Data Platform Paces Raises $1.9M To Derisk The Green Infrastructure Development Revolution
Climate change is high on the agenda for every layer of government within nations across the world, leading to trillions of dollars in investment in the coming decades to build green infrastructure. Paces, a data platform startup founded by ex-Facebook AI engineer Charlies Bai and early Hello Vera employee (acquired by Google) and sales expert James McWalter, enables green infrastructure development to be faster, more profitable, and location-optimized. The New York City-based startup raised $1.9M from Resolute Ventures, Y Combinator, UpHonest Capital, Climate Capital, KD Venture Partners, Sky Foundation, Jason Yosinski, Jovin Cronin-Wilesmith, Gerald Rousselle, Sam Steyer, Nick Osgood and Greg Richards.
Osgood, DroneBase’s VP of Operations, says, “Green infrastructure is such an old school industry, ripe for disruption. From James and Charles’ data first approach to making the green development process more efficient to their experience in building world class software and data solutions, I was delighted to support them!”
Frederick Daso: How have grid design and zoning issues emerged as the main bottleneck to approving and constructing green infrastructure projects?
Charles Bai: It’s worth taking a step back and thinking about the history of energy infrastructure. Over the past 100 years, the model was to build a large coal/gas power plant near where the energy was consumed, either by an industrial area or a city. This meant that where energy was produced and consumed were fairly geographically close to each other. For 100 years, the electrical transmission lines that connect energy resources were built with this model in mind.
Renewable energy and other green infrastructure are different as they are way more dispersed. Solar is best built where there is quite fairly flat land with a decent amount of sunshine. The wind is best built where it is windy. Those geographic requirements are often in contrast with where the energy is consumed, so you need to get the energy from one place to another, which means we need to rethink grid design and build more transmission.
You also need a lot more land than fossil-based infrastructure. Land and control over land use is something over which there has always been conflict and controversy. As we need more and more land to generate the energy we need to fuel a carbon-free economy, we will have to navigate more and more land restrictions, with zoning and permitting being major bottlenecks.
Not only are these bottlenecks, but the information about those bottlenecks is opaque and hard to find. That is where Paces comes in. We find the hard-to-collect data, make sense of it, and help guide green infrastructure to be built in places with fewer blockers from grid interconnection and zoning.
Daso: Why does NIMBYism factor into rejecting proposed green infrastructure projects? Do these projects negatively impact property values in the immediate vicinity?
James McWalter: People want a say on the look and feel of the places where they live. Change is scary, and the people with the most political power tend to be the same as those for whom change tends to be the scariest (older and wealthier people). This translates into organized, local NIMBYism.
We think a lot about public choice theory, a model of understanding how as various actors in a political system gain power, the number of bottlenecks to making local change goes up. It’s a tough problem, as we want historically marginalized communities to have more voice, while at the same time, we can see in the data that the more voices on the net, the fewer things that are actually built. And we need to build trillions in green infrastructure to have any chance at a sub-1.5-degree world.
One thing that has been exciting to see is the rise of the YIMBY movement. YIMBYs attempt to be a counterweight in public permitting meetings to NIMBY groups by arguing for more sustainable development.
On the specific question of property values, the data is mixed. Solar development has increased and decreased property values in various parts of the country, but the effect is generally pretty small. Our view is that as climate change intensifies, many of the places we need to build green infrastructure will become worse places to live and will have declining property values.
Daso: What types of projects are approved in the current multi-billion dollar green infrastructure services market and why?
Bai: We think of green infrastructure in three buckets. First, clean energy infrastructure like solar, wind and battery storage. Next, you have clean transportation infrastructure like EV charging stations and hydrogen refueling stations for heavy vehicles. Finally, you have green real estate, attempting to make all new buildings net climate positive. At the moment, the first bucket is where 80% of the money and effort is focused, with most of the rest coming from clean transportation. But even in the clean energy space, we are failing to build fast enough.
Solar and wind combined only account for 11% of our total energy mix. We will build 20-40x the number of existing renewables over the next two decades. But less than 20% of solar and wind farms in the grid queue are successfully being built. It is not a problem of money; there are 100s of billions of green capital looking to be deployed from both the public and private sectors. Rather it is some of the issues we outlined above.
Daso: How does the relationship between green infrastructure builders and regulatory bodies change with Paces’ data platform making such information transparent?
Bai: Right now, everything is opaque. Paces provides deep due diligence data that typically won’t surface until months into site control. Paces’ advanced analytics allows users to quickly identify the most suitable sites for their next projects instead of going through parcels manually.
Green infrastructure builders will also have a much higher success rate in getting their proposals approved instead of working on lots of projects in parallel and having most of them rejected. Regulatory bodies won’t need to model many projects, and the interconnection queue will move faster.
We also plan to shine a light on the different parties that are blocking green infrastructure development. If there is a county clerk in a blue state claiming green bona fides, but in fact, they have denied 9/10 of recently attempted solar projects, then we want to make that easy to find. In turn, this transparency will hopefully force political change at the local level.
Daso: One of the major complications regarding green infrastructure is the negative externalities related to its construction that is borne by the surrounding environment and citizens living there. Can and will Paces play a role in rating and regulating the service providers building these projects based on their impact and interactions with public and private local leaders and residents?
McWalter: Environmental justice is absolutely important. It needs to be assessed in a larger way, though. If a marginalized community lives amid a coal plant, life expectancy and quality of life are negatively affected. When solar/wind replaces that plant and gets shut down, that existing negative externality is also removed from the local population.
These projects also provide new jobs and a better environment for the locals. We believe another big gap right now is talent. We have 1 million people working on climate; we need to help millions more transition from their current jobs to green jobs. An electrical engineer at a coal plant can transition into working on solar farms.
Daso: How have you built the Paces team culture to encourage more “grabbiness,” or the willingness for team members to take on more responsibility and ownership of their work?
Bai: Everyone needs to get their hands dirty in an early startup. The responsibility boundaries between roles are blurred, and there are just lots of growth opportunities. In previous startups we have worked on, it is amazing to see people hired to work on growth notice a massive product issue and tackle it positively.
We look for sharp and ambitious people who are eager to learn and grow together. As founders, we learn something new every day, and by putting people into positions where they can stretch themselves, we can encourage them to scale themselves up. The best feeling in the world is to be pleasantly surprised when a team member solves a problem in a way better than you could even have imagined!
Daso: How do you two personally and professionally complement one another to succeed at growing Paces into growing into a generational-defining company?
Bai: James is the extrovert whose background is in sales and go-to-market strategies, whereas I’m the quiet product person and engineer. We share a strong bias towards action and execution, so we can get things done quickly with our complementary skill sets. Another very important factor is that we share the same vision for Paces. We both want to build something that shapes the physical world in a climate-positive way, and we can’t wait to see the impact.