Guest column

Houston experts: Amplifying startup success is key in the energy transition era

The future energy system will be made up of countless new technologies that are actively being developed and scaled by climate and energy startups around the world. Photo via Getty Images

The global energy landscape is undergoing unprecedented challenges, influenced by post-pandemic work trends, geopolitical events like the Ukraine crisis, and the urgent need to reduce carbon emissions.

To achieve net-zero goals by 2050 and address climate change, a significant investment of $5 trillion by 2030 to USD $4.5 trillion by 2050 is required, necessitating a rapid transformation in traditional energy production, distribution, storage, and consumption methods.

High-tech energy and climate startups are pivotal for a robust economy, driving innovation, economic growth, and enhanced productivity. These startups foster healthy competition, attract crucial investments, and contribute significantly to job creation, outpacing larger companies in terms of employment generation. The U.S., a startup leader, generated over 3.7 million new jobs in 2022, showcasing the adaptability of startups to market trends. Globally, India, with the third-largest startup ecosystem, has contributed to the creation of 860,000 jobs since the stand-up of Startup India, emphasizing the importance of nurturing startups for sustained economic dynamism and innovation.

The future energy system will be made up of countless new technologies that are actively being developed and scaled by climate and energy startups around the world. These founding teams require access to scaling resources to accelerate and amplify their impact. Human talent, financial investment, demonstration opportunities and physical facilities are scaling resources that often require significant time and capital to build from scratch. This inefficient resource deployment can be particularly pronounced for hard-tech entrepreneurs. Startup community participants are organized around providing entrepreneurs with the needed access to these resources.

"Our mission is to enable hydrogen adoption by solving the key challenges in hydrogen storage and transportation," says Ayrton CEO, Natasha Kostenuk. "With Halliburton's strategic engineering and manufacturing support, we can scale our technology, execute pilot demonstrations and accelerate towards commercialization."

Halliburton Labs, is highlighted for its diverse team and the support it provides to global entrepreneurs in sustainable ventures. The future energy system is envisioned to be composed of numerous new technologies developed and scaled by climate and energy startups worldwide. These startups require access to scaling resources mentioned above, where Halliburton Labs serves as a conduit between established practitioners and startup entrepreneurs, accelerating the latter's impact by providing access to these critical resources.

Infosys launched the Infosys Innovation Fund to invest in entrepreneurial ventures around the world. Their investment philosophy is geared toward supporting innovation and purposeful solutions that are relevant to the strategic priorities of their clients. This differentiates the Infosys Innovation Fund from most other venture capital institutions, in that they have a strong motivation to create long term value for the end users of the technology and to the companies building these solutions.

Infosys actively collaborates with emerging technology startups through its Infosys Innovation Fund. Employing a Desirability, Feasibility, Viability (DFV) framework, Infosys strategically selects startups and offers advantages such as market, financial and technical scale. The Infosys Innovation Fund stands out for its motivation to create long-term value for end users and the companies building innovative solutions. Infosys also operates an incubation center called ‘Infosys Center for Emerging Technology Solutions’ (iCETS), focusing on NextGen services and offerings through collaboration with clients, startup partnerships, university collaborations, and more.

Startups working with Infosys benefit from accessing the company's know-how, market knowledge, and strategic advisors from the consulting arm of business, Infosys Consulting, who are focused on creating business value through technology innovation. The combined expertise guides entrepreneurs from idea to qualification, proof-of-concept, prototype, minimum viable product (MVP), scale, and continuous discovery and delivery.

Open innovation and trusted partnerships in the energy transition era

In the energy transition era, open innovation and trusted partnerships are becoming essential components of amplifying success for startups. Collaborative cultures and trusted partnerships with companies like Infosys and Halliburton Labs are crucial for supporting and scaling startups in this rapidly evolving energy landscape. This shift towards ‘open innovation’ reflects a broader trend in the industry toward collaboration and shared expertise as key drivers for success to accelerate and achieve global energy transition aspirations.

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Scott Gale is the executive director of Halliburton Labs. Jason Till is partner of Experience Transformation & Innovation at Infosys Consulting. Rima Thakkar is principal - Americas Energy Transition at Infosys Consulting. Laura Sacchi, Mandar Joshi, and Sonali Sakhare of Infosys Consulting contributed to this article.

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A View From HETI

Chevron plans to launch its first AI data center power project in West Texas in 2027. Photo via Chevron.com

Two of the Houston area’s oil and gas goliaths, Chevron and ExxonMobil, are duking it out in the emerging market for natural gas-powered data centers—centers that would ease the burden on electric grids.

Chevron said it’s negotiating with an unnamed company to supply natural gas-generated power for the data center industry, whose energy consumption is soaring mostly due to AI. The power would come from a 2.5-gigawatt plant that Chevron plans to build in West Texas. The company says the plant could eventually accommodate 5 gigawatts of power generation.

The Chevron plant is expected to come online in 2027. A final decision on investing in the plant will be made next year, Jeff Gustavson, vice president of Chevron’s low-carbon energy business, said at a recent gathering for investors.

“Demand for gas is expected to grow even faster than for oil, including the critical role gas will play [in] providing the energy backbone for data centers and advanced computing,” Gustavson said.

In January, the company’s Chevron USA subsidiary unveiled a partnership with investment firm Engine No. 1 and energy equipment manufacturer GE Vernova to develop large-scale natural gas power plants co-located with data centers.

The plants will feature behind-the-meter energy generation and storage systems on the customer side of the electricity meter, meaning they supply power directly to a customer without being connected to an electric grid. The venture is expected to start delivering power by the end of 2027.

Chevron rival ExxonMobil is focusing on data centers in a slightly different way.

ExxonMobil Chairman and CEO Darren Woods said the company aims to enable the capture of more than 90 percent of emissions from data centers. The company would achieve this by building natural gas plants that incorporate carbon capture and storage technology. These plants would “bring a unique advantage” to the power market for data centers, Woods said.

“In the near to medium term, we are probably the only realistic game in town to accomplish that,” he said during ExxonMobil’s third-quarter earnings call. “I think we can do it pretty effectively.”

Woods said ExxonMobil is in advanced talks with hyperscalers, or large-scale providers of cloud computing services, to equip their data centers with low-carbon energy.

“We will see what gets translated into actual contracts and then into construction,” he said.

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