Your November issue of Small Cap Investigator

Buy the start-up that’s cracked the code of emission-free gas plants

It’s just a blue cube.

Yet this translucent, pulsating blue cube powers pretty much everything you see around you.

From your toaster to your car to your laptop, simply place the blue cube anywhere in the nearby vicinity and it will be fully charged within seconds.

The cube is incredibly durable and never breaks, not even when it’s dropped on the ground or if a drink is accidentally spilled on it.

Best of all, you don’t even need to plug the cube in – it just sits there and makes power.

This blue cube of energy lasts between 50 years and forever.

But if you ever need more cubes, you can just pick some more up at your local “cube station”.

As a form of energy, it’s close to perfect.

It’s cheap…

It’s limitless…

… and it’s also 100% made up.

The genesis of the blue cube, alas, is not a laboratory working to develop the next big thing in energy generation but a 2015 “news” article from the satirical online newspaper The Onion.

The article is titled “Nation Figured Everything Would Run On Some Kind Of Cubes Of Blue Energy By Now”. It’s brilliant and hilarious, lampooning those who expect technology to have already delivered the perfect form of energy generation.

Here are the opening two paragraphs:

Expressing their disappointment and frustration at the current state of technology, citizens across the nation reported Thursday that they figured everything would run on some sort of cubes of blue energy by now.

Americans of all ages and demographic groups explained to reporters that they thought the cubes would be “basically everywhere you looked at this point,” saying they could not understand why translucent, pulsating blue cubes of energy did not yet exist, and why they were not currently being used to power appliances, lighting, various modes of transportation, and all manner of personal electronics.

As all good satirical articles should, this one struck a chord.

The energy market has long had its fair share of fantasy projects that chased illusionary goals but produced real-life pots of gold.

Certainly, there are some bizarre proposals for energy generation and storage out there that seem to come straight from the pages of a science fiction novel, from the wacky so-called zero-point energy principle which shows that a vacuum caused by oscillation still contains energy, to gravitational batteries that can involve crashing concrete blocks into the ground from 120 metres high several times a day.

Unfortunately, all too often energy fantasies are just that… fantasies.

The truth is, there is no perfect form of energy that can, right now, singularly meet all our needs, all at once, all the time, safely, cleanly and economically. Of the existing forms of power generation, nuclear can be expensive, coal and gas are dirty, while even clean wind and solar rely on the inherently unreliable weather.

This is not to say that energy developments can’t be transformational or mind-boggling, of course.

Who would have thought 15 or so years ago that the US would be forced to abruptly convert its liquefied natural gas import terminals to export facilities as it worked out how to unlock its huge reserves of shale gas, turning the world’s energy markets on their heads in one fell swoop?

Or even that renewables themselves would already have gained such a significant foothold in the UK and elsewhere, helping to increasingly drive coal off the grid?

What’s more, I’m a big believer in the possibilities of fusion power, which is the fundamental energy source of the universe that powers our sun and distant stars.

Where ideas once seemed impossible, or at the very least outlandish, they can in short order become the new norm or status quo.

Carbon capture moving from the energy market fringes

Indeed, this month’s recommendation is a play on an often-overlooked technology that has been around since the 1970s but has mostly been relegated to the fringes of the energy community, but it is now starting to move towards centre ground.

The technology involves catching concentrated industrial carbon emissions at their source, preventing them from entering the atmosphere, and then permanently sequestering the carbon – so-called carbon capture, utilisation and storage or sequestration (CCUS), often shortened to carbon capture and storage (CCS), or just carbon capture.

The “U” component of CCUS can mean that the CO2 is used as a feedstock for another industrial process such as fertiliser or construction materials, while the “S” component involves permanently storing the carbon dioxide deep underground by injecting it into saline aquifers or spent oil and gas reservoirs.

For a long time, carbon capture technology was considered a lot like the proverbial blue cube, being unviable on technical, economic and regulatory levels.

The earliest carbon capture technology was used for enhanced oil recovery, meaning the CO2 was pumped into an oil field to help oil companies retrieve more oil from the ground.

