Climate tech startups need strong techno-economic analysis (TEA)

Catalyst with Shayle Kann

We have a flash sale for Transition-AI: New York through October 9th. Use the code FLASH30 to get 30% off your ticket price to our event on AI + energy. Spots are limited, so don't miss out!

This might be our wonkiest topic yet: Techno-economic analysis, or TEA.

Before a startup has proven that its technology is commercially viable, it models how its technology would work. These TEAs include things like assumptions about inputs, prices, and market landscape. They help investors and entrepreneurs answer the question, will this technology compete?

TEAs are important to the success of an early-stage climate-tech company. And a lot of startups get them wrong. As an investor at Energy Impact Partners (EIP), Shayle and his team see a lot of TEAs—and have some pet peeves.

What can startups do to improve their TEAs?

In this episode, Shayle talks to his colleagues Dr. Greg Thiel, EIP’s director of technology, and Dr. Melissa Ball, EIP’s associate director of technology. They cover topics like:

• Bad assumptions about things like levelized cost of production
• Focusing on a component instead of a system
• Focusing on unhelpful metrics
• Using false precision—something Shayle calls “modeling theater”

Recommended Resources:

• Activate: Techonomics: Establishing best practices in early stage technology modeling
• Department of Energy: Techno-economic, Energy, & Carbon Heuristic Tool for Early-Stage Technologies (TECHTEST) Tool
• National Renewable Energy Laboratory: Techno-Economic Analysis

Sign up for Latitude Media’s Frontier Forum on January 29, featuring Crux CEO Alfred Johnson, who will break down the budding market for clean energy tax credits. We’ll dissect current transactions and pricing, compare buyer and seller expectations, and look at where the market is headed in 2024.