2026 Climate Tech Trends: Energy and Infrastructure

Climate tech has entered a new phase. It is no longer framed solely around emissions reduction. Rather, it is increasingly viewed as critical infrastructure. For the first time in several years, growth-stage investment outpaced early-stage funding, signaling the maturation of the sector into scaled deployment. As we look ahead to 2026, we see capital concentrating around reliability, resilience, industrial capability, and firm power. 

This post is the first of a two-part series examining climate tech innovation in 2026. Part One focuses on modernization of the U.S. energy grid, along with innovation in data centers and the energy sources that power them.

Grid Modernization

The grid has become a major bottleneck to growth. U.S. grid investment reached $115 billion in 2024 and is projected to exceed $128 billion by 2026, according to BloombergNEF¹. At the same time, interconnection queues now exceed 2 terawatts, more than double peak U.S. demand.

Utilities are responding by hardening physical infrastructure and digitizing operations. Sensors, predictive maintenance software, and automated fault isolation are becoming standard tools. Microgrids and modular storage systems are allowing hospitals, campuses, and communities to operate through outages rather than wait for restoration. 

The opportunity for venture-backed companies lies in making legacy systems observable, controllable, and intelligent without requiring full system rebuilds.

Startups and ecosystem organizations in our region contributing to this trend include:

• GridSeer – delivers an AI-driven software and analytics platform that improves reliability, reduces risk, and cuts cost in large energy systems.
• Joules Accelerator – accelerates the adoption of advanced, sustainable grid technologies. Joules connects early-stage, high-potential clean tech startups with utility, industry, and academic partners to drive commercialization and decarbonization.

AI and the Race for Power

AI is now a speed to power story. Global electricity demand from data centers is projected to rise sharply this decade. The International Energy Agency (IEA) estimates energy demand from AI-driven data centers could increase more than 130 percent by 2030 compared to 2024 levels². The conversation has shifted from how much power is needed to how fast it can be delivered.

Hyperscalers and colocation providers are seeking on-site generation, storage, and modular substations to avoid multi-year interconnection delays. Advanced transformers, solid-state power electronics, and intelligent energy management systems are moving from optional upgrades to critical infrastructure. Even if AI investment cools, electrification, reshoring, and digitalization continue to drive load growth.

Energy storage is playing a growing role in this buildout. Utility-scale and behind-the-meter battery deployments are accelerating as data center operators seek interim power solutions that allow facilities to come online months or even years earlier, reducing exposure to interconnection delays while preserving optionality for future grid integration.

Inside data centers, efficiency gains are becoming hardware-driven. Immersion cooling and next-generation thermal management are scaling as chip energy density increases. Startups optimizing power conversion and cooling at the physical layer are positioning themselves at the center of AI infrastructure economics.

Startups in our region contributing to this trend include:

• DGMatrix – enables fast, flexible, and software-defined power distribution for data centers and the grid through its novel multi-port solid state transformers.
• FlexGen – develops battery energy storage systems that drive critical infrastructure development and maximize energy efficiency both in-front-of and behind-the-meter.
• Shift Thermal– unlocks additional compute capacity at AI data centers using the existing facility power available by optimizing cooling system operation.

Nuclear and Clean Firm Power

The scale of AI and industrial load growth is renewing interest in firm, continuous power. Nuclear remains one of the few zero-carbon resources capable of providing baseload electricity at scale. Hyperscalers are signing early offtake agreements to secure long-term clean power.

Execution risk remains significant. Most small modular reactor (SMR) designs are still unproven commercially, and development timelines extend well beyond typical AI infrastructure cycles. Even so, utilities are re-evaluating nuclear as part of long-term planning.

For investors, the opportunity may extend beyond reactors themselves to supply chain innovations, digital controls, advanced fuels, and project delivery models that compress build timelines.

Startups in our region contributing to this trend include:

• Terrestrial Energy –  designing novel, molten salt SMRs to generate nuclear fission energy and heat. 
• Standard Nuclear – producing advanced nuclear fuels at an industrial scale. 

In Part 2, we will examine how national security, reshoring, and adaptation and resilience are reshaping climate investment beyond innovation in the power sector.