It wasn’t until the 1980s that carbon capture technology was studied for climate mitigation efforts, but even then, it was mainly via isolated projects.

Even now, there are now only a few dozen CCS projects worldwide, capturing around 40 million tonnes of carbon dioxide a year – the equivalent of only a tenth of the UK’s annual emissions.

Indeed, the International Energy Agency, in questioning whether it will be able to play a major role in the transition to net zero by mid-century, has said carbon capture has so far “not lived up to its promise”.

The main problem thus far has been price. After all, it’s much cheaper to let carbon dioxide go up the smokestack into the atmosphere than to put a chemical plant on the back of the plant to remove it.

Traditionally, even the best carbon capture technology has been reliant on putting a high price on carbon, which provides an economic cost to releasing carbon dioxide pollution into the atmosphere.

Efficacy is also a factor, with most current technology capturing only around 90% of carbon emissions at the most. Many struggle to reach even those levels.

Getting carbon capture rates to 100%, or very close, is perhaps the only way to make carbon capture actually compatible with net zero, though that has long proved to be very expensive.

In fact, a recent report by Imperial College London suggested that the amount of carbon locked up by the technology since 1996 may have been overstated by up to 30%.

In short, it’s true to say that carbon capture projects have been beleaguered by setbacks over the years, both technical and economic.

But all this is starting to change.

Led by climate science that suggests we are moving ever closer to a point where emissions must peak and start to decline, global policymakers around the world are now pushing CCS as a tool to cut emissions.

With carbon prices now entering the realm in which the technology potentially pays off, carbon capture is increasingly seen as a potentially key tool that will help power generators and industrial plants accelerate decarbonisation.

No wonder, then, that global carbon capture capacity is projected to rise more than sixfold by the end of the decade, with the US, in particular, looking to dominate this growing industry.

But of all the firms in the growing industry, one game-changing start-up looks like it’s well ahead of the pack.

In the early stages of commercial deployment, the company looks like it has cracked the code of emission-free gas plants and is able to offer a low-cost, clean and reliable replacement for coal and natural gas-fired electricity stations.

The company’s name is NET Power (NYSE: NPWR) and it is our latest Small Cap Investigator recommendation.

The latest Small Cap Investigator recommendation: NET Power (NYSE: NPWR)

Put simply, NET Power (NYSE: NPWR), founded in 2010, has developed a breakthrough power generation technology that makes it easy to capture carbon dioxide released by the burning of natural gas.

It’s basically an entirely new form of power plant: an economical natural gas plant that doesn’t emit carbon.

To do this, NET Power uses a novel combustion cycle that captures its own emissions. Effectively, this means it has in-built CCS.

You see, unlike current plants, that burn natural gas in the air and produce pollutants like nitrogen oxides as well as CO2, NET Power’s method produces emissions of only CO2 and water.

The plants burn natural gas in pure oxygen, and the resulting high-pressure, liquefied CO2 spins turbines called turboexpanders to make electricity. When the turboexpander exhaust cools, water and by-products are removed.

The remaining carbon dioxide is then compressed and captured. The captured carbon dioxide can then be sold to industry or sequestered underground.

Effectively, the company’s oxy-combustion process technology combusts fossil gas in such a way that high-pressure CO2 emissions are sent straight into a pipeline to be pumped elsewhere for use or sequestration, alleviating the need for expensive and energetically intense carbon capture designs.

Oxy-combustion avoids the challenge of separating post-combustion CO2 from the air (nitrogen), by burning the fuel in an atmosphere of pure oxygen plus recirculated CO2 and water.

With costs modelled around 6-8c/kWh, the company believes that this process is the most cost-effective way to capture CO2 from gas power generation.

NET Power’s technology shows over ten years of progress, refining the design of efficient power generation cycles using CO2 as the working fluid. Importantly, it has built a moat around several aspects of the technology.

