Our Investment in Paces
Our Investment in Paces
Accelerating clean energy development
The US has myriad clean energy projects planned, with over 2,000 gigawatts of proposed wind, solar, and battery projects proposed. These projects in the pipeline provide enough power to achieve 80% carbon-free electricity in the US by 2030. There’s only one catch: the majority of these projects won’t get built. Poor due diligence, slow transmission construction, high interconnection costs, and long wait times are major blockers. These issues result in 80% of renewable energy projects stalling or failing before construction even begins.
At MCJ we recognize that a fully electrified economy requires trillions of dollars worth of energy infrastructure to be built quickly and efficiently. However, inefficiencies and a lack of transparency in site origination and due diligence processes need to be addressed to fully realize this potential. Critical data including spatial, zoning, permitting, interconnection, and environmental metrics has been historically elusive and manually handled. It’s no wonder that wind, solar, and battery projects take years to be plugged into the grid if they aren’t stalled or withdrawn completely. Action is needed to bring clean energy technology to market or we risk major setbacks in our decarbonization efforts.
Paces offers a solution by addressing these critical inefficiencies with its advanced tooling and platform. Paces condenses site selection and due diligence from months to minutes, dramatically improving efficiency and transparency. We are thrilled to announce our participation in Paces' successful $11 million Series A funding round.
What is Paces?
Paces' platform reshapes the landscape for green developers by transforming how project sites are selected and managed. By seamlessly integrating comprehensive environmental, permitting, zoning, and energy grid data, Paces leverages advanced AI to highlight the most viable locations for development. With features like Project Search and Permitting Predictor, the platform simplifies the intricate process of risk assessment and site vetting. The software Paces is building accelerates the pace of constructing vital clean energy infrastructure, empowering developers to expedite their groundbreaking projects with unprecedented efficiency. Paces will enable more successful projects while lowering development soft costs.
Why We Invested
Massive and Growing Market
With its latest product expansions, Paces now serves the entire clean energy infrastructure, addressing the market's generation and load sides. On the generation side, Paces supports a wide range of green development projects, including solar, wind, battery storage, and other renewable energy sources. On the load side, Paces caters to critical industries such as data centers, EV charging infrastructure, cold chain distribution, manufacturing, and more.
Green development in the US is a $10B total addressable market in soft costs - consulting, permitting and various software solutions. The U.S. Energy Information Administration (EIA) projects that across all cases, compared with 2022, solar generating capacity will grow by about 325% to 1019% by 2050, and wind generating capacity by about 138% to 235%.
Worldwide, the International Energy Agency (IEA) projects that “global energy investment is set to exceed USD 3 trillion for the first time in 2024, with USD 2 trillion going to clean energy technologies and infrastructure. Investment in clean energy has accelerated since 2020, and spending on renewable power, grids and storage is now higher than total spending on oil, gas, and coal.”
According to Precedence Research, the global data center market stood at $229.23 billion in 2023. This market is projected to expand to $256.05 billion in 2024, and it is estimated to reach approximately $775.73 billion by 2034, representing a compound annual growth rate (CAGR) of 11.72 %. Expansion of AI over-indexes this growth, with Gartner forecasting 25.3% growth in data center systems, largely due to AI services and GPU-based specialized services for AI workloads. This explosion in “AI Data Centers” comes with intense power needs, and thus grid-integrated project development plans have become far more complex.
Arcane and Ineffective Legacy Solutions
The development phase for green and energy intensive projects comprises Siting and Due Diligence processes. These processes involve various poorly coordinated parties, including real estate agents, consultants, GIS analysts, lawyers and grid interconnection engineering specialists. While there are a few software-based point solutions, most of the work is still done with spreadsheets and notebooks. These approaches lack historical data and fail to consider pending regulations and the interdependencies among various permitting agencies at the local, state, and federal levels. This often results in generic siting based on limited and outdated data, which is a major cause of project failures. Paces addresses this gap by offering an integrated, purpose-built solution to manage the development phase of green projects.
Compelling Founder-Market Fit
Leading the charge as CEO of Paces, James McWalter brings over 15 years of tech industry experience. As the first employee at Hello Vera, an AI startup later acquired by Google, James honed his skills in enterprise SaaS sales across various sectors. He also hosts the Build, Repeat Podcast, engaging in deep, insightful conversations with climate-focused founders and investors. Raised on a sheep farm in Ireland and armed with a graduate degree in philosophy, James combines a grounded upbringing with a sharp, inquisitive mind.
Charles Bai, Co-founder and CTO of Paces, spearheaded AI efficiency at Facebook AI, focusing on large model inferences and developing metrics to track power and carbon costs of AI models. Prior to Facebook, Charles gained valuable experience at various startups, creating data-intensive software solutions. Originally from Beijing, Charles holds a Computer Science degree from Cornell, blending his global perspective with technical prowess.
Conclusion
Paces is building an automated workflow solution for green project developers that utilizes AI to help users make better and more well-informed decisions, which is already leading to greater success rates and lower development costs. As they continue to add more clients and projects, Paces is building a compounding moat with the largest repository of current as well as historical data on zoning and permitting regulations, interdependencies and nationwide community context. These assets will allow Paces to expand into more use cases over time.
We look forward to supporting James McWalter and Charles Bai as they accelerate clean energy development.
Additional Resources