Industry news
Things I noticed and thought were interesting
Week ending 13th September 2020
1, Hydrogen from North Africa into Europe. Italian natural gas giant SNAM sponsored research which argues that hydrogen made from solar in North Africa and exported by pipeline into Italy can be 10-15% cheaper than European production. The head of SNAM, Marco Alvera, is a very enthusiastic backer of the rapid development of a hydrogen-based energy system and he comments that ‘thanks to its geographical position, the strength of its manufacturing and energy sectors, and a widespread gas transport network, (Italy) has the potential to become a continental hub for green hydrogen and an infrastructural bridge with North Africa, taking on an important role in the European Hydrogen Strategy.’
2, Carbon sequestration from reducing animal products in the human diet. Animals require large amounts of land, both for pasture and for crops for their food. A group of researchers estimated (paywall) that between 332 and 547 gigatonnes of CO2 could be sequestered by 2050 on land that is currently used for maintaining animals. The sequestration would arise because woods would replace pastureland and arable land used for growing animal feed. This is a larger number than we might have expected, equal to perhaps 13 years of current emissions from energy use. Earlier work from some of the same researchers had shown that the converting animal lands to forestry could counterbalance 12 years of UK emissions. Rapid reduction of meat and dairy consumption is potentially a hugely important means of sequestering carbon. (Thanks to Anthony Simpson).
3, Global transition forecasts. DNV produced its assessment of current energy trends. It said that oil demand probably peaked in 2019 but that natural gas would not see a maximum until after 2030. If today’s trends persist, emissions from energy use in 2050 will still be about half today’s levels, implying that the world will comfortably exceed a target of 2 degrees of warming. DNV picked out three particular areas of insufficiently rapid progress – heat demand in some industrial processes, the heating of buildings and heavy transport. Personally, I think DNV is too pessimistic about the third of these blockages; the world is seeing very rapidly increasing emphasis on the electrification of even the heaviest vehicles. I thought that its assumption that about half of all cars sold in 2032 will be electric also looks too downbeat. Almost 5% of all cars sold in Europe this year will be purely battery powered, almost double last year’s level. At the current rate of change - and assuming successful large scale entry by Chinese manufacturers into the market - a 50% share may be achieved at least six years earlier than this in Europe.
4, Green Hydrogen Systems of Denmark. Two big wins for this Danish electrolyser company in the last few weeks. Turbine manufacturer Siemens Gamesa picked it for the first trial of an ‘islanded’ wind turbine that exports power only to an electrolyser for making hydrogen. Green Hydrogen Systems also recently announced a successful experiment which sees green methanol (a partial substitute for petrol/gasoline or a precursor to many other fuels) made from CO2 and hydrogen. The company said it hopes to start using CO2 from a biogas plant in its next installation for making methanol.
5, UK offshore wind plus hydrogen. Somewhat later than other NW European countries, the UK is starting to investigate the economics of building an energy system entirely based around renewables for making electricity and hydrogen. A government body working alongside the offshore industry said that green hydrogen might possibly be fully cost competitive by 2030 with hydrogen made with gas if recent trends in equipment and electricity prices continue. Its report suggested that UK terrestrial waters can feasibly accommodate at least 600 GW of offshore wind in locations at which electricity costs will fall below £60 ($75) a MWh. The group argues for the development of a hydrogen export sector using up to 250 GW of turbines. (For comparison, average UK electricity demand today is about 35 GW). In financial value, this would rival the size of the UK’s offshore oil and gas industry at its peak several decades ago. Most arrestingly, the group asserts that fixed foundation wind will be matched in cost by floating wind at the point at which only 16 GW of floaters have been installed globally. This is a richly detailed and careful analysis of prospective future costs across the whole offshore wind and hydrogen sector. Among many other examples, it provides estimates of hydrogen pipeline costs compared to electricity cables.
6, BP and offshore wind. BP made its first major move into offshore wind, joining with Norwegian oil giant Equinor to exploit two blocks off the eastern coast of the US. The company said the cost was about $1.1bn, or around 20% of its promised yearly investment in renewables and perhaps 6% of this year’s total capital expenditure on existing businesses. The eventual size of the the offshore farms will be about 4.4 GW, and BP's 50% share gives it a large fraction of one year's target of 5 GW of renewables development.
7, Citizens’ assembly. The UK’s climate assembly produced its report. About 100 randomly selected individuals had met over weekends (online and in-person) to listen to experts and reach their own conclusions on how the UK should get to ‘net zero’. As is usually found, the members of the assembly became significantly more alarmed about the climate threat as their understanding grew. Their report stresses ‘fairness’ more than the equivalent French document and proposes using incentives more than employing taxes or prohibitions. An unwillingness to constrain personal consumption, for example by sharply increasing prices, runs through the report. Some of the recommendations were a little unspecific and difficult to translate into precise legislation. I felt that too many proposals could be summarised as ‘we need to invest more in new technology’ or ‘we must have political leadership to get people to change behaviour’ rather than ‘we should tax polluters' or more specific proposals.
8, Low carbon agriculture. A £120m/$155m project funded by UK renewable infrastructure investor Greencoat Capital has resulted in almost 30 hectares of greenhouses built in eastern England. The greenhouses will grow up to 10% of the UK’s tomato crop, along with peppers and cucumbers. Heat pumps will extract heat from a local waste water treatment plant. An onsite combined heat and power plant (CHP) will provide electricity for the heat pump. The exhaust from the CHP generator will be pumped into the greenhouse, raising CO2 levels and increasing the rate of photosynthesis. The greenhouse will grow the vegetables hydroponically, meaning lower requirements for fertiliser and pesticides. The developers indicate that emissions will be only a quarter of conventional tomato agriculture in the UK. In a claim that might be contested by some similar Australian greenhouses, the developer says that the combination of measures in this marvellous venture are a ‘world first’.
9, Three early stage companies. I thought these ideas looked very interesting. Terabase, a US start-up staffed by solar project developers, looks to cut the cost of large scale PV farms by rigorous cost reduction across the scores of different categories of expenditure involved in building multi-megawatt developments. Apparently boring, but vital to get to that 1 cent per kilowatt hour target. MGA in Australia makes heat storage bricks from meltable metal. The heat can be retained for up to a week and is used to convert to steam for electricity generation. The costs of the blocks are claimed to be a fraction of lithium ion, but the round-trip efficiency will never be as high. (Thanks to Gage Williams). Scientists in Ohio found a specific bacterium that makes the gas ethylene, the most important precursor chemical for plastics manufacture. The critical aspect of the discovery is that oxygen is not produced alongside the ethylene, making the bacterium possibly useful for large scale use. (Thanks to Thad Curtz).
10, Progress towards decarbonisation. I wrote an article for ENEL Green Power’s education hub. Using a variety of examples already covered in this newsletter, I made the argument that business is now a more effective promoter of decarbonisation than governments. Governments can assist by active regulation and by subsidy for nascent industries but private companies offer the speediest route to net zero.
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