February 2024 Newsletter

PORTFOLIO HIGHLIGHT

Rain and Sikorsky demonstrate autonomous early detection and rapid response to wildfires

Rain, in collaboration with Sikorsky (a Lockheed Martin company), demonstrates the capability to quickly detect fire ignition and autonomously dispatch a helicopter to extinguish the flames. In the demonstrations, Rain equipped a Black Hawk helicopter with Sikorsky’s autonomous flight control system and Rain’s wildfire detection and response software. The success marks a huge step forward for the world of firefighting and wildfire management. Check it out!

Sikorsky President describes how collaboration with Rain enables Lockheed Martin's broader goals in firefighting in the State of Sikorsky Address:

This demonstration is the beginning of an expanding engagement with not only Sikorsky but a range of fire agencies seeking to enhance safety for responders and the community. Rain is built to adapt military and civil autonomous aircraft with the intelligence to perceive, understand, and suppress wildfires, enabling aircrafts to be prepositioned in remote locations to accelerate response time.

As Rain team says, “Every wildfire starts small.” Let’s try to keep it that way 😉 

PORTFOLIO

READING

Nine States set an MOU to Make Heat Pumps 90% of the Entire HVAC and Water Heating Market by 2040 (and 65% of Residential Buildings by 2030).

VoLo Earth: A boon for electrification and heat pump technology in general, (and some of our portcos!), showing us that many states believe that the technology is there to electrify heating, cooling, and hot water heating. Seeing this type of state-level collaboration corroborates a lot of the federal IRA’s benefits and only continues to solidify the scaling of heat pump technology. Utilities are taking note and are starting to plan for the increased demand from broad electrification accompanied by the energy transition, but the beauty of heat pumps vs. older electric sources of heating (baseboards, for example), is that they use anywhere between half to a quarter of the amount of electricity (via COPs of 2-4 vs. 1). These COPs, as well as heat pump cold and hot operating temps, are only improving with new innovations in the space.

Geologists Signal the Start of Hydrogen’s Gold Rush

VoLo Earth: In 2023, white hydrogen emerged as a potential game changer. NYT covered the situation with measured optimism;

Natural hydrogen, also called white hydrogen because of its purity, could be a game changer, scientists say, because it is a potential source of clean energy continuously generated by the earth. Hydrogen reservoirs form when heated water meets iron-rich rocks. According to the U.S. Geological Survey, just a small fraction of these deposits could provide enough clean energy for hundreds of years. - NYT

The Financial Times highlights that resource discoveries have persisted into 2024. At VoLo Earth, we’ve had the opportunity to get perspectives on the potential impacts of resource extraction from electric utilities, industry incumbents, and electrification startups. At present, we have updated our investment thesis in thermal storage and high temperature industrial decarbonization to account for competitive pressure from geologic (white) hydrogen. We are also looking at whether there is an early stage investment strategy into geologic hydrogen given that much of the needed discovery and use tools may be repurposed from oil and gas. So far, a majority of capital injected into the space has been in exploration, and for white hydrogen to develop a realistic supply chain, significant capital and infrastructure investment could also be needed.

Even ChatGPT Knows Hydrogen is a Square Wheel in Transport

VoLo Earth: CleanTechnica’s article echoes a number of VoLo Earth’s concerns regarding the hydrogen transportation sector, including the cost of hydrogen and quality of the hydrogen refueling station. But his reporting on maintenance of the vehicles is also a great example of why hydrogen transportation is currently not winning on economic merit. The author notes that “Hydrogen fuel cell bus fleets in the state were … seeing 50% more maintenance costs per year than diesel buses and double that of battery electric buses.” A prominent motivator for fleets to shift towards battery powered vehicles is the predicted reduction in maintenance costs compared to ICE vehicles. There are going to be a number of hurdles in electrifying our transportation, like grid connection and building new charging infrastructure. Fleet operators will be wary of taking the risk that the new vehicle they are purchasing will require more maintenance and downtime than their current fleet, making hydrogen transportation an example of a case where solving for the buyer decision will be a material obstacle to overcome for commercialization.

How Solid State Battery Could Transform Transport

VoLo Earth: We agree that solid-state batteries are worth the hype for the Mobility sector, offering a number of advantages over more widely used lithium ion batteries: solid-state batteries are nonflammable, yield high conductivity, high voltage stability and a more compact geometry, and reduce the need for cobalt and nickel sourcing. However, we also believe that the potential for solid-state batteries expands beyond EVs to transform defense & aerospace, consumer electronics and grid storage. This view aligns with our investment in portfolio company ION Storage Systems, developing solid-state batteries manufactured in the USA. The promise of (and resulting wait for) solid-state batteries has been extensive: the ability to scale manufacturing over the next several years will help address skeptic concerns and perhaps finally answer whether this sizable market will ever exist.