Industry news
Things I noticed and thought were interesting
Week ending 24th June
1, Behind-the-meter batteries. A small New Hampshire utility wants to sell or rent 1,000 Tesla batteries to its customers to avoid the need to upgrade a distribution link. The grid work would have resulted in costs to customers of around $700,000 a year ($700 a battery). Customers will benefit from being able to shuffle their electricity use between high and low cost portions of the day. The utility will also save money by taking control of the batteries at times when it needs to adjust power demand. In twenty years’ time, this will be the pattern worldwide: batteries will be provided by utilities or third parties who will offer ways the residential customer can save money but will retain final control over whether the battery is charging or discharging at any particular moment. There’s much still to be worked out, but some variant of the New Hampshire scheme will become universal.
2, Gas turbines. A symbolic week for the gas turbine industry. Siemens was forced to comment on rumours that it is proposing to sell its turbines division, a core part of its group for many decades. GE’s falling share price – it is down about 50% since this time last year -meant that it was removed as a constituent of the Dow Jones index for the first time ever. A further round of restructuring is planned at both companies, probably involving more job losses on top of the 20,000 cuts already announced. Just a year ago, the problems in this industry were completely unseen by the companies and their shareholders. This is the first major example of rapid destruction of an industry caused by the switch to renewables. It will not be the last; my bet is that hydrogen manufacture from fossil fuels is next. (The process is described here)
3, Hydrogen powered ferry. The world’s first hydrogen-powered ferry will be built to serve the Orkney islands, off northern Scotland. Surplus renewable electricity will be used to produce the hydrogen. The high wind speeds around the Orkneys mean that getting rid of this electricity represents a problem today. The ferry will use the hydrogen in a fuel cell made by Ballard and the electricity will drive the propeller. The electrolyser to make the hydrogen comes from McPhy, the leading French supplier. (For UK readers – this is a project funded partly by Horizon 2020, the EU innovation accelerator and involves participants from six EU countries. We are walking away from vital cooperation like this).
4, Island energy supply. Islands with no grid connection to a mainland tend to pay higher electricity prices, relying on diesel generators because electricity use is too low to justify a full sized gas or coal power station. Does it make financial sense today for these places to move to renewables plus storage? A new paper says that at today’s battery prices typical islands will see the lowest cost generation system by combining 40-80% renewables with diesel. Falling battery prices will make near 100% reliance on renewable generation financially optimal in the near future on almost all the islands studied. Importantly, most islands should install more wind than solar, partly because of the relatively high wind speeds on most islands.
5, Nuclear power. Two different designs of nuclear power station reached important milestones in China. A Westinghouse AP1000 achieved a sustained chain reaction (‘criticality’) on 22nd June. This is the first AP1000 to reach this stage and full production is expected by the end of this year. An EPR (essentially the same design as proposed for the Hinkley Point reactor in the UK) also reached criticality in China this month. The power plant is expected also to get to peak output before 2018 ends. Both these two reactors commenced construction almost ten years ago and are reported to have seen large cost overruns.
6, Vertical farming. Another large scale hydroponic farmer raised significant cash. Gotham Greens which grows in natural light greenhouses on the roofs of buildings pulled in $29m to expand its sites to urban areas across the US. One of its existing greenhouses sits on top of a large grocery store. The proposition, as with other next generation farmers, is putting farms next to customers and delivering fresh and low environmental impact salad leaves and vine fruits with extraordinarily high productivity in each square metre.
7, Energy forecasts. Bloomberg’s BNEF unit brought out its annual assessment of electricity trends. The headline was ‘50% by 2050’ with the projections showing that wind and solar will make up almost half electricity production by mid-century. Why so low, if as the survey says, they are now cheaper than fossil everywhere, or will be by 2025? The other curious thing is that BNEF suggests total investment in PV and wind will run at an average of about $260 billion a year over the next three decades, down sharply from the $300 billion actually invested in 2016 in renewables. I have no idea how the analysts square this inconsistency. And, once again, there doesn’t appear to be a single word in the report on the future of non-battery energy storage: absolutely nothing about power-to-hydrogen or synthetic fuels even though many utilities are now sponsoring trials. (see 9 below)
8, Methane leaks. Much more methane leaks into the atmosphere at gas production sites in the US than previous studies suggested. 2.3% is lost, compared to the 1.4% assumed. (Methane is a potent but relatively short-lived greenhouse gas. Leaks add to global warming). Most of the problem, according to the authors of a new study, comes at a small number of wells where maintenance is poor. Much of the leakage could be easily avoided. The 2.3% loss still probably makes natural gas better than coal from a GHG perspective. However this study only measured leaks at the production sites, not in gas pipeline systems or at the point of use. Atmospheric concentrations of methane are rising at about 5% a year and fossil fuel use - principally from natural gas - is probably responsible for about half this increase.
9, Power to methane. Engie subsidiary Storengy is a leader in underground gas storage. It launched a project to turn biogas (half methane, half CO2) into 100% methane. This is the first full-scale power-to-methane experiment in France. The methane will be stored in one of Storengy underground gas storage sites. The plant will also produce hydrogen from electrolysis for local industrial use. (In paragraph 8 above, I say that methane emissions to the atmosphere are an important cause of climate change. So any methane production, even if it uses biologically derived CO2, must be protected from any leaks prior to combustion, when it turns back to CO2).
10, Steel and carbon. Two different routes to steel decarbonisation. Construction started at the Swedish site where electricity, rather than coal, will be used to make steel. The consortium building the pilot plant is also looking to offer carbon-free iron ore pellets on route to near-complete decarbonisation of steel-making. The steel company in the partnership aims to be fossil free by 2045. The other route to low carbon steel is via capture of the CO2. Arcelor Mittal began work at a Belgian steelworks that will use the LanzaTech process that employs microbes to turn CO2 into ethanol. This will provide enough vehicle fuel to power about 2% of Belgium cars and will be the first large scale industrial carbon capture plant in Europe, according to Arcelor Mittal.
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