Our Top 10 ClimateTech Predictions for 2024

Computational platforms for decarbonised materials. As GenAI matures in 2024, we should see a huge chemistry unlock. AI/ML platforms that speed up and optimise materials discovery should proliferate (e.g. Dayhoff Labs, Citrine Informatics).

Battery breakthroughs. As EV adoption hits 20% and solar fundamentals soar, the batteries need better design, optimisation and recycling. Novel solutions (e.g. Thaleron) and progress from the old guard (e.g. Northvolt’s sodium-ion push) will set the tone.

Metamorphosis of tech 1.0 > climate 2.0. What do Jeff Bezos, Niklas Adalberth, Chris Sacca, Eric Schmidt, Mike Schroepfer, David Helgasson and Bill Gates have in common? These tech titans all launched climate VCs in 2023. The blatant lack of diversity in tech 1.0 is far from solved, but we are energised by early signs of progress in climate VC 2.0 - see Laurene, Sarah, Lila, Heidi, Siobhan, Kelly, Veery, Agate leading the talent migration.

A valuation dichotomy. Overhyped 2021 climate bandwagon plays will see painful down rounds and shorter runways (as elsewhere in tech) - cue distressed M&A consolidation - but with $33bn of dry climate powder ready to deploy, the music is still playing for mainstream climate.

The energy tech stack’s coming out party. Large software incumbents (Arcadia, Enpal) here are going deeper. The result? A decentralised, programmable grid. We’ve yet to see one Digital Power Plant (DPP) to rule them all, but progress to link up EV chargers, storage and renewable assets will further unlock bottlenecks.

Prolonged flight to quality in carbon. Low quality VCM is (rightly) out, high quality CDRs are in. We’ll see breakneck CDR growth from a low base and a new raft of tech - accelerated by cap stack / FOAK style enhancements (e.g. more Charm’s).

Coming of age for green hydrogen. The IRA bill has us expecting big things from green hydrogen and the corresponding venture opportunity set, including players like Powely. We think 2024 will see hydrogen + subsidies stabilise at cost parity - but only just.

The over-politicisation of climate. 2024 will be the biggest election year in history. If pitched opportunistically against the cost of living (e.g. Trump, ULEZ), the environment may end up a big loser - a Bolsonaro-esque candidate in a key Asian/African/LatAm climate-vulnerable zone could spell disaster.

Continued offshore wind woes. Offshore wind suffered big setbacks in 2023 (5.5 GW of US project cancellations and writedowns). Supply chain issues and interest rates will continue to plague the industry in 2024. Can the EU’s Wind Power Package alleviate any of the pain?

Make or break for nuclear: Can big rounds from Commonwealth/First Light and COP help a nuclear resurgence? Despite hiccups at NuScale’s Utah project, we predict more US states coming online (see Vogtle in Georgia). Across the Atlantic, we expect some soft reversal of Germany’s 2023 phaseout