300 MW plant set to prove the tech works at scale

NET Power is now in the early stages of its commercial deployment, having already demonstrated its carbon capture technology in a 50 MW demonstration project in La Porte, Texas, delivering emission-free electricity to the state grid.

Now it is developing a 300-MW plant, called Project Permian, near Odessa, Texas, to prove that it works at scale. The company says it will come online between the second half of 2027 and the first half of 2028.

This will serve as a test case for broader deployment.

This first plant will be operated by oil and gas producer Occidental Petroleum (OXY), an anchor customer as well as an investor in NET Power, having invested at least $350 million in NET Power since it was founded.

The company plans to use Occidental Petroleum’s existing pipeline infrastructure to move trapped CO2 from the plant to a permanent storage location. NET Power’s plant will also provide power for Occidental Petroleum’s oil and gas operations.

NET Power will sell any excess generation into the local Electric Reliability Council of Texas electricity market.

In February 2022, NET Power also announced a partnership with Baker Hughes to develop and market supercritical CO2 turboexpanders, with the goal of accelerating other projects already in development.

Benefiting from carbon capture tax credits

NET Power is largely self-financing its first commercial project with help from its investors, though it does also plan to seek federal, state or local funding for the project.

For instance, in building this facility, NET Power will look to benefit from the array of federal grant and loan opportunities from the Bipartisan Infrastructure Law.

But it is also a prime contender for the 45Q carbon capture tax credits included in the Inflation Reduction Act. NET Power is confident that it can beat the capture rate of 75% of CO2 emissions required to qualify for those credits.

The Inflation Reduction Act supports CCS by boosting 45Q federal tax credits for carbon that is captured and stored from $50 per tonne to $85 and roughly doubling the credit for carbon that is captured and used in oil fields or other industrial processes to $60 per tonne.

Because the company’s oxy-combustion process technology produces a pure stream of CO2 as part of its inherent design, this should allow the company to build new natural gas power plants above areas identified as especially amenable to CO2 storage, capturing the full $85 per tonne credit.

These carbon credits should make operating costs low. For its part, NET Power expects its plants to generate sufficient 45Q tax credits to offset nearly all natural gas fuel costs.

Certainly, if all this comes together, NET Power will be selling clean power to large industrial customers that want to lower their emissions from power procurement while monetising captured carbon through the 45Q credit.

That’s a recipe that should finally make carbon capture financially viable.

Strong balance sheet

Although NET Power may need more money to build its first few plants because its business model is centred around licensing its technology and collecting royalty revenue.

The company’s goal is to license 30 plants a year by 2030.

NET Power hasn’t provided financial guidance but has offered “illustrative” financials indicating that it could generate over $1 billion in earnings before interest, taxes, depreciation, and amortisation (EBITDA) annually, five years after deploying the plants.

But these plants won’t be cheap to build. The company previously adjusted the cost of Project Permian to approximately $1 billion, up from an initial price tag of between $750 and $950 million.

This project will be financed through a combination of NET Power’s current capitalisation programme, investments from existing shareholders and new project financing.

But, as said above, NET Power is also pursuing government support available at the federal, state and local levels, with a special focus on grant and loan opportunities arising from the Bipartisan Infrastructure Law.

In its latest Q3 2023 results, NET Power reported a modest cash flow from operations of approximately $0.1 million for the quarter. The company’s investing activities resulted in a negative cash flow of approximately $103 million, primarily due to the investment of $100 million into short-term interest-bearing securities.

Capitalised expenditures for Project Permian totalled $2.5 million in Q3 2023, with initial long-lead equipment orders expected to be released in the first half of 2024.

As of the end of the third quarter, NET Power’s cash and short-term investments stood at approximately $645 million, down slightly from $649 million at the end of the previous quarter.

The company emerged with nearly $650 million in cash and no debt after it merged with Rice Acquisition II, a special-purpose acquisition company (SPAC), in June 2023, which is when it became a public company.

The SPAC was formed by Danny Rice, an entrepreneur, energy executive and member of the well-regarded energy-focused Rice family. Rice is now the CEO of NET Power.

