Things I noticed and thought were interesting
Week ending 18th October 2020
1, Loan terms linked to environmental performance. A small number of companies have borrowed on terms that vary depending on climate change targets. Tesco, the largest British grocery retailer, joined the list with a £2.5/$3.2 bn loan for which the interest rate falls if the company meets emissions, renewable energy and food waste objectives. The actual amount of the reduction was not specified - and I assume it is a small fraction of 1% per year - but Tesco chose to emphasise the environmental aspect of the deal when publicising the new loan. Also notable was the increasingly common statement from large business that it has responsibility to shift its entire supply chains towards low carbon alternatives, not just its own operations. As a large retailer, we can play a key role in decarbonising the wider economy through engaging our suppliers and customers in the transition’ said the CFO.
2, Ohio power plant hydrogen. A gas power station under construction in Ohio will be able to burn up to 20% hydrogen when it opens next year. GE promises that the turbines will be able to run on 100% H2 within a decade. Initially, the hydrogen will be sourced from local industrial producers but the site sits over salt formations that can be used for storage and I suppose that the plan is eventually to use renewables to make hydrogen that can later be burnt in periods of low supply. GE says that this will be the first purpose built hydrogen-burning plant in the US.
3, Solar thermal. Concentrating solar power (CSP) seems to be losing the race against photovoltaics but a serial entrepreneur unveiled a new approach that may make it cost competitive. Instead of huge mirrors he promises reflectors no larger than solar panels that will be simply dropped on the ground and then adjusted automatically to follow the sun and reflect onto a central tower. The claim is that this approach will produce the very high temperatures necessary for some industries for no more than 1 US cent per kilowatt hour, a cost that beats the heat from burning natural gas in most parts of the world. It is certainly true that simply increasing the scale of CSP plants has not resulted in major cost reductions and this new approach is well worth trying.
4, In-store clothes recycling. Aware that fashion is possibly the most unsustainable industry on the planet, with just 1% of clothing recycled after use, the large retailers have begun the long move towards circularity. H&M, the Swedish ‘fast fashion’ chain introduced an extraordinary machine into one of its Stockholm stores this month. Old clothes are fed into it, shredded into very tiny pieces and then made into new items of clothing after the addition of a small amount of virgin fabric. H&M made no promises to roll out the machine to other stores but this is potentially a real contribution to the drive towards circularity. There’s very useful material on Twitter on how the process works. H&M promises to licence the technology to other retailers.
5, World’s largest (or 2nd largest) PV plant. Global solar PV capacity reached 2.2 GW in 2002. A single solar farm of that size was initiated in western China this week, transmitting its electricity over a long distance at ultra-high voltage to the more populous east. The farm took just four months to construct, at a cost of approximately $2.2bn. But the transmission line more than doubled this figure, although it will also accept power from other sources. 200 MW/MWh of storage accompanied the solar farm, making it the second largest battery in the world. A hugely impressive achievement but China will probably have to build a thousand sites like this to get to its new net zero target by 2060.
6, PV mixed with agriculture (‘Agro-photovoltaics’). Pioneers suggest that in sunny countries solar panels placed high above horticultural crops can both generate electricity and actually improve food yields by reducing heat stress. A different way of merging agriculture and PV emerged last week in a new German solar installation (text in German). In this case, solar panels that can collect light on both sides (‘bifacial’) are put on vertical fences that run north south across grain or seed fields. The rows of panels are 8 metres apart, allowing full sized agricultural machinery to move between them. Being in north/south rows, the panels themselves face east/west, meaning that maximum yields are attained in the morning and late afternoon. Typically, the value of this electricity will be greater than output which peaks at midday. From the data provided from the 4 MW Bavarian installation I calculate that the yield per megawatt is probably about as good as a conventional solar farm. The amount of electricity per hectare is only about half as much but the value of the grain grown may more than compensate for this. (In energy terms, growing crops cannot compete with solar PV – a hectare of maize will typically provide about 18 MWh of energy value compared with 700 MWh for PV, says the German energy researcher Fraunhofer).
7, Hydrogen at a nuclear plant. Nuclear power stations are poor companions for variable renewables. Ramping electricity output up and down is costly. Several nuclear generators in the US are examining how to keep plants running at 100% output and using surplus electricity to make hydrogen at times of high renewables output. One operator won a US grant to start a pilot project that will use high temperature steam to improve the efficiency of electrolysis. The company aims to use the hydrogen to serve local industrial needs in Minnesota.
8, Alternative fuels for shipping. The intensity of the debate within the shipping industry on the routes to decarbonisation has sharply increased in recent weeks. The alternatives include natural gas or pure methane from biological sources, synthetic methanol, ammonia and hydrogen. Each has very different consequences for ship design, port infrastructure and global supply chains. Shipowners can be forgiven for waiting to make expensive investment decisions until a clear winner can be identified. A recent survey provided a helpful summary of opinion within the industry. Natural gas was the preferred route with hydrogen a close second. Methanol and ammonia were very much less favoured. I don’t whether the respondents were fully representative of the industry but this result provides indication of how opinion is evolving.
9, IEA hydrogen volumes. The International Energy Agency attracted attention this week for finally saying that renewables are clearly the lowest cost source of electricity. About three years too late, I would comment. The IEA also provided some estimates on the amount of hydrogen it expects will be produced in future decades. In its ‘Stated Policies’ scenario for 2040, which projects existing government measures into the future, green hydrogen production is only about 3 million tonnes in 2040. But the EU hydrogen strategy alone looks for 10 million tonnes ten years earlier, all produced inside the EU area. As with its slow recognition of the underlying economics of solar power, I suspect the IEA is simply not keeping track of the speed of change around the world in the hydrogen economy. Even is 'Sustainable Development' scenario projected only as much green hydrogen in 2040 as is already produced using natural gas today.
10, How much electricity from covering a truck with solar panels? I see this question more often than any other single query: would the electricity produced by solar panels covering a vehicle contribute a significant amount of its energy needs? Truck producer Scania gave us a partial answer last week. PV panels covering almost the entire surface of a 18 metre long trailer will produce about 5-10% of the vehicles energy needs in Sweden and perhaps twice this percentage in sunnier southern Europe. Scania projects electricity production of 200 kWh per square metre in Spain. What does this mean for a typical passenger EV, which uses about 3,000 kWh a year? My guess is that a medium-sized car could conceivably carry about 5 square metres of panels, generating perhaps one third of the car’s total needs in southern Europe. Probably better to make the electricity in a large field at a fraction of the cost, I would guess, although self-generation is a possible answer to range anxiety.