Solar and wind have won. That sentence would have been extraordinary twenty years ago, when the International Energy Agency was still projecting that renewables would account for a marginal fraction of global electricity generation by 2030. Today it is simply descriptive. The cost of utility-scale solar photovoltaics has declined approximately 90 percent since 2010. The cost of onshore wind has declined 70 percent over the same period. Both technologies are now the cheapest sources of new electricity generation in the majority of global markets, without subsidy, measured on a levelised cost basis. The deployment curve is steep and continuing: the IEA projects that solar and wind together will account for the majority of global electricity generation capacity additions through 2030 and beyond.
For venture investors, however, these numbers describe a market that has largely moved past the stage where venture-scale returns are achievable. Solar panels and wind turbines are commodity products manufactured at scale by established industrial companies. The remaining innovation in these sectors — inverter efficiency improvements, blade material optimisations, installation logistics — is incremental rather than transformative. The venture-sized opportunities in the energy transition lie in what solar and wind cannot do: provide firm, dispatchable power on demand regardless of weather conditions; decarbonise industrial processes that require high-temperature heat; and store energy across seasons rather than hours.
This article maps the investment landscape in these harder energy problems, with particular attention to companies that have already demonstrated significant investor conviction at scale: Form Energy, Helion Energy, Rondo Energy, and Commonwealth Fusion Energy. Their trajectories illuminate both the scale of the opportunity and the technical architecture of the solutions that are proving most promising.
The Intermittency Problem: Why Storage Is the Enabling Technology
Solar and wind's fundamental limitation is their intermittency. Solar generates electricity only when the sun shines; wind generates electricity only when the wind blows. As the penetration of variable renewable energy increases on electricity grids, the periods when generation exceeds demand — and when demand exceeds generation — become increasingly extreme. California's grid regularly experiences the "duck curve": midday solar generation so abundant that prices go negative, followed by a sharp evening demand ramp as the sun sets and millions of homes simultaneously require electricity for cooking, lighting, and climate control.
The solution to intermittency is storage: systems that absorb excess generation during periods of surplus and release it during periods of scarcity. Lithium-ion batteries, which have seen cost reductions almost as dramatic as solar panels over the past decade, have largely solved the problem of short-duration storage — providing grid stability over periods of four to eight hours. But lithium-ion batteries are fundamentally unsuited to long-duration storage: the cost-per-kilowatt-hour of a lithium-ion system designed to store energy for 100 hours is prohibitively expensive compared to the value of the electricity stored.
Long-duration energy storage — systems capable of storing electricity for periods of 10 hours to multiple days or even weeks — is therefore the critical missing infrastructure layer for high-penetration renewable energy grids. The technologies competing to fill this gap range from pumped hydro (which requires specific geography) to compressed air, flow batteries, gravitational storage, and novel electrochemical approaches. Among these, iron-air batteries represent one of the most technically compelling approaches.
Form Energy: The Iron-Air Battery Bet
Form Energy, founded in 2017 by former members of the Yet-Ming Chiang laboratory at MIT and early Tesla and A123 alumni, is building iron-air batteries designed for 100-hour storage at costs competitive with natural gas peaker plants. The company has raised approximately $450 million in total funding, including investments from ArcelorMittal, Breakthrough Energy Ventures, and strategic capital from utilities including Xcel Energy.
The iron-air chemistry is conceptually elegant. The battery discharges by oxidising iron pellets in the presence of air — a reaction that has been understood since the nineteenth century — and charges by applying electrical current to reverse the oxidation, essentially "unrusting" the iron. The materials are abundant, cheap, and non-toxic: iron is the most common element in the Earth's crust, and the electrolyte is an aqueous solution rather than the organic solvents used in lithium-ion systems. The trade-off is low energy density — iron-air batteries store less energy per unit volume than lithium-ion — and lower round-trip efficiency. But for grid-scale applications where land cost is modest and cycle count per year is low (the battery might discharge only a few times per year during extended low-generation periods), these trade-offs are acceptable.
Form Energy's pilot projects, including a partnership with Great River Energy in Minnesota, are providing the operational data needed to validate performance at grid scale. The company's business model is direct sales to utilities, with pricing based on dischargeable energy cost rather than power capacity — a structure well-suited to the utility procurement process and the specific value that long-duration storage provides to grid operators. The $450 million raised to date reflects investor conviction that iron-air chemistry, scaled appropriately, can deliver the cost structure required for widespread utility adoption.
From a venture investor's perspective, Form Energy represents the classic deep tech pattern: a scientific insight from an academic laboratory, a capital-intensive development process spanning multiple years, and a technical position that is genuinely difficult for competitors to replicate because the performance of the chemistry at scale depends on accumulated process knowledge about pellet fabrication, electrolyte management, and degradation control that cannot be shortcut.
