest shareholder in a company’s that highly dependent on fossil fuels. The CN’s trains are pulled by diesel engines and they haul coal.
This means we can see safely describe BEV as a next-generation value investment in the infrastructure of the future. Gates can be described as a sensible, well-informed and hard-nosed investor with a lot of vision. Gates operates what amounts to a major investment which is intended to finance his charitable foundation.
We can also view the league members as astute technocrats who are out to control the technology of the future. This is likely to lead to opposition from those who profit from established energy sources and average people who are suspicious of technocracy. There will be a lot of resentment if the new energy sources make the super-rich even richer and worsen income inequality.
Gates made his fortune by investing in an essential component of a disruptive new technology: software. He hopes to do the same for energy which will take a lot longer.
An interesting possibility is that Gates sees energy today as being like software and computers were in the late 1970s about to take off. Few people predicted or foresaw the computer explosion of the 1980s, but Gates was one of them.
Bill Gates is cashing in on Climate Change
Gates also sees correctly that climate change will increase the demands for new energy sources and the money that can be made from theme. Entire countries like Germany are moving to scrap the internal combustion engine which would greatly increase the demand for electricity.
German politicians want to switch to all electric cars by 2030, if Gates were to be on hand for that with a working fusion reactor he would make a fortune. Since fusion produces no pollution it would be the ultimate antidote to greenhouse gases.
It is too still early to see if BEV can change the world but I wouldn’t bet against Bill Gates. He has a dream team of the super-smart and the super-rich on his side and an incredible amount of money. If they cannot save the world nobody can.