Rice’s first SPAC merged with renewable fuel maker Archaea Energy in 2021 and was later bought by BP at more than 2.5 times the original SPAC price – potentially a good omen for NET Power.

The company remains debt-free to this day.

NET Power’s fully diluted share count is approximately 247 million shares, with various classes of common stock and warrants contributing to this total.

The float, however, is relatively small at 13 million shares, which could certainly contribute to upside volatility.

There are some notable risks to consider

Despite the strong balance sheet, this is an investment with some notable risks.

Firstly, please note that at this point NET Power is more of a concept company. It has minimal revenue and operates just one small demonstration plant in Texas, while its first utility-scale plant in Odessa, Texas, won’t be completed until 2027 or 2028.

Certainly, its technology is unproven on a large scale. Its plants, at about $900 million each, also cost significantly more to build than traditional gas plants.

There is a lot that can go wrong in getting this plant off the ground, which could negatively affect the share price.

In fact, earlier this month, the firm actually delayed the completion of Project Permian from 2026 because of challenges in the “global energy supply chain” – vendors that supply equipment and expertise to build the facility – that have caused “extensive lead times across critical components”.

Despite these delays, NET Power is optimistic about resolving supply chain bottlenecks by the time its second utility-scale plant is deployed.

Although the delay is certainly unfortunate, it is also prudent. In part based on Danny Rice’s track record, we have little doubt the plant will get built.

Secondly, remember, too, that years of power industry attempts to develop fossil-burning plants with conventional carbon capture have so far yielded little more than expensive failures.

There is no guarantee that NET Power won’t join some of these projects in the energy market graveyard. Certainly, any knockback with CCS as a whole could depress the entire landscape for the technology and hit NET Power’s share price.

CCS has long been seen as controversial, particularly by environmentalists who see it as a get-out-of-jail-free card that continues to enable fossil fuel producers and consumers to carry on extracting coal, gas and oil and burning it.

Certainly, any backlash against the industry could threaten the growth of the entire global carbon capture industry and, with it, push NET Power’s share price down.

A third risk pertains to competition, including from other technologies that could compete with CCS to fill the role of “clean, firm” power – essentially energy sources that can be called upon to deliver reliable power when solar or wind generation falters – needed to develop an affordable, decarbonised grid.

Competing technologies for CCS include hydropower and pumped hydroelectric storage, geothermal power, nuclear and long-duration energy storage.

NET Power also faces competition from within the carbon capture industry itself.

Indeed, the regulatory push in the US has catalysed several retrofit CCS projects, although right now none look as promising as NET Power.

There are also political risks to consider. The US presidential elections are next year and Donald Trump is currently leading in the polls. Although Trump supported CCS in his first term as president, US taxpayer-funded green energy subsidies are in the crosshairs if he wins and/or if the Republicans re-take the Senate, which is also possible. This might negatively impact the 45Q tax credits, which would certainly hit NET Power.

Lastly, note, too, that NET Power went public as a SPAC, a merging process that has been tainted by many disastrous deals. But, again, we think this shouldn’t matter too much, given the quality of NET Power’s merger partners and investors, which include Occidental Petroleum, Baker Hughes, Constellation and 8 Rivers.

Now is a good time to invest

It’s a risky bet, certainly, but one that looks potentially worth making.

Shares of NET Power fell from $13.30 to under $11 in the aftermath of the announcement of the delay to Project Permian in mid-November. Shares are trading at around $9.50 now, giving us a nice discount for a little extra risk.

Consider that analyst Paul Sankey of Sankey Research has set a 2030 price target on the stock of $100.

In calling NET Power an energy “NVDA,” a reference to chip maker Nvidia, Sankey said the firm was “a natural-gas-fired, steady-state emission-less provider of baseload power [that] could be a tailor-made solution to the growing challenges across the US power grid.”

We agree.

As said, we think NET Power might just have cracked the code for CO2-free gas plants.

A blue cube this is not.

As such, we recommend that you buy NET Power today.

