Industry news
Things I noticed and thought were interesting
Week ending 26th September 2021
1, Reducing clothes purchasing. It’s still rare for trade associations to appeal for measures that will shrink the size of their industry. An offshoot of the British Fashion Council did just that last week, saying that the most effective way for the UK fashion industry to reduce its ‘individual and collective detrimental impact on the environment is through reducing consumer demand for new physical clothing’. It points out that fashion is responsible for about 5% of global emissions and calls for the industry to halve the volume of new clothing sold, fulfilling demand with recycled and refashioned clothes. Easier said than done; the careful research contained in the document showed that among ‘intense’ buyers of clothes, 17% would never wear an item again if it had been shown just once on their Instagram feed.
2, Synthetic fuels. Maersk invested in the US startup Prometheus Fuels, now said to be valued at $1.5bn. Prometheus says it will produce liquid hydrocarbons at costs that match fossil fuels within months. The technology is very different to other startups seeking to make fuels using CO2 and hydrogen. It captures both carbon dioxide and water vapour from the air and combines them to make hydrocarbons in a process called aqueous CO2 electrolysis. The entrepreneur has suggested a maximum near-term efficiency of about 60% to the process, suggesting a litre of petrol/gasoline will need about 15 kWh of electricity to make. In low cost solar locations, this will cost no more than 45 US cents, less than a quarter of today’s US wholesale gasoline prices. This is one to watch carefully.
3, The price of natural gas. What has caused the unprecedented spike in price? There’s surprisingly little commentary on this and I have not seen any article that notes that climate change is a big part of the reason. Raised levels of demand in Asia are partly due to uncharacteristically high temperatures raising air conditioning needs. This is also the case in the US. Drought in Brazil has meant its large hydroelectric power supplies have been cut to a fraction of normal levels. Brazil and Argentina together are now importing far more gas than China and taking about 1% of world production. (This is an approximate estimate. I couldn’t immediately find reliable data).
4, Electric ferries. In more a symbolic act than a substantial change of policy, Shell said it would buy three 200 seater electric ferries to take employees to its Singapore site. Of more significance, Stena Line signed a contract to put electric ferries on a 3 hour route between Sweden and Denmark. These are big vessels, carrying vehicles and up to 1,500 passengers and the battery size of 60-70 MWH seems to be far larger than any other electric ship on the seas today. Stena indicated that the cost is likely to be about 20% more than conventional equivalents. Recharging time will be about an hour, requiring new powerful electricity connections into the ports.
5, Green steel. Two interesting articles in mainstream US publications on decarbonising steel, both focusing on the pioneering companies in Sweden, SSAB and H2 Green Steel. Useful data is spread throughout the writing and for the Wall Street Journal and the New Yorker both to cover the topic in a single week suggests growing awareness of the importance of steel to the global transition. SSAB’S technology head said that he expects green steel to initially cost 20-30% more. That’s before hydrogen prices decline as a result of falling renewables and electrolyser costs. Since a typical American car contains over a tonne of steel, this might add $150-$200 to the cost of a car, assuming metal prices return to usual levels. Will buyers be prepared to pay the relatively small extra price? Another Swedish interviewee seemed confident that the premium will not deter customers, saying that ‘Green steel is becoming a really hot topic in everyday life’ in Sweden. Car manufacturers including Volvo and Mercedes are already committed to buying green steel made using hydrogen.
6, Solar share in Australia. On Friday 24th September rooftop solar provided a 31% share of electricity supply across the main national network just after midday local time. Ground-mounted PV generated a further 12%, with renewables as a whole providing almost 62% of power needs, a new record. (I saw this on RenewEconomy).
7, Hydrogen plus renewables. As most of the world struggles with the unprecedented rise in natural gas prices, I wrote an article that assessed how much renewables capacity will be needed to cover the electricity demand of the UK over the course of a year. Using half hour electricity demand and production data for the year to 30th June 2021 provided by Drax Electric Insights, I calculated that to meet all the country's needs over this period would have required about 4.5 times as much solar and wind power as the UK has today. I assumed that in periods of surplus (about 60% of the time) the unused power would be diverted to electrolysers to make hydrogen. When renewables were insufficient, the H2 would be used in gas turbines to make electricity. The calculations are incomplete but show that the UK would only need to produce about 25% more electricity than today to make up for efficiency losses converting to and from hydrogen. This would be the cheapest way of fully decarbonising the grid. (Thanks to Iain Staffell of Imperial College for providing me with the Drax data. Errors are all mine).
8, Indoor vertical hydroponics. Growth of indoor agriculture has been rapid and new ‘farms’ are sprouting all over the world. But the range of crops available in shops is still largely limited to green leaves and some berries. This will change. Industry leader AeroFarms announced last week that it would start growing hops, an important ingredient for beers, for the British craft brewer Goose Island in a vertical farm .
9, China hydrogen. China currently makes about 25 million tonnes of hydrogen a year, about a third of the world total and probably contributing about 1% of global CO2 emissions. Its Hydrogen Alliance, a body with links to central government, announced a target of 100 GW of electrolysers by 2030. (Today’s installed capacity across the world is less than 1 GW). If operated continuously, they would produce enough hydrogen to match current production, a striking ambition. But, more likely, these electrolysers will be dependent on renewable supply, probably reducing potential H2 production to 50% or less of today’s needs. Nevertheless, this is an ambitious plan that suggests an intention to dominate electrolyser production in the same way that China now largely controls PV panel manufacture. For comparison, Germany aims for just 5 GW by 2030, one twentieth of China’s ambition.
10, EV shares in major European countries. In many places new auto sales remain depressed but the share held by EVs is rising increasingly rapidly. In France and the UK, EVs captured just under 20%, representing an almost doubling of market share in a year. In Germany, the number was higher at almost 28% of total sales. The Netherlands reached 30%. Pure battery cars, as opposed to plug-in hybrids, are tending to grow faster and are now selling better than diesels in many countries.
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