Industry news
Things I noticed and thought were interesting
Week ending 13th December 2020
1, Green ammonia. Two new project plans this week. Danish chemical engineering company Haldor Topsøe and Vestas, the wind turbine company, said that they would build a pilot plant in Western Jutland by 2022. (They claimed it would be the first in the world but Iberdrola's plans are actually more advanced). 12 MW of wind capacity and 20 MW of solar will power an experimental plant producing ammonia from hydrogen. The quantities are small - only 5,000 tonnes a year – but the partnership says it sees this pilot as the basis for developing much larger plants. The current cost of green ammonia was described as ‘significantly higher’ than manufacture from fossil fuels. Yara has a much larger outline plan for switching one of its Norwegian operations to using hydrogen from electrolysis. This plant produces about 500,000 tonnes of ammonia a year (about 0.3% of world output). Yara comments that the cost of green ammonia is ‘2-4x higher’ than the conventional product and asks for public subsidy before proceeding. Its presentation also indicates that it sees ammonia as the logical fuel for long distance shipping, a view shared by some, but far from all, shipowners. Yara also joined six other large multinationals in an ambitious partnership striving to drive the cost of hydrogen down to $2/kg, the level at which many conclude that green hydrogen will match the cost of the existing product. (Thanks to Greg Yakolev).
2, Airline emissions. United Airlines said it would invest in the Direct Air Capture (DAC) plant being planned by Occidental Petroleum (Oxy). It views large scale expansion of DAC as the best route to carbon neutrality by 2050, a promise it also made this week. United is the first major airline to commit to net zero. The Oxy plant, which will begin construction in 2022 using the Carbon Engineering technology, will capture about 1 million tonnes of CO2 a year, a small fraction of United’s 40 million tonnes of emissions. Nevertheless this is an important step forward. The United Airlines CEO was scathing about alternatives to DAC, commenting that traditional offsets, such as tree planting, ‘do almost nothing to tackle the emissions from flying’.
3, California demand management. One of the Californian demand management companies raised another $80m to increase the size of its customer base. OhmConnect aims to equip almost a million homes with the smart devices necessary to cut electricity use in response to grid crises, such as the recent late summer heatwave in the western US. Demand reduction of this type enables OhmConnect to operate as a ‘virtual power plant’. Home customers receive some of OhmConnect’s revenue earned from cutting electricity use. The company claims its virtual power plant will eventually provide 550MW of demand management, making it the biggest in the world. But California’s peak electricity use runs at 100 times this level, meaning that many demand response programmes of this type are likely to be needed.
4, E-methane. A consortium in Belgium has applied for funds to build the world’s largest factory to make methane using carbon capture. A 75MW electrolyser will take renewable electricity to generate hydrogen which will be combined with the CO2 arising from cement production. The plant will use the technology pioneered by the German company Electrochaea, which uses microscopic living organisms to produce the methane. Although the methane will return CO2 to the atmosphere when burnt, the use of e-methane will reduce emissions by replacing an equivalent amount of fossil gas. As with the green ammonia plants in note 1, the immediate economics of this plant are not obviously favourable. At today’s high EU carbon prices, the annual value of the avoided CO2 emissions is less than €3m but the investment cost of the plant will be around fifty times this level. Public money is being requested in order to complete the plant by 2025.
5, Low carbon steel. Nippon Steel, Japan’s largest steelmaker, made a new promise of carbon neutrality by 2050. It is responsible for almost 10% of the country's emissions. The Japanese steel industry had previously suggested 2100 for net zero. Nippon Steel also committed to move to direct reduction of iron ore using hydrogen. Germany’s Thyssen Krupp backed a partnership investigating the building of an electrolysis plant in North Rhine Westphalia that will supply hydrogen as a partial coal replacement for a blast furnace. In the longer run Thyssen Krupp will also move to direct reduction of ore. As the CTO commented, ‘our climate transformation is based on the use of hydrogen’. Thyssen Krupp claims the plan would be the largest in the world steelmaking industry.
6, Vertical farming. Interest in developing large and highly automated vertical farms continues to grow, partly as a result of widening concerns about security of supply in times of epidemics (or Brexit). One huge salad factory under construction in Denmark provided some arresting numbers to demonstrate how easily some crops can be grown locally. The vertical farm near Copenhagen will produce 1,000 tonnes a year of salads and herbs, or about 5% of national consumption. The developer claims that total Danish needs could be produced on an area the size of no more than twenty soccer fields, replacing the 70% of salads that are currently imported. The water required will weigh little more than the weight of the end products – compare that to the millions of litres needed for field grown salads. Energy is all provided by Danish wind power. I haven’t worked out the numbers but I suspect that although vertical farms require large amounts of electricity for lighting, overall energy needs may be lower than in-field production because hydroponic farming needs far less fertiliser, thus saving on the huge energy requirements for ammonia production.
7, Asking to be taxed. My weekly research for this newsletter now often finds an industry pleading for a high carbon tax to be applied to their sector. This week it was the turn of the Norwegian shipping industry to ask for a levy on fossil fuels. Their Danish equivalent quickly followed. (Between them, shipowners in these countries probably control about 10% of global tonnage). But a Norwegian professor then commented that a carbon tax that immediately incentivised a move away from fossil fuels would need to roughly double the price of fuel oil. The laggards at the International Maritime Organisation will probably use this another excuse for their lamentable lack of interest in decarbonisation.
8, Electric trucks. Another large fleet owner committed to a bulk purchase of large electric trucks. The French refrigerated truck rental company Petit Forestier, which has almost 60,000 vehicles, said it would acquire 1,000 16 tonne vehicles from Volta, the Swedish/UK manufacturer. Aimed at urban deliveries, the Volta Zero has a range of about 150km.This is the largest order Volta has received and prototypes will be delivered in 2021.
9, Solar-powered electric car. The first electric car that may never need charging will go into production next year. The highly aerodynamic three wheeled Aptera from California claims to be able to drive fifteen kilometres on a single kilowatt hour of charge, about three times as good as a typical EV. In a sunny location, the car will pick up over 4 kWh of electricity a day, enough to drive much further than the average daily commute. It is small, far from cheap and looks a little strange, but the first production models were all pre-ordered on the day of release.
10, Planetary boundaries. In a fascinating lecture, the chair of the Energy Transitions Commission Adair Turner argued that neither ‘techno-optimism’ nor ‘anti-consumerism’ were invariably the right response to the climate crisis. Neither Elon Musk nor Greta Thunberg are completely correct. Yes, the world has almost unlimited supplies of zero carbon energy, so there is no ultimate constraint on any human consumption of services requiring just energy (such as transport). But, for example, land use constraints do inevitably mean that food production patterns need to change away from meat. He points out that on questions governed by physics and inorganic chemistry, we have effectively no planetary boundaries. Electrons, ions and photons are there for us to use. However, the same is not true where biology and organic chemistry are concerned, meaning that in many other cases we have to work within tight constraints. |
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