Action to take: buy NET Power
Ticker: NYSE: NPWR
ISIN: US64107A1051
Current price (as of 30.11.23): $9.49
Market cap: $769 million
52-week high/low: 9.35 – 17.62
Buy up to: $11

Big breakthroughs

Inside the lives of James and Sam

James:

I always like to chat to cab drivers when I’m overseas, figuring you can get a native perspective or opinion on a local issue that guidebooks and online reviews rarely provide.

During a recent holiday in Cyprus, I found myself engaged in one such conversation with a local taxi driver, a discussion that unfolded into an interesting insight into the island’s developing solar market.

Late last month, you see, my family and I joined thousands of British holidaymakers looking to escape the increasing gloom at home for some half-term holiday sunshine. Cyprus, one of the most southerly islands in the Med, seemed a pretty safe bet for some good weather.

The country is one of the sunniest places on the planet, with clear skies 320 days a year. It certainly lived up to its billing during our week in an all-inclusive resort in Limassol where clouds made only the very briefest of appearances over the week.

This was actually my first visit to Cyprus, though in truth it felt like we could have been almost anywhere because we spent most of our week firmly ensconced within the boundaries of the resort.

We went there, of course, for the sun and it was the sun that formed the backbone of a conversation I had with an impressively knowledgeable local taxi driver on our one and only daytime excursion.

Sat up top with the driver, on the way to the local harbour where we had a boat trip organised for the day, I couldn’t help but pass comment on the prevalence of solar panels mounted on many of the rooftops we passed.

The taxi driver, who had just told us he had actually spent 15 years living in London before returning to his native country seven years ago, explained that Cyprus had seen a surge in rooftop solar installations in recent years after “electricity costs went crazy”.

Electricity bills were expensive and even comparable to the UK, the driver told me. This was because most of the island’s electricity was still produced by burning imported heavy oil at its three thermal power stations, while a lack of competition in the retail market meant there was still only one incumbent utility to choose from, he said.

Solar panels were used not just for electricity but also used in homes to heat water, he added.

But the driver said country still had a long way to go to take advantage of one of its main natural resources – the sun. With no interconnections with other countries or any storage systems installed anywhere on the island, Cyprus sometimes had too much solar power than it could handle, forcing the grid operator to turn off solar energy to keep the grid in balance.

“We have so much sun in Cyprus that we don’t know what to do with it, literally,” the driver joked.

But without a nearby national power network that can bail Cyprus out in an emergency, the grid kept the oil generators running on low at all times, no matter the weather, he added.

“Everyone here likes to sleep with their AC on but solar doesn’t work during the night, so we can’t rely on it fully just yet, even though everyone here sees that solar is our future.”

Sunny Cyprus

Sam:

It’s been a hectic month for me to say the least.

It all started though with a trip to the “big box” sports and outdoor retailer, Decathlon.

Decathlon is one of those stores that everyone knows, but no one really knows. By that I mean that it’s the largest sporting goods retailer, in the world.

But if I asked ten people who owns it, I bet none of them could tell me.

It’s a French billionaire, Michel Leclercq. He made his billions from Decathlon. Founded in 1976, it’s the go-to place for anything outdoors and sports related.

The shame of it is that Decathlon is private. Leclercq still owns 40%, but unfortunately it’s not something you can go and invest in.

So, when I rolled in there earlier this month to spend a few hundred euros, none of it was going to a company I could hold in my investment account.

Nonetheless, I was going there to buy a padel racket and some padel shoes. While I might have been in the biggest sports retailer in the world, I was also going to get some gear so I could join the fastest growing sport in the world, padel.

Now I’m a beginner, but if I’m going to play something, I’m going to commit. I’m going to ensure I’ve got the right gear so I can fully enjoy it. I now have a pair of Asics padel shoes in the bag and my (new) pride and joy, my Bullpadel racket.

You might note that I opted for the “Power” series. This is because that’s what I’m going to bring to the court… POWER!

