Houston-based clean tech investment firm VC Fuel sees opportunity for renewable energy service companies in the new green economy.
Ahmad Atwan, founder and CEO of VC Fuel, believes that much like oil and gas producers have leaned on oil field service companies for engineering, technological and operational support, growing wind and solar companies will need similar support services in a successful renewable energy transition. So VC Fuel is incubating a company to provide some of those services that have the highest value-add to renewable energy companies, Atwan said, such as repairing and cleaning solar panels to improve efficiency, upgrading outdated wind turbines and decommissioning and recycling old assets.
It also made sense for VC Fuel to develop the concept, Clean Energy Services, or CES, in Houston for multiple reasons.
“First, you have a huge talent pool that is used to doing energy services and you can repurpose it for clean energy sitting in Houston,” Atwan said. “Second, you’re close to the actual solar and wind installations themselves, whether they’re in South Texas or in the Panhandle or in West Texas.”
CES landed an initial contract is building out a team of experts, Atwan said. The company aims to hire a chief commercial officer to lead business development efforts, as well as project managers and field technicians. VC Fuel is taking a majority stake as the founding investor for CES.
With President Joe Biden signing the $1.2 trillion infrastructure bill into law on Nov. 15, which includes billions of dollars to expand renewable energy capacity and upgrade the nation’s grid infrastructure, CES sees a wave of asset upgrades on the horizon.
“We think we can build a decent-sized services business based out of Houston in the next couple of years,” Atwan said.
VC Fuel announced launching in June to invest in companies in renewable fuels, carbon capture utilization and storage, electric vehicles and electrification, clean agriculture and other clean tech sectors. A sister fund, VC Infrastructure, provides financing for infrastructure projects to support VC Fuel portfolio companies. Atwan previously held energy-focused roles with New York-based investment firm BlackRock (NYSE: BLK) and Morgan Stanley Infrastructure Partners
VC Fuel was raising $100 million for the first venture fund and $500 million for the first infrastructure fund, and the firm expects to close on fundraising next year, sources close to VC Fuel told the Houston Business Journal. Atwan declined to comment on VC Fuel’s fundraising efforts.
VC Fuel’s investments include Florida-based organic vertical farming company Hardee Fresh and Houston-based Inovues, which develops energy-efficient technology to upgrade building windows without replacement.