Industry news
Things I noticed and thought were interesting
Week ending September 19th 2021
1, Solar PV costs and efficiency. An Australian start-up established a new record for the efficiency of a conventional solar cell. SunDrive's 25.5% beats Longi’s 25.3%. This is a staggering achievement but the cell is also remarkable for its use of cheaper copper, rather than silver, as the medium for collecting the electricity. In a standard panel of around 350 watts, about 10% of the cost is currently silver. And since photovoltaics already use about 8% of world silver, future increases in PV sales will push up the price of the metal. If the new solar cell from SunDrive is durable, and can be made using existing equipment, it will continue the downward trend in PV prices for silicon panels, and possibly even threaten the economics of producers using cheap perovskites as an alternative. (Thanks to Gage Williams).
2, Tata Steel Netherlands. Tata Steel, one of the world’s top producers, announced that it had decided to switch its large plant at IJmuiden to ‘direct reduction’ using natural gas and eventually hydrogen. Earlier this year it had indicated it might continue to use coal with carbon capture and storage. The proposed switch to direct reduction is a confirmation of a growing trend in world steel towards the use of hydrogen, in this case strongly pushed by the need to reduce local lead pollution from burning coal. Tata didn’t reveal any figures about the cost of the transition probably because it is in negotiations with the Netherlands government about financial support. Given that both Germany and Spain have promised large sums to Tata’s rival Arcelor Mittal to convert to hydrogen in recent months, the EU is unlikely to object to assistance from the Netherlands. Tata indicated it would have to commence its operations using natural gas as the fuel and reducing agent but would switch to green hydrogen as soon as adequate offshore wind capacity is available. This move by Tata suggests a growing view in the steel industry that hydrogen is going to be the eventual winner of the decarbonisation race.
3, Agrivoltaics. Combining photovoltaics and some types of agriculture looks possible. A new project in Germany puts PV panels above eight different varieties of apple, both to confirm the impact on fruit growth and to examine whether the panels can help mitigate some of the effects of climate change. For example, the array can be used to protect the apples against intense rain. Among other uses the electricity will power a tractor and the watering system. The project developer BayWa r.e. has installed PV on several other farms. In the Netherlands, a 1.2 MW solar field sits above redcurrants. One advantage is that the panels can reduce peak temperatures on hot days by 10 degrees.
4, Maltese hydrogen pipeline. The island of Malta has begun a preliminary study of a pipeline link to Sicily, about 150 km away. The pipeline is intended to eventually transport green hydrogen from ENI’s Gela refinery to replace the LNG currently imported to Malta. Adding the capacity to transport hydrogen is forecasted to add about 6% to the cost of a natural gas-only pipeline. The particular significance of this scheme is that it the first to propose a new pipeline to gain access to a future European hydrogen network. The electricity power plant that is the destination of the pipeline uses Siemens turbines that can be converted from burning natural gas to hydrogen.
5, 40% solar US. The US Energy department (DoE) looked at the possibilities for solar power in the US grid. It suggested a target of 1000 GW of US capacity by 2035, requiring annual installations over four times that of 2020’s record 15 GW. 1000 GW would provide about 40% of the US’s total need for electricity, compared to 3% from solar today. Up to 1% of US jobs would then be in the solar industry. The benefits from improved air quality could be worth a cumulative $1.7 trillion by 2035, equivalent to about 50% of UK’s annual national income or almost 8% of the US. No electricity price rises would be necessary, says the DoE.
It seems to me that stressing the benefits is the right way to push the energy transition forward. Carbon Tracker makes a similar point in a recent paper. The think tank says that ‘gain’ not ‘pain’ must be the dominant theme of November’s COP meeting in Glasgow. The key question is ‘how can we bring forward this great wave of innovation and wealth generation to avoid climate chaos’.
6, Chevron. The oil major increased its commitment to lower carbon technologies. It announced a budget for capital expenditures of about $1.5bn a year to 2028, more than three times the previous target. But $1.5bn is still only about 10% of its proposed spend on fossil fuel projects. Nevertheless, it may be worth noting that four out of the last five corporate press releases relate to decarbonisation initiatives. One of these is the very interesting Utah hydrogen storage venture with Mitsubishi Power and another investor. The site sits above some of the world’s most usable salt caverns, probably the lowest cost way of storing H2 and next to the Intermountain power plant, which is slated to be gradually converted to burning 100% hydrogen. Chevron’s plan seems to be to become the operator of a distribution network that takes hydrogen produced in the region to the areas of greatest demand on the west coast of the US. (Thanks to Thad Curtz).
7, Volta trucks in London and Paris. Volta is a Swedish headquartered electric truck company. It said it would introduce a trial fleet of heavy 16 tonne vehicles into central Paris and London in early 2021. Using technology from Proterra, the US electric bus manufacturer, Volta offers a simple design with far better visibility for the driver. (80% of cyclist deaths in London are caused by heavy vehicles). The range between charges, at around 150 km on a cold day, isn’t huge but is probably sufficient for very dense urban delivery rounds. All being well, full scale production will start in Austria by the end of 2022. No mention of price in the announcement.
8, Tree planting. No-one argues against the idea of planting more trees. But reforestation schemes can be strikingly counter-productive. An article in Nature (paywall) examined the results of projects in the Indian state of Himachal Pradesh in northern India and showed ‘that decades of expensive tree planting programmes in this region have not proved effective’. The percentage of forest cover has not risen and the composition of woodlands has shifted slightly towards coniferous types that are less useful to local populations. A large percentage of the trees planted appear not to have survived their first years in the soil. One of the authors of the paper wrote an interesting Twitter thread. The core lesson seems to be that increasing woodland cover requires the local community to willingly lead the tree planting efforts.
9, Partial decarbonisation of cement production. Cement production causes emissions partly from the combustion of fuel to heat raw materials and partly from the CO2 given off as the carbonates break down. Eventually hydrogen will be used as the source of heat in cement kilns but the capture of the CO2 from the production process itself is more difficult. French producer Vicat announced a joint venture this week with an EdF subsidiary to use about 40% of the carbon dioxide from a cement kiln on the Rhône near Lyon to make synthetic methanol. It expects to produce about 200,000 tonnes a year, about a quarter of France’s current demand, using locally made hydrogen from electrolysis alongside the CO2. Will the methanol be sufficiently ‘green’ to make it eligible for Maersk’s 8 new dual fuel container ships requiring 360,000 tonnes a year? I have asked Maersk and will report any response.
10, Basalt. In a previous letter I wrote about the prospective importance of using basalt dust spread on fields as a way of naturally capturing billions of tonnes of CO2. I couldn’t find any examples of current experiments. Reader Tanguy Tomes suggested one good example in western Wales where a charitable venture is spreading dust in an area that will be reforested. In addition, the experiment will add microbes and mycorrhizal communities (tiny organisms that work symbotically with tree roots) transplanted from existing forests to see whether this encourages growth and thus carbon storage. The basalt dust comes as waste from a local quarry that makes road aggregates.
In last week’s newsletter I gave a very imprecise summary of some McKinsey work on electric vehicles. As many readers pointed out (thank you), it was unclear whether the figure of 80% that I quoted for the increased emissions from EVs referred to their operation or to their manufacture. I should have emphasised that EVs save CO2 in use, even in areas with coal-generated electricity. The 80% increment refers to the typical emissions from the manufacturing cycle, largely because of the batteries. Apologies.
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