Why the World is Watching Houston's Remarkable Energy Transition
Why the World is Watching Houston's Remarkable Energy Transition
by Jeremy Pitts, Managing Director of Activate Houston
Most people would agree that Houston is the Energy Capital of the World. But how does that leadership position translate into the energy transition?
Houston, the United States’ fourth largest city, is an industrial powerhouse with several claims to fame. It boasts the largest life science complex in the world: the Texas Medical Center. It is home to NASA’s Johnson Space Center and was responsible for putting a man on the moon. This is a city that knows how to solve hard problems.
Houston is a city that knows how to build things, which will be critical to the energy transition—nearly 7,000 manufacturers call Houston home, responsible for over $80B in regional GDP and placing Houston as the second-largest metro area for manufacturing GDP. Houston has a talented and diverse workforce. Nearly 750,000 Houstonians have science and engineering degrees and the city has the seventh largest concentration of engineers. It has also been ranked as the most diverse large city in the country, offering a tremendous amount of different perspectives and experiences.
Houston now has the opportunity to rise to the level of more traditional startup hubs like Boston, New York, and Silicon Valley and become a true leader in climate tech. I believe all the pieces are in place. That’s why we at Activate, a nonprofit that helps scientists and engineers become founders and bring their innovations to market, recently announced our new Activate Houston Community.
Changing Perceptions
A major hurdle Houston needs to clear involves persistent stereotypes. Despite narratives that often paint Houston as a bureaucratic, corporate town focused on preserving the status quo in the energy industry, it is, in reality, a cutting-edge city that carries on the spirit of wildcatters—early explorers who ventured into the unknown hoping to create something big. Incredible energy innovations and a superb engineering ecosystem have risen out of this tradition.
Houston has also been plagued by an “us vs. them” mentality when it comes to energy. Right or wrong, some believe that big oil and gas companies in Houston represent the status quo, while sustainable solutions and innovation only come from places like Boston and Silicon Valley. But perceptions are changing, with both sides agreeing that the traditional energy players will play a large role in the energy transition.
Another significant challenge remains: access to early-stage capital for energy transition startups. While corporate venture groups have existed within oil and gas companies for many years (Chevron Technology Ventures, for example, was created in 1999), they have historically invested in technologies that represent a strategic fit for their core business. Forward-thinking cleantech investors (as they used to be called) have been clustered on the coasts and have not traditionally ventured into Houston.
A Shifting Funding Landscape
There is evidence of a rapidly changing attitude in the region. Traditional energy companies are realizing that participating in the energy transition is good business—a departure from past attitudes. These companies’ expertise, reach, and resources will be essential to the energy transition. This is contributing to a palpable energy in the air (pun only slightly intended). I was involved in the founding of Greentown Labs, now the largest climate-tech startup incubator in North America, back in Boston over a decade ago, and I feel a similar energy building in Houston today. The City of Houston and Rice University have partnered to begin development on a downtown innovation district. The Ion and Greentown Houston have sprung up so far, providing a central hub for energy innovators and investors. Coastal investors are now showing up at Houston events, and organizations like the HX Venture Fund and the Greater Houston Partnership are working hard to attract more investors to come take a look at Houston startups.
Corporate investors are now allocating astounding sums to climate-focused venture funds, including $1.5B from Saudi Aramco, $1.4B from Shell, $750M from Equinor, and $400M from Chevron, and those dollars are being deployed in meaningful ways. Perhaps most importantly, several local success stories are in the process of being written—inspirational climate-tech founders like Activate Fellow alum Tim Latimer (Cohort 2018), whose company Fervo Energy has raised over $200M and is working on a 400-megawatt geothermal project. Other companies like Cemvita, Syzygy, and Solugen are also making incredible progress in building climate-tech companies in Houston.
How can Houston lead the energy transition moving forward?
Moving forward, organizations like Activate will help build on the momentum for change (and fill in some of the gaps). Activate offers support for scientists at the earliest stages of starting companies to develop innovations that will combat climate change and many other global challenges. This support helps entrepreneurs push past early-stage funding gaps and take the company to a point where it can attract private investment. Activate selected Houston for its latest expansion because of the reasons outlined here, and we are excited to be a part of building the Energy Transition Capital of the World. If you have a world-changing innovation that benefits from all that Houston has to offer, apply to become an Activate Fellow. Applications for Cohort 2024 are open now and close on October 17, 2023.
🍿 The Lean Back
Hear how Electra is working to decarbonize steel in the latest Startup Series with Cody Simms.
🎙️ My Climate Journey Podcast
☀️ Cody sat down with Julia Souder, CEO of the Long Duration Energy Storage (LDES) Council, to discuss the merging need for energy storage, historical and new categories of LDES solutions, plus what needs attention, and the evolution of capital for LDES. Listen to the episode here.
💸 Jason talked to Christian Hernandez, Partner and Co-founder at 2150, about his journey to building the firm, its focus on the built environment, and where they’re heading in the future. Tune in to the Capital Series here.
🔥 The co-founders of Electra, Sandeep Nijhawan and Quoc Pham, came on the show to talk about their solution for decarbonizing steel. The episode also explores various pathways for steel decarbonization, including point-source carbon capture and hydrogen utilization, and introduces Electra's pioneering electrochemistry method. Listen to the Startup Series here.
👩💻 Climate Jobs
For more open positions, check out the #j-climatejobs channel in MCJ Slack as well as our MCJ Job Board.
Accountant at BlocPower (New York, NY)
Safety Manager at Charm Industrial (San Francisco, CA)
Head of Sales at Crusoe Energy (Arvada, CO)
Customer Engineering Manager at Enode (Remote/Europe)
Engineering Technician at Lightship (San Francisco, CA)
Product Designer at Span.IO (San Francisco, CA)
Head of People at WeaveGrid (San Francisco, CA)
✨ Community Highlights
Uptake Alliance is a 6-month, no-cost, no-equity program tailored to startups’ needs, helping land commercial deals, grow revenues, and build holistic funding strategies. Funded by NYSERDA, our digital program is New York-based but solving global challenges. To learn more, join our upcoming webinar. Applications for our first Collective close on October 27th.
🗓 Climate Events
🇨🇦 MCJ Toronto Climate Series - Regenerative Agriculture Unearthed: Interested, curious, or passionate about climate? Join us for networking, learning, and a night full of fascinating conversations! (Oct 5)
♻️ MCJ Learning Sprint: Circular Economy. Designed to bring members together around one central topic every month, via 10-15 diverse resources curated by an expert. (Oct 6)
💡 MCJ Monthly Idea Jams: These sessions provide a chance for MCJ members to get help with roadblocks, meet co-founders or future employees, connect with investors, or people working on similar topics. (Oct 6)
👩💻 MCJ + Climate People Climate Career Advancement Meetup: Join us for an enlightening session with Drew Wilkinson, climate activist, community organizer, and co-founder of Microsoft’s 10,000 member sustainability community. (Oct 11)
🌇 Urban Heat Islands Learning Session: We’ll be having a semi-structured roundtable discussion, with some prompt resources. (Oct 12)
📚 MCJ AMA Anshuman Bapna - Terra.do: Anshuman is a serial entrepreneur. Terra.do is on a mission to get 100 million people to work on climate this decade. Get your questions ready or use our form to submit them in advance. (Oct 18)
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