Industry news
Things I noticed and thought were interesting
Week ending 4th November 2018
1, Domestic batteries for grid services. It doesn’t make financial sense in most markets for domestic customers to install batteries at home. However some utilities are encouraging the growth of storage by paying for the right to use batteries for grid management purposes. EdF in the UK now offers a discount of £1,500 ($2,000) to purchasers of a 4 kWh Powervault battery in return for the right to remotely instruct the battery to charge or discharge at moments of grid instability. I’m not sure that even this discount is enough to give the owner an adequate return but we’ll see a continuing stream of arrangements like this around the world.
2, Blockchain energy trading. PJM, the largest US regional grid, began an experiment with the Swiss Energy Web Foundation to offer secure trading of renewables, including domestic solar but also large scale purchases and sale. The intention is to develop a system that allows ‘hundreds of thousands’ of solar and wind sites to trade in kilowatt hours, selling to customers which want to buy only renewable energy. It may take another few years but the involvement of one of the most respected grid operators in the world suggests that blockchain, or technologies like it, are close to commercial viability.
3, Electric trucks. Daimler said it would deliver its first 30 electric heavy trucks for the North American market. These are still trial vehicles, scheduled to be tested in real-world conditions. Unlike Tesla’s proposed futuristic vehicle, Daimler has tried to make these trucks as similar as possible to existing designs. Battery capacity is 325-550 kWh, compared a typical electric car of around 30 kWh. Range is over 200 miles/300 km.
4, Short range electric aircraft. European carrier Easyjet indicated support for a plan from Wright Electric to develop a 120 seater electric plane by 2030. This attracted enthusiastic support from the world’s media, even though Easyjet had made the same comments last year about Wright’s similar promise to build it by 2027. As I suggested when the Wright pipedreams surfaced last year, jet fuel has a power-to-weight ratio of over 30 times the current generation of batteries. Batteries will improve, perhaps by a factor of 5 or more. But this still leaves electric passenger aviation almost impossible to imagine for all but the smallest planes. As far as I can see, not a single media outlet across the world questioned the feasibility of the vague promises made by Wright nor asked why a large carrier such as Easyjet should publicly back such transparent nonsense.
5, Largest PV farm promised. The president of South Korea said the country would create the world’s largest solar farm. A 3 GW installation is promised by 2022, roughly double the size of today’s biggest site in China. 3 GW is slightly over half of one per cent of the world’s PV installations today and is approximately equivalent to the total new capacity put in place globally in 2007.
6, PV and hydrogen. Researchers at the Lawrence Berkeley laboratory demonstrated a solar device that can use sunlight both to make hydrogen and electricity. The overall efficiency that they showed was around 20%, an impressively high figure and not dissimilar to the best commercial silicon modules made today. The innovation from the laboratory looks remarkably simple because it finds a way of using electrons that are wasted in conventional solar-to-hydrogen cells.
7, Passing on carbon costs. With assets of about $1 trillion, the Norwegian Sovereign Wealth Fund is the largest in the world. It owns an average 1.4% of all listed companies worldwide. It disclosed that it was developing an analytical tool that would enable the fund to estimate how much increased carbon taxes would affect corporate earnings. The question that the tool seeks to address is whether companies with high relative use of fossil fuels, either in comparison to direct competitors or providers of alternative products and services, will be placed at a competitive disadvantage. A business that emits twice as much CO2 as its nearest competitor per unit of output will probably not be able to fully pass on carbon costs to its customers and its earnings will suffer. Amongst other impacts, this will increase pressure on companies to fully and accurately disclose the CO2 output from their activities and supply chains.
8, Coal power station retirements. The US will close over 15 GW of coal power stations this year and another 21 GW by 2024. But this is still only about 15% of current US coal capacity. A study from a Texas academic showed a proper carbon price of around $50 a tonne would make his state’s coal power stations uneconomic. And, perhaps surprisingly, a $50 tax by 2022 now seems just politically possible.
9, Hydrogen for shipping. Belgian shipping company CMB said it had a commercial hydrogen-fuelled ship in development and expected to be ready within two years. The ship will only use a hydrogen carrier as a supplement to conventional sources of fuel but the business indicates that it expects 70% carbon saving. This announcement comes after a successful trial with a small short-distance ferry which combusts hydrogen for power, rather than using a fuel cell. The head of R+D for CMD admitted that hydrogen was more expensive today than fossil fuels but said ‘it is just a matter of time before hydrogen becomes cheaper than the carbon alternative’. In a separate announcement, ABB and Norwegian research institute Sintef indicated they were going the alternative route and using fuel cells (rather than combustion) to supplement diesel propulsion in an onshore trial.
10, Bans on non-electric vehicles. One road in London’s central financial district (‘The City of London’) exceeded legal limits on air pollution 120 days last year, the worst record in the UK. Increasingly aware of the impact on health of poor air quality, the local authority that administers the City has proposed to ban non-electric vehicles across parts of the area by 2022. To test out the problems with this, the City said that it would introduce an early trial in April 2019. A street with low traffic volumes, probably chosen to minimise the opposition to the proposal, will be blocked to all but electric vehicles and some hybrids. The significance of this trial is the clear signal it gives to urban delivery businesses and to taxi drivers that the parts of the City may become impossible to access unless they switch to electric vehicles. Worldwide, most attention is paid to the switch to electric vehicles for personal transport. Actually, the switch will almost certainly be faster for light commercial vehicles, where the financial advantage and urban pollution benefits are greatest.
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