I’ve got a sneaky feeling that you’re going to be hearing a lot more about padel in the UK very soon. You’ll see more apparel and equipment appearing in places like Decathlon, see it appear on the telly and start to see the bright blue padel courts popping up around at local tennis, squash and sports centres.

Getting ahead of major trends is what I like to do, specially from an investment perspective. Occasionally I like to get ahead of non-investment trends too – and I reckon this is one that’s going to be big.

Crypto Corner

Sam:

How institutional money comes to DeFi

In the crypto markets one of the fundamental actions you need to get to grips with is the buying and selling of crypto.

Thanks to the unwillingness of banks to always play friendly with crypto exchanges, this can sometimes get tricky.

It’s not always as simple as just sending cash to a brokerage account and hitting the buy button as you would if you were buying stocks on Hargreaves Lansdown or Barclays.

Whether your bank allows you to move money from your account to a crypto exchange is not something I can help with I’m afraid. I get regular comments from people that say their bank has blocked them or isn’t allowing transfers.

Sometimes these blocks are from banks that I know other people have no problems with. It seems that the playing field is not level for everyone. But that’s the traditional financial system (TradFi) for you; it never was or will be a level playing field.

Which is why we’re so staunchly optimistic about what crypto can provide – while it’s not perfect, it at least does a better job of levelling the playing field than TradFi ever has.

However, there are aspects of the crypto world that are closely aligned with TradFi. That’s not a bad thing, but it’s not a good thing either – it’s a “meh” thing.

One of the things that flies close to the world of TradFi is the role of exchanges in crypto. As I said earlier, they enable one of the most fundamental aspects of crypto: buying and selling.

Without the exchange, getting money from TradFi into crypto gets considerably harder. Over the years crypto exchanges have had a tumultuous relationship with the market, customers and regulators.

That seems to be coming to a head right now in a billion different ways.

The biggest development in the last month has been the troubles of major exchanges in the US. Most notably the gargantuan anti-money laundering fine lumped on Binance in a settlement with the US Department of Justice (DoJ).

A staggering $3.4 billion fine was put in place by the Financial Crimes Enforcement Network (FinCEN) and an additional $968 million from the Office of Foreign Assets Control (OFAC). The final bill comes to a blistering $4.368 billion. Then add to this that the CEO of Binance, Changpeng Zhao (commonly known as CZ), was forced to step down and personally pay a $50 million fine.

Binance will also completely exit from the US. Make no mistake, this is the US regulator “clearing house” before TradFi properly gets into bed with the crypto markets.

You see, Binance, love them or hate them, pushed too far in the US. The regulators decided enough is enough. Whether you agree with the way the DoJ went about it or whether Binance did anything wrong or not is somewhat moot now.

The point is, Binance is losing access to the US, and the US doesn’t really want it there anyway. What the US regulators want is a tidy shop for the likes of BlackRock, Fidelity, Invesco, WisdomTree and others to operate in.

By “tidy shop” we mean a regulatory environment where control and oversight is paramount. While Binance’s fine and punishment was a clear target, this just paves the way even more for the impending spot bitcoin exchange-traded funds (ETFs) in the US.

Now if those ETFs are approved, which at this point seems like an almost certainty in early 2024, that won’t be the start and end of it.

As we’ve seen in Europe, where there’s a bitcoin ETF (or ETF, ETC, etc), then an Ethereum one is typically hot on its heels. 21Shares did it that way. CoinShares did it that way too.

We also know that in the US, BlackRock has already provisionally filed for an Ethereum ETF. Hence the expectation that this will unlock a large capital flow into the crypto markets as these spot ETFs come alive.

Further to this, because the DoJ has cleared house with Binance, this paves the way for a handful of beneficiaries to step into that void. Notably the likes of Coinbase, which now appears to be on stable footing in the US, may benefit most.

Coinbase is the named custodian of the impending ETFs. It’s pretty chummy with BlackRock (and others) it seems. That’s good, because we think that Coinbase may then play a pivotal role in the flow of capital from institutions into decentralised finance protocols.

