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Industry news

Things I noticed and thought were interesting

Week ending 24th November 2019
1, Trading of renewables via blockchain. Green Mountain Power, the Vermont utility, partnered with LO3, the operator of the Brooklyn microgrid. In Vermont, individual businesses wanting renewable power will be able to buy directly from local solar panel owners via a blockchain network. The utility will supply hydro or other low carbon electricity when there is no surplus solar. Local residents will probably get improved rates for power exports from their property (although the precise amount will be determined by auctions). Green Mountain Power is pursuing a number of similar initiatives that give local households access to good prices but also allow the utility to control the equipment, such as batteries and EV chargers, on the customers’ premises. I’m sure others will copy this intelligent approach. (Note 4 below says that Sonnen is using a similar tactic in Germany).
2, Sustainable Aviation Fuel. At the moment there is only one significant source of non-fossil aviation fuel in the world, a refinery in California. SkyNRG of the Netherlands will build a new plant in the north of the country to supply Sustainable Aviation Fuel (SAF) by 2022. The raw materials will come from waste vegetable oils and a new green hydrogen refinery to be built near Groningen. (The huge Groningen gas field is being gradually abandoned because of severe earthquakes and hydrogen activity in the Netherlands is focused on this region). Shell said this week that it would participate in the new SAF plant, although it is not clear that cash is changing hands. SkyNRG is partly financing the refinery by pre-selling carbon offsets to companies such as PwC.

3, Hydrogen central heating boilers. Countries that widely use gas central heating systems in homes, of which the UK is a prime example, face an urgent need either to electrify heat or to replace natural gas with hydrogen. The UK’s association of gas and electricity network operators called this week for all new domestic boilers to be able to work on either hydrogen or natural gas. Boilers that can switched between fuels are not yet fully available but UK market leader Worcester Bosch said earlier this year that ‘Despite some inevitable challenges, there can be no doubt that hydrogen has real potential for the future of the UK’s heating sector’ and indicated that the technological problems arising from the invisibility of hydrogen flames and their higher speed are solvable.
4, Household PV, battery, electric car. Sonnen, the Shell-owned battery supplier with large operations in several countries including Australia and the US, announced a new offer for German customers. It will rent a solar system, battery, electricity and electric car to households for a fixed monthly fee that is said to be no higher than the customer’s current bill. The minimum term for the car is just six months, helping to reduce customer anxieties over any risk from acquiring an EV. As with Green Mountain Power (note 1), the finances work for Sonnen because it controls when the battery discharges and charges.
5, Hydrogen demand. Italy’s SNAM, the largest natural gas utility in Europe, wrote that hydrogen could fulfil 23% of Italian energy demand in 2050. Such a figure depends on deep decarbonisation, it said. It also promised substantial increases in biomethane (effectively natural gas from agricultural or waste sources) and the development of 150 natural gas refuelling stations for cars and trucks. It committed to putting 20% of its overall investments in the energy transition in the next four years, including setting up a new business to push the commercialisation of hydrogen. It continues to experiment with increasing the percentage of hydrogen in one of its gas pipelines, raising the percentage to 10% during the next few weeks. (Thanks to Thad Curtz).
6, Solar from Australia for Asia. The US$20m feasibility study for the most ambitious renewables project in the world was funded, partly by two Australian billionaires. A 10GW solar farm in northern Australia, a 22 GWh battery and a 4,500km link to Singapore is envisaged, at an eventual cost of around US$15bn. The solar farm will occupy 150 sq km and construction is planned to start after full fundraising is complete in 2023. One of funders, Mike Cannon-Brookes, was the driving force behind the installation of the huge Tesla battery in South Australia. He made a comment which strikes me as important. He said that employees of his software business were increasingly interested in sustainability, and that his actions and public stance on climate breakdown were helpful in attracting the best people to work for him. In contrast, fossil fuel companies will find it increasingly hard to pull in the best recruits.

7, In-store farming. Some of the larger scale indoor farmers have struggled to expand. For example, Plenty, the venture funded in part by Jeff Bezos, has yet to open a ‘factory farm’, other than its San Francisco base, nearly 30 months after taking in its latest large round of capital. Agricool, which grows indoor strawberries in Paris, seems also to have stalled. But at the other end of the size spectrum, Berlin’s InFarm appears to be expanding rapidly with new sales into supermarkets in the US and Denmark. It already has 500 installations inside food shops, all of which link to a cloud-based platform that remotely controls growing conditions in its indoor farms .

8, Direct Air Capture. Researchers at MIT published details of a new approach to capture of CO2 at any concentration, including the dilute levels in ambient air. The technology works at low pressures and temperatures. The key other advantage of the proposal is the potential to radically reduce energy needs. The MIT team quote a figure of less than 300 kWh per tonne of CO2, which may be less than a tenth of other approaches. (The price of the energy used for direct air capture dominates the overall cost). This approach is some way from commercialisation but seems highly plausible to me.
9, Carbon bubbles. The unexpected fall in orders for gas turbines in 2017 precipitated falls in the share price of GE and Siemens. (GE is now worth about a third of its value in early 2017). Both companies had believed that gas was a complement to renewables and therefore protected from harm as the energy transition proceeded. But turbine sales fell anyway as investors shied away from financing projects that will be undermined by the energy transition. The automotive component industry looks as though it is going to go through a similar collapse. Continental AG, one of the top 3 global suppliers, has long argued that efficient diesel and petrol engines can compete with EVs and that the world cannot afford a rapid switch to electric vehicles. But this week it confirmed the closure of four centres for the design and manufacture of hydraulic components for engines. The background is, of course, the rising sales of EVs but, very much more important, the decline in the global sales of diesel (and petrol) cars, which stems partly from the growing regulatory pressures on internal combustion engines in the EU and elsewhere. As with gas turbines, the auto components industry notes the small market share that the insurgent technology has gained – and thinks it can manage the transition -  but then ignores the downward forces weighing on the old markets arising from the switch.
10, Citizens’ Assemblies. Deliberative meetings are increasing being used to help decide on policies towards climate change. The city of Oxford -  which has a population of about 150,000, only a small fraction of which has a direct connection to the universities - recently conducted a citizens’ assembly over two weekends. About 40 Oxford residents were involved, as well as a wide variety of experts on climate science and on mitigation. Probably the most interesting conclusion of the report was how citizens became more committed to backing strong action on climate as a result of their work. At the end of the process, about 90% wanted net zero to be achieved before the UK’s target of 2050. When offered a variety of choices for diminishing emissions, such as encouraging public transport and cycling, increasing renewable energy or improving the insulation of new homes, very large majorities voted for radical action. But members of the panel also felt that too much responsibility was being placed on individuals whereas corporations and governments were not expected to do enough.
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