Why NGP ETP Invested in LevelTen Energy

In August 2021, NGP ETP led the $35 million Series C financing of LevelTen Energy (“LevelTen”).

We need to remove development bottlenecks, build five times more wind and solar energy every year

Wind and solar are now the lowest-cost new power source for two-thirds of the global population.[1] In 2020, wind and solar represented ~85% of global additions of power generating capacity;[2] however, to reach net-zero by 2050, annual capacity additions need to be at least five times higher than current development rates.[3] Limited transmission capacity is a well-known bottleneck to development, and one that is hard to resolve quickly. There is another lesser-known bottleneck that slows market growth—matching buyers and sellers of renewable energy. While there are an unprecedented number of parties interested in (a) developing renewable energy projects, (b) financing renewable energy projects, and (c) buying renewable energy, transactional inefficiencies plague the market.

LevelTen provides transaction infrastructure that makes buying and selling renewable energy, and the underlying projects, much easier

The current approach to buying and selling renewable energy (electrons and projects) is not scalable—almost every deal is bespoke, almost every deal is negotiated bilaterally, and transactions often take more than a year. The industry lacks a functioning, liquid market – characterized by centralization, standardization, transparency, and automation. LevelTen’s goal is to change that with cloud-based software, automated analytics, and improved deal standardization.

LevelTen’s core product, the Energy Marketplace, is now the world’s largest online hub for utility-scale renewable energy procurement, connecting a network of consultants, retail electricity providers, and corporate energy buyers with more than 500 project developers. The transparency and analytics provided by the Energy Marketplace have already streamlined the power purchase agreement process. Plans for continued contract standardization will further improve market liquidity over time. Importantly, LevelTen’s platform is expanding the universe of qualified buyers – allowing businesses without the dedicated procurement resources of a Google, Microsoft, or Amazon to buy clean energy without undue cost and/or risk.

LevelTen’s market-leading liquidity creates value for users

LevelTen currently has 70% of all project developers in North America and Europe on its platform, 4,000 pricing offers from 1,800 projects across 21 countries, and more than 30 demand-side channel partners (consultants, banks, and retail electricity providers).

With such an expansive base of market participants, LevelTen can launch complementary products that enhance the value proposition of the entire ecosystem. The company released two new products in 2021, the Asset Marketplace and Performance Monitoring, and we see tremendous synergies from several in-development products that take advantage of LevelTen’s unique market position and data.

We are proud to partner with LevelTen Energy

Bryce Smith and the rest of the LevelTen management team bring passion and valuable experience in building and scaling project development and software businesses. We are excited to support Bryce and his team as they work to deliver much-needed efficiency to renewable energy markets.

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Learn more about LevelTen Energy: https://www.leveltenenergy.com/

About NGP ETP

NGP ETP focuses on investments that are part of the global transition toward a lower-carbon economy. NGP ETP partners with top-tier management teams and invests growth equity in companies that drive or enable the growth of renewable energy, the electrification of our economy, or the efficient use of energy. Founded in 2005, NGP ETP is one of the most experienced energy transition investors in the industry.

For additional information, visit www.ngpenergycapital.com/energy-transition or contact the NGP ETP energy transition team at info@ngptrs.com.

 

[1] BNEF: “Executive Factbook 2021” (March 2021)

[2] IRENA: “World Energy Transitions Outlook” (June 2021)

[3] BNEF: “New Energy Outlook 2020” (October 2020) – statistic based on NEO Climate Scenario