Rondo Energy: Thermal Storage for Industrial Heat
Rondo Energy is addressing a different and frequently overlooked dimension of the energy transition: industrial process heat. Approximately one-third of global final energy consumption goes to industrial heat — the process heat required to manufacture cement, steel, chemicals, ceramics, food, and hundreds of other industrial products. Much of this heat is at temperatures above 300°C, which is too high for most electrification approaches and too low for nuclear steam. It is currently almost entirely supplied by burning fossil fuels.
Rondo's approach is to store excess renewable electricity as high-temperature heat in solid thermal storage systems — essentially, large blocks of refractory material heated by electrical resistance — and then discharge that heat on demand to industrial processes. The technology is mechanically simple: solid thermal storage has been used in industrial applications for decades. Rondo's innovation lies in the control systems, the integration with variable renewable energy sources, and the business model — selling heat as a service to industrial customers who want to decarbonise their process heat without capital investment in the storage infrastructure itself.
Rondo has raised approximately $60 million from investors including Breakthrough Energy Ventures, DCVC, and others. Its first commercial deployments are underway with industrial partners including Siam Cement Group in Thailand and a partnership with ADM in North America. The company's Heat Battery system has achieved operating temperatures above 1,500°C — sufficient for a wide range of industrial process heat applications — and the modular design allows deployment at scales ranging from small manufacturing facilities to large cement or chemical plants.
The investment case for Rondo is built on a market that is genuinely vast and that has received disproportionately little venture attention. Industrial heat decarbonisation is not as visible or as politically salient as electric vehicles or consumer solar panels, but the carbon abatement potential is enormous. The hard-to-abate industrial sectors — steel, cement, chemicals — account for roughly 20 percent of global CO2 emissions and have historically resisted electrification. Thermal storage that can deliver reliable high-temperature heat from variable renewables represents a genuinely transformative solution for these industries.
Antora Energy: High-Temperature Thermal Storage with Carbon Delivery
Antora Energy, which has raised approximately $50 million in funding, is pursuing a related approach to thermal storage but at even higher temperatures and with the additional capability of converting stored heat back to electricity via thermophotovoltaic (TPV) cells. The company's system stores energy as heat in carbon blocks at temperatures above 2,000°C — approaching the temperature of the surface of the sun — and can deliver this heat either directly to industrial processes or convert it to electricity on demand using solid-state thermophotovoltaic cells that have no moving parts.
The TPV conversion capability is particularly significant because it creates a "firm power" product: electricity that can be dispatched on demand regardless of weather conditions, with a storage duration limited only by the thermal mass of the storage block. At industrial scale, Antora's system could provide both process heat for industrial customers and dispatchable electricity to the grid, creating a dual revenue stream that improves project economics.
The technical challenge is the photovoltaic cells that operate at thermophotovoltaic wavelengths — these require different semiconductor materials than conventional solar cells and have historically suffered from efficiency limitations. Antora's work on improving TPV cell efficiency, combined with novel emitter materials for the carbon storage block, represents the core technical innovation that differentiates the company from earlier thermal storage approaches. Early pilot deployments are validating the system performance at commercial scale.
Helion Energy: The Fusion Shortcut
Helion Energy occupies a different position in the energy transition investment landscape: it is betting that commercial nuclear fusion — the energy source of stars, which generates energy by fusing light atomic nuclei rather than splitting heavy ones — can be achieved faster and more cheaply than the mainstream fusion programme has suggested.
The company has raised approximately $500 million in total funding, including a $375 million Series E round led by Sam Altman with participation from Peter Thiel, Reid Hoffman, and others. More significantly, Helion has signed a power purchase agreement with Microsoft for delivery of fusion electricity by 2028 — the first commercial power purchase agreement in fusion history, and a commitment that puts both companies' credibility firmly on the line.
Helion's fusion approach uses a field-reversed configuration (FRC) rather than the tokamak geometry pursued by Commonwealth Fusion Energy and the ITER programme. In Helion's system, two plasmoids of hydrogen fuel are accelerated toward each other in a linear magnetic confinement device, compressed until fusion conditions are reached, and then the resulting expansion of the plasma directly drives a generator via electromagnetic induction — a process the company calls "direct electricity conversion" that eliminates the thermodynamic losses associated with using fusion heat to boil water and drive a steam turbine.
The physics of Helion's approach are well-understood; the engineering challenges of achieving net energy gain and reliable repetitive firing at the required frequencies are enormous. The company's seventh-generation device, Polaris, currently under construction, is designed to achieve net energy gain — meaning that the electricity produced exceeds the electricity input — for the first time. If Polaris achieves this milestone on schedule, the path to commercial scale becomes substantially more credible and the $375 million investment thesis becomes dramatically better-supported by physical evidence.
