Mario Fernandez, head of Breakthrough Energy Catalyst, explains why licensing strategies typically fail for novel climate infrastructure technologies.
Assertion Supported
Fernandez: Large EPC firms stopped offering lump sum turnkey contracts post-COVID
“The reality is the EPC CapEx world changed dramatically after, after COVID, right? Things that used to be very secured, large scale EPC companies that used to be able to give you a, you know, lump sum turnkey contract are just not doing that anymore in, in con…”
Insight
Fernandez: FOAK scaling is limited by technical risk skills, not capital
“Our contention is that capital is an issue, but the biggest issue is the skill set that is required to be able to help the companies see a risk and really assess the risk of that big construction operation of first of a kind.”
Insight
Fernandez: FOAK project investors require six-plus months of demo runtime
“At the end of the day, the investors that come in at the Series C, Series D, you know, most of the time funding or partially funding first of a kind projects, they really want to see six months or more, or performance.”
Insight
Fernandez: Startups risk failure by fixing offtake prices before FEED engineering
“Many times Off-takes are priced in a way before engineering, you know, failed one, failed two, engineering have been done, and it's based on optimistic CapEx assumptions. Now, when the companies go through the engineering process, and they actually get to a fe…”
Assertion Not checkable as stated
Fernandez: FOAK climate projects cannot secure project-level debt
“As far as debt goes, we haven't seen it. We've seen people be able to raise debt at the corporate level via, via venture debt or via corporate debt. Now, those are very low leverage numbers, right? They're not the 80, 95% that, you know, you will get in solar.…”
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Fernandez: $60B–$70B infra funds have 15-year track records without project losses
“There is 70, 60, seventy billion dollar infrastructure funds that have a 15 year track record that have never lost money on any project they've invested in.”