For the past seven years, I’ve attended technical conferences hosted by the Massachusetts Institute of Technology. Cambridge is the perfect location for innovation; full of students, grad students, post-doc students, and academic professionals who are collectively brewing and unleashing new scientific breakthroughs that will forever change the world.

Yet these are not just purely academic endeavors. They make a significant commercial impact as well, which can vastly reward their earliest investors. Boston sits as one of the world’s elite hubs for biotechnology and computing, and it has produced excellent investments in the public markets that have included Biogen, Akamai, and Moderna. (It is also the home town of my most recent 7investing recommendation for October).

Last week I attended MIT’s ClimateTech 2023 conference. It was outstanding; full of positive energy from a room full of technical folk who were ready to make a global impact.

The conference ran for two full days. I’ll be writing about it all week and have included my complete notes here for 7investing subscribers.

Yet for those who would just like a 20,000 foot recap, here are my Top 3 Takeaways from the 2023 MIT ClimateTech Conference.

1: There is an Unprecedented Demand for Electrification

Electrification means displacing processes that are currently burning fossil fuels and giving off emissions with others that consume renewable energy instead. Our manufacturing industry heavily consumes natural gas and other fuels as input feedstocks, but will soon be transitioning to using renewable power to create the same output products.

The most well-known example of this is electric vehicles, whose batteries use renewable energy to turn motors rather than gasoline used by internal combustion engines. Other examples include companies like Dow Chemical (NYSE: DOW) and Microsoft (Nasdaq: MSFT) showing an interest in small modular reactors to produce the power required for their Gulf Coast operations and their cloud computing data centers (respectively). This could be an opportunity for NuScale Power (NYSE: SMR), who is already winning power-providing contracts that will go into effect by the end of the decade. Other manufacturing opportunities could include the production of steel and fertilizer.

2: There is Massive Amount of Funding Available for Battery Storage

Battery storage serves a wide range of products and applications — which ranges from cell phones to home power backup to the electric grid. There are different chemistries that will likely best-fit each of these applications on a bespoke basis. And there’s more than enough funding to go around.

One initial opportunity is in grid storage, which could be served by zinc, iron, lithium-ion, or sodium-ion battery systems — and this could be an opportunity for publicly-traded companies like EOS Energy Enterprises (Nasdaq: EOSE). Another opportunity is for batteries used for electric vehicles, which could be solid-state lithium-sodium or lithium metal — which could be an opportunity for Tesla (Nasdaq: TSLA) or QuantumScape (NYSE: QS).

3) The “Learning Curve” Will Determine the Best Investments

It’s hard to know in advance which publicly-traded companies will emerge as the best investments from the ClimateTech space. But we do know that energy is a commodity market, largely based on the cost and environmental-friendliness of each electron that gets generated, transmitted, and used.

The most important factor for new technologies will be how effectively they can scale up; i.e. reduce their operating costs per unit of output. Government subsidies and large customer contracts tend to accelerate the learning curve in the short-term; although innovative science tends to win in the long-term.

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