Industry news
Things I noticed and thought were interesting
Week ending 14th June 2020
1, Battery barges. Finnish marine power company Wartsila and its partners will set up a network in the Netherlands that will enable electric inland barges to load and offload containerised battery packs. Barges will use the electricity and then swap the container for a fully charged equivalent at the next charging location. While on the shore, the batteries will be used for grid stabilisation. The ships will pay for the electricity and the rent of the container. The first customer will be Heineken for a route between a brewery and the coast. (Thanks to Thad Curtz).
2, Long-life EV batteries. Industry leader CATL said it would be selling a battery with a 2 million kilometre life. This compares to the 150,000 kilometres usually thought to be the likely life of an EV power pack. It says it will charge a 10% premium for the product, which is probably to be incorporated first in the Tesla cars made in China. The product also appears to contain little or no cobalt. A 2 million kilometre life has advantages that will include the possibility of reuse in a second or third car at the end of life of an EV. 2 million kilometre batteries should mean that the demand for recycling will be much less than expected. (Thanks to Marcus Simmons)
3, Synthetic aviation fuel. Climeworks, the direct air capture specialists, and Sunfire, a power to liquids pioneer, joined two large Norwegian companies to launch a synthetic fuels venture in the Oslo area. By 2023, it aims to provide enough aviation kerosene to cover 50% of the needs of the five busiest links inside Norway. This will require about 10 million litres of fuel, a figure which the new venture wants to expand to 100 million by 2026. (World aviation fuel consumption is about 400 billion litres a year). The Danish plan for renewable fuels detailed in the last newsletter is a larger venture but this Norwegian scheme promises earlier delivery. When opened, it will be the largest single synthetic fuels project in the world. I've asked for details of the expected cost of the fuels but haven't had a response yet. The venture in Denmark admitted the aviation kerosene would be at a premium to conventional fuel.
4, US renewables. A report from UC Berkeley looked at the costs of 90% decarbonisation of the US electricity grid by 2035. It suggested that without including any environmental value the cost of 90% renewables plus nuclear would be about 10% higher in 2035. But after putting a price on the costs of pollution (CO2 plus other pollutants), a renewables dominated grid would be about 25% cheaper at around $48 per megawatt hour. The report puts the capital cost of the US transition at around $1.7 trillion, most of which goes to build 1100 GW of wind and solar at the rate of about 70 GW a year. (Current worldwide renewables installation rates total about 200 GW). The researchers estimate the direct health benefits of the transition to be worth about $1.2 trillion, including almost 100,000 avoided premature deaths from local pollution. The switch also creates half a million more jobs.
5, EVs in Europe. Electric vehicle continued to gain share in almost all countries in Europe, even as the total numbers of cars sold remains at its very low level. In the UK, pure battery vehicles took a 12% slice of the market and hybrids a further 4%. Sales were up 20% year on year. The increase in sales left EVs only just behind diesel cars for the month of May. In Norway, electric vehicles took almost two thirds of the market, up from under half a year ago. The Netherlands saw EVs win 14% of sales, even though volumes were down. The suspicion persists that manufacturers - other than Tesla – are holding back EV availability in European markets to ensure that they only just meet the EU’s requirements for average emissions across their entire range. One well-informed automotive industry publication saw the dangers of this, suggesting this tactic leaves a large gap for Chinese manufacturers to happily fill. One Chinese brand captured 10% of the UK’s EV market in the first quarter of the year.
6, Community energy. Ripple Energy in the UK opened a community share issue with a very unusual feature. Instead of dividend payments from a 2.5 MW wind turbine, it proposes to offer a reduction in annual electricity bills. Shareholders are obliged to get their power from a specific supplier which then discounts the bill by an amount depending on the price that the turbine’s electricity was sold at. The higher the price of electricity, the greater the reduction in the shareholder’s expenditure. So the financial returns are critically dependent upon the high wholesale prices. The assumption in the share prospectus is that the turbine’s output can be sold for £65 ($80) a MWh. But in today’s circumstances, the open market price of UK power is around £25 ($31), and long term contracts for renewable electricity are being struck at around £35 ($44).
7, Thyssen and RWE hydrogen. Thyssen Krupp is one of the largest steel producers in Germany with a total output of around 11 million tonnes a year. It announced an agreement with utility RWE to commission a 100 MW electrolyser to make hydrogen to replace coal in one blast furnace. This will allow the manufacture of about 50,000 tonnes of low carbon steel a year, or 0.5% of the company’s output. This demonstrates just how large the electrolyser industry will eventually become. To replace coal in German steelmaking (40 million tonnes a year) will require about 80 GW of electrolysis equipment, twice the government’s recently announced target for the entire country in 2040. And, of course, Germany will also need its renewables capacity to rise by at least an order of magnitude to provide the clean electricity required. No wonder that Germany made an informal inquiry of the Scottish government recently about the possibility of importing hydrogen made from electricity generated in UK offshore wind farms.
8, Vertical farming and post-Covid health. Jersey City, an ethnically diverse town close to Manhattan, said it would put ten vertical farms into city buildings to help improve the diet of a population which has been severely affected by the virus. The food from the individual farms will be distributed at no charge to disadvantaged members of the community. The farms are small scale, producing in total only about 8 tonnes of produce a year. However this is the first time I have seen urban vertical farms used in a direct way to try to improve local public health.
9, Indian solar. After a year or more of slower growth, the Indian government – through its solar development arm – awarded Adani Green Energy a contract to develop 8 GW of photovoltaics and build extra solar cell manufacturing capacity of 2 GW a year. Adani said it was on target to get to 25 GW of solar by 2025, making it the biggest owner of renewable assets in the world. It also suggested that the win would enable it to create 400,000 jobs, directly and indirectly.
10, EV charging at petrol stations. As part of its unexpectedly large green stimulus, Germany is demanding that all petrol/gasoline stations incorporate EV charging. My past experience suggests that this is a mistake. EV charging and the tight layout of most refuelling locations, particularly in cities, are highly incompatible. The safety requirements of having powerful electricity sources close to flammable liquids impose expensive costs. The right location for powerful chargers are where drivers actually want to spend an hour recharging their vehicles. This means outside supermarkets, restaurants or gyms, not in the often polluted and unpleasant surroundings of a gas station.
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