The great leveler: why CO2 prices are crucial?

CO2 price for decarbonization

Energy policies currently act as kingmakers for a select few transition technologies. But they offer no incentives for other, lower cost and more practical alternatives, which could economically decarbonize the whole world by 2050. Hence this 14-page note presents the top five arguments for a simple, transparent, economy-wide CO2 price for decarbonization and energy transition. We also illustrate who would benefit versus which bubbles may burst.


The need for a level playing field in the energy transition