The Microsoft power purchase agreement, with its 2028 target date, is almost certainly optimistic on timeline. But its existence signals something important: sophisticated technology buyers are willing to make binding commitments based on their assessment of fusion's trajectory, even at significant risk. This is not speculative enthusiasm; it is a commercial judgment by one of the most technically sophisticated organisations in the world. That judgment matters for how investors should weigh fusion investment theses.
Commonwealth Fusion Energy: The Magnet Breakthrough
Commonwealth Fusion Energy, spun out of MIT's Plasma Science and Fusion Center in 2018, has taken a different technical path to commercial fusion than Helion. Rather than a novel reactor geometry, CFS's innovation lies in magnet technology: the development of high-temperature superconducting (HTS) magnets capable of generating magnetic fields of 20 tesla or more — roughly twice the field strength previously achievable at fusion-relevant scales — using REBCO (rare-earth barium copper oxide) tape rather than conventional low-temperature superconductors.
The significance of this magnet breakthrough is physical and mathematical. The power output of a tokamak fusion device scales as approximately the fourth power of the magnetic field strength. Doubling the magnetic field strength increases the power output by a factor of sixteen. This means that a tokamak with CFS's 20-tesla magnets can achieve the same fusion performance as ITER — the 35-nation, €20 billion, 500-megawatt international fusion project under construction in southern France — at roughly one-tenth the physical volume. The SPARC device currently under construction in Devens, Massachusetts, has a total weight of approximately 65 tonnes. ITER weighs approximately 23,000 tonnes.
CFS demonstrated its REBCO magnet technology in September 2021, achieving 20 tesla in a test magnet that represented the enabling technology for SPARC. The $1.8 billion raised since that demonstration reflects investor conviction that the magnet barrier — historically the critical constraint on compact tokamak performance — has been credibly resolved. The remaining challenges are plasma physics (achieving and sustaining the burning plasma conditions required for net energy gain), engineering integration (designing a reactor that can convert fusion heat to electricity economically), and manufacturing scale-up (producing enough HTS magnet tape to build commercial reactors at the required cadence). None of these challenges are trivial. But they are engineering challenges rather than physics uncertainty, and engineering challenges that are understood can be systematically solved with sufficient capital and talent.
The Investment Framework: Categories and Return Profiles
Across these four companies — Form Energy, Rondo Energy, Antora Energy, and Helion/CFS — a pattern emerges that is useful for framing energy transition investment more broadly. The opportunities that generate venture-level returns are concentrated in categories where the following conditions hold simultaneously.
First, the underlying physics or chemistry is clear and validated: the approach works, at least at small scale, and the remaining uncertainty is engineering rather than fundamental science. Iron-air batteries work; the question is whether they can be manufactured at sufficient quality and at sufficient scale. High-temperature superconducting magnets at 20 tesla have been demonstrated; the question is whether SPARC will achieve burning plasma.
Second, the market is enormous and structural: the demand for the technology is not contingent on specific policy or consumer preferences but on fundamental industrial and economic requirements. Electricity grids require firm capacity. Industrial processes require heat. These are not optional requirements.
Third, the competitive landscape is thin relative to the opportunity: despite the scale of the energy transition, the number of companies with credible technical solutions in long-duration storage, industrial heat decarbonisation, and fusion is still small. The venture markets in these categories have not yet reached the saturation that produces compressed returns.
For seed-stage investors, the practical implication is clear: the energy transition investment opportunity in 2025 and beyond is concentrated in the hard, capital-intensive, technically challenging corners of the landscape — precisely the places that conventional venture has historically avoided and that now represent the frontier where the most significant value is being created.
Conclusion: The Transition Is Just Beginning
Solar and wind have transformed the electricity generation landscape, but they represent only the first chapter of the energy transition story. The chapters that follow — long-duration storage, industrial decarbonisation, dispatchable clean power — are harder, more capital-intensive, and more technically uncertain. They are also larger in their potential impact and more richly rewarding for investors who engage with the technical depth required to identify and support the best solutions.
Form Energy's iron-air batteries, Rondo and Antora's thermal storage systems, Helion's direct-conversion fusion, and Commonwealth Fusion's HTS magnet programme represent distinct technical bets on distinct aspects of this deeper energy transition challenge. Each has attracted sophisticated capital in significant quantities — not because the outcomes are certain, but because the combination of technical credibility, market scale, and competitive positioning creates investment quality that the venture markets have rarely seen in any sector.
At Lumino Capital, our energy portfolio reflects this conviction. We back companies at the seed stage, before the bulk of the capital requirement has been established and before the competitive landscape has clarified, when the potential for creating positions of enduring value is greatest. The energy transition is the largest economic transformation in human history. The companies that solve the hard remaining problems will be among the most valuable ever created. That is where patient, technically literate capital should be deployed.