Coinbase now has an Ethereum layer 2 network, known as Base. This Base network now links to DeFi protocols like Aave, Compound, LidoDAO and more recently the 1inch decentralised exchange.

The point is you’ve got big institutional money that’s keen on DeFi, now with a stable, regulatory friendly pathway (Coinbase) into it. The bitcoin ETFs are the first step, then we’d expect Ethereum ETFs as the second step. From there we think that institutional money will be coming for the DeFi protocols too, through the Base network.

This all points to 2024 being a big year for crypto and for crypto investors. It’s insto money flowing into crypto, which might spark the next big bull market. And if that plays out, the expectation is that it blows the roof off the market returns we saw in all previous cycles.

What else we’ve been looking at this month

James:

This is a masterful report on the bull case in uranium

If you’ve heard about the surge in uranium prices but you’re unsure what’s behind it, then you could do worse than read this masterful report by Goehring & Rozencwajg. In this deep-dive research report, the analysts clearly present the evidence to support their prophecy of “a sustained and frenetic bull market”. The bold conclusion that the “cumulative deficit between 2023 and 2030 will likely exceed 250 mm lbs, completely depleting all commercial stockpiles” says all you need to know as to why “uranium has likely reached a pivotal inflection point that could force the price higher by as much as three- to four-fold over the next several years.” It’s becoming increasing clear that uranium marks a once-in-a-generation investing opportunity that’s now being offered up to patient long-term investors and this report is required reading for anyone interested in participating in the market.

The good and bad news of climate tech investment trends

Let’s get the bad news out of the way first. Global investment in climate tech startups fell by 40.5% in the 12 months to September, a slump driven by continuing economic uncertainty and geopolitical conflict. The drop has taken funding back to the level of five years ago. And the good news? Well, if the decline in climate tech investment was bad, it was actually significantly smaller than the 50% average fall across all sectors. The data is from a recent report released by accounting giant PricewaterhouseCoopers. It’s a good read (if you’re into this type of thing). One nugget from the report that stuck out to me is that there is still a huge misallocation of capital between the sectors with the most emissions and the funded solutions. For instance, buildings plus industry account for 51% of emissions but only 19% of funding, while the mobility sector accounts for 15% of emissions but 45% of funding.

Debunking 21 myths about EVS

Electric vehicles (EVs) are “likely crucial” for tackling transport CO2, says the Intergovernmental Panel on Climate Change (IPCC). Meanwhile, EV sales are rocketing, accounting for one in every seven cars sold globally in 2022 – up from one-in-70 just five years earlier. Yet EVs are being subjected to relentless hostile reporting across mainstream media in many major economies, including the UK. So, I enjoyed reading this article from Carbon Brief debunking 21 – yes, 21 – of the most common EV myths.

Sam:

UK investment funds to tokenise assets

The idea of tokenising assets is not new to me. But to see it now slowly but surely gathering momentum is promising to see. The idea of an extensive report on the “blueprint” towards tokenisation is a very promising outcome for the entire digital assets space. Here the Investment Association provides its report: “UK Fund Tokenisation: A blueprint for implementation.”

Get on the Pika waitlist

New AI tools are popping up everywhere at the moment. I try to keep track of as many as possible over at my free AI-focused Substack, AI Collision (you can subscribe to that for free, here). But this one I had to share. It’s called Pika and it’s a text to video (or as it puts it, “idea to video”) platform that could be the most amazing AI creative tool I’ve seen yet. You can get on its waitlist by heading to the site and popping down your email. I’ve already done it. The video on that page showing what you can do is worth the visit alone.

Who’s the real brains behind OpenAI?

Sam Altman often gets the credit as the brains behind OpenAI and everything it’s done to change the world (already). But there’s someone else that doesn’t quite get the same media attention but arguably is even more important to OpenAI than Altman. So much so, that it’s believed he was the driving force behind Altman getting sacked by the board recently. Here’s a great long-form piece on Ilya Sutskever, OpenAI’s chief scientist.

James Allen and Sam Volkering
Editors, Small Cap Investigator