Oct 31 2024 49 mins 147
This might be our wonkiest topic yet: Techno-economic analysis, or TEA.
Before a startup proves its technology is commercially viable, it models how a technology would work. These TEAs include things like assumptions about inputs, prices, and market landscape. They help investors and entrepreneurs answer the question, will this technology compete?
TEAs are important to the success of an early-stage climate-tech 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 have some pet peeves.
So what can startups do to improve their TEAs?
This episode is a re-run from October 2023. We’re making a new episode on TEAs soon – stay tuned. But to start, we’re running this episode as a way to set up our next one.
In this episode, Shayle talks to his colleagues Dr. Greg Thiel, EIP’s director of technology, and Dr. Melissa Ball, EIP’s associate director of technology. They cover topics like:
- Bad assumptions about things like levelized cost of production
- Focusing on a component instead of a system
- Focusing 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 (TECHTEST) Tool
National Renewable Energy Laboratory: Techno-Economic Analysis
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