Climatetech startups need strong techno-economic analysis

5 October 2023

A good TEA is the unsung linchpin of early-stage climatetech.

On the Catalyst with Shayle Kann podcast this week:

This might be our wonkiest topic yet: techno-economic analysis, or TEA.

Before a startup has proven that its technology is commercially viable, it models how its technology would work. These TEAs include things like assumptions about inputs, prices and the market landscape. They help investors and entrepreneurs answer the question: Can this technology compete?

TEAs are important to the success of an early-stage climatetech company. And a lot of startups get them wrong. As an investor at Energy Impact Partners (EIP), Shayle and his team see a lot of TEAs — and they have some pet peeves.

What can startups do to improve their TEAs?

In this episode, Shayle talks to his colleagues Greg Thiel, EIP’s director of technology, and Melissa Ball, EIP’s associate director of technology. They cover topics including:

Bad assumptions about variables such as levelized cost of production.
Focusing on an individual component rather than an entire system.
Zeroing in on unhelpful metrics.
Using false precision — something Shayle calls “modeling theater.”

Recommended resources:

Activate: Techonomics: Establishing best practices in early-stage technology modeling
Department of Energy: Techno-economic, Energy & Carbon Heuristic Tool for Early-Stage Technologies
National Renewable Energy Laboratory: Techno-economic analysis

Catalyst is a co-production of Post Script Media and Canary Media.

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