In today’s issue, I’m going to show you which climate tech trends will dominate the developments in 2023.
To increase your success in the cleantech business, you should know all about these cleantech trends.
By knowing what is currently going on, which technologies wait around the corner, and which are only hypes, you will be able to better navigate the waters this year.
1) Renewable Energy Startup will accelerate the roll-out of solar and wind worldwide
Until a few years ago, the only way to get solar PV on your roof was to buy the whole plant upfront and finance it with a loan if you did not have the cash. Unfortunately, most people don’t have the cash and don’t want to take on loans unless necessary (not everyone is as credit-card-affine as US-Americans 😉).
However, in recent years it became widespread practice for contractors and energy providers to also offer energy services like renting or leasing PV plants. Many energy providers introduced these business models, simply because they were a disruptive threat to their traditional business models, and they wanted to retain their customers.
But other companies, like Enpal (Germany’s first green-tech unicorn), have made it extremely simple to rent a PV plant through their digitalised process. With millions of venture capital, they are massively rolling out solar PV to consumers and households who previously shied away from the investment.
Current high electricity prices and new incentives, like 0 % VAT on solar modules in Germany, have boosted their business and will continue to do so over the next few years.
Whether it’s leasing models, co-ownership & fractional shares, or AI-based power controls for households: They all will see strong pushed forward making solar and wind more reliable and affordable for private end users as one of the primary climate tech trends in 2023.
2) Energy storage startups bring battery storages into every household
While utility-scale energy storage is also picking up speed, the real elephant in the battery storage world are households.
Due to retail electricity prices being much higher than wholesale prices, households can save a lot of money if they combine their solar PV plant with a household battery to avoid wasting any solar energy. But like a PV plant, investment costs are high for battery storages.
Just like PV renters, startups emerged in the past years who offer storages in a leasing model or control them with smart AI algorithms. Some even aggregate them in “swarm batteries” which allow for participating in control energy markets, generating additional revenues for their owners.
In combination with 1), these startups are reducing the hurdles for many residential consumers and will strongly accelerate the adoption of self-consumed solar power, following the trend of the past years.
3) Electric vehicles will dominate sales in many more markets
Electric vehicles are taking the world by storm. While the European Union agreed to phase-out new Internal Combustion Engines post 2035, the growth of the EV market might cut that timeframe even shorter.
In Norway, 87.8 % of all new cars in 2022 were electric. In Germany, electric vehicles made up 26 % of all new cars in 2021, displaying a stunning growth compared to 3 % market share in 2019.
With many major car manufactures switching their strategies to a 100 % electric future over the past years, this trend will continue and EVs will soon become the dominating force in most developed countries, soon to be followed by emerging economies.
Startups in all areas of automotive are enabling this development by pioneering improvements in battery technology, charging infrastructure, and vehicle-to-grid integration.
In combination with the build out of production capacity and the reduction of lifecycle cost, these startups shift up the gears on the EV market.
4) Carbon capture & storage will take up speed in many industries
While in most cases, i.e., power generation from natural gas or coal, carbon capture and storage is not economically viable, it will still be needed in the future.
“Where if not in fossil fueled power plants?” you might ask. And the simple answer is:
Everywhere, where it is cheaper to capture, and store carbon dioxide than to replace an carbon-emitting process with a carbon-free process.
Removing a ton of CO2 from the atmosphere currently costs up to 1000 €/t. Buying the right to emit a single ton of CO2 in Europe currently costs around 75-80 €/t. The cost of capturing CO2 and storing it safely is somewhere in the middle between those two, depending on the application and the concentration of CO2 in the gas from which it shall be removed.
For many industries, including the power sector, CO2 allowances prices of 80 €/t already provide a good incentive to switch to carbon neutral processes, as carbon-free alternative processes become competitive. This climate tech trend was already observed over the past years but will become even clearer in 2023.
However, in some sectors, there is as of now no alternative carbon-free process available. This is especially true for the cement industry, some chemical industries, as well as agriculture and farming.
To capture or compensate the unavoidable emissions from these sectors carbon capture & storage will be required. Increased carbon prices and the fact that the EU is aiming for tightening the carbon allowances market for all industries will be driving forward more innovation in this sector.
You should not expect carbon capture & storage to make up a large share of our emissions next year, but it will be needed to compensate for the unavoidable 20 % of all our emissions in the long term. Otherwise, we will not achieve net-zero.
5) Agriculture & food will see new climate-friendly solutions
Climate tech startups are tackling climate issues related to agriculture and food production, including developing more sustainable and efficient farming practices and reducing food waste.
Last year, increasingly more plant-based meat & dairy alternatives were available all over the world. And they are one of the few low-carbon alternatives we have when it comes to reducing the emissions of our food production.
Plant-based meat alternatives, and not-so-common “lab meat”, but also improved feed for cattle and other animals, will help the food sector to reduce its currently unavoidable emissions.
Personally, I often buy plant-based meat alternatives, as they cover my desire for the occasional burger or mortadella. But I am still eager to try my first lab-grown beef burger at some point. If you know someone who is working on this, let me know at LinkedIn!
Climate change is fought at hundreds of frontiers. The five climate tech trends above are only an excerpt from all developments we can expect to see. To summarise:
- The roll-out of renewables and storage solutions will be further accelerated by new business innovations and relaxing global supply chains
- Electric vehicles will conquer higher market shares, more markets, and sectors
- Unavoidable emissions and their cost will drive innovations in carbon capture & storage, as well as new agriculture & food solutions
If you want to work on solving climate change, you can choose any one of these fields. They all need your work and entrepreneurial spirit!
See you next week. 😉 (Haven’t subscribed to The Climate Innovator newsletter yet? Join here!)