In the face of a U.S. administration that is openly hostile to efforts to reduce global warming, Bill Gates is attempting to save the green energy industry with a new billionaire-backed fund called Breakthrough Energy Ventures. His plan is to make green energy cheaper than fossil fuels in the future. He claims that's possible, but he'll have to overcome some big challenges to get there.

For people concerned about climate changed, November 8 was a particularly scary day. President-Elect Donald Trump has said that climate change is nothing but a "Chinese hoax," and in case anyone thought he didn't really mean it, he nominated Scott Pruitt, Oklahoma attorney general, to head the Environmental Protection Agency. That's likely to lead to a worsening of global warming, critics say, because Pruitt is a prominent climate change skeptic who has consistently supported oil and gas companies. In October, for instance, he told a radio audience that there was a lot of debate about "this global warming trend that the administration talks about, if it's true or not."

With environmentalists and green energy proponents reeling from the one-two punch of Trump's election and his choice of Pruitt to head the EPA, Gates' announcement might seem like a swift reaction in the face of a threat. But while the timing may well be a response to current events, the fund itself has been in the works since at least November 2015, when he announced his plans for the fund at the United Nations climate talks in Paris. He says now that the fund will invest and find ways to make breakthroughs, even in a hostile political environment.

"We want to be cheaper than coal or gasoline for transport," Gates told CNBC earlier today. And even though fossil fuel prices remain low, he said, "there are a lot of paths that make us feel confident we can get there."

For that to happen, Gates and his partners will need to solve these big problems:

1. Profitability

Thus far, backing green energy startups hasn't been a winning proposition. An infamous MIT study showed that venture capital companies have lost more than half of the $25 billion they've invested in that sector. Meanwhile, the price of fossil fuels remains low, making it tough for green energy to compete even with government subsidies supporting them. And those subsidies are likely to evaporate under the new administration.

As Gates suggests, the only way to overcome the profitability problem is to make green energy much, much cheaper than it is today. With that in mind, the fund plans to invest in nuclear fission and fusion as well as solar and wind power. And they plan to invest a lot. Breakthrough Energy Ventures will have $1 billion to invest, with Alibaba founder Jack Ma and VCs John Doerr and Vinod Khosla as partners in the fund.

2. Storage

If you've ever owned a smartphone or a laptop, you already know that humanity's formidable command of communications, graphics, and artificial intelligence technologies far outstrip our ability to build batteries.

The human race has gotten pretty good at storing coal and petroleum and gasoline. When it comes to storing renewable energy, not so much. Gates admits that one of his paths to cheap energy, deploying vast numbers of solar arrays and windmills and connecting them all to an improved grid would require storage "a hundred times better than anything that exists today." And so, he concedes, it might not happen.

But, he says, there are two other alternatives. The first would be to use natural gas to supplement green energy at peak times and "sequester" that gas to prevent any carbon emissions. The second--and much more intriguing--would be to convert solar energy into liquid fuel. That may sound far-fetched, but it's already been done in the lab and, according to Gates, the technology is almost ready for a startup to take it on. It's an exciting prospect because the infrastructure currently in place to store petroleum and gasoline could be used to store this solar liquid fuel instead.

3. Timeline

Perhaps the biggest problem with investing in green energy is that, even if an investment pays off, it will take a very long time to do so. That's a problem in the current venture capital system, where funds are set up to last 10 years and investors who put money into a startup are always looking to reap returns in an "exit" when that startup is acquired or goes public. Average time from investment to exit is seven years, which isn't long enough for green energy. So Gates and his partners are taking a much longer view. They're prepared to invest in startups over a longer period, and the fund itself is set up to last 15 to 20 years instead of 10.

Climate change is a huge, intractable, and deeply depressing problem. But then, so is poverty in the Third World, and Gates has tackled that mega-problem with patience and perseverance and managed to effect real change. If anyone can lead a team to slow or stop the catastrophe of climate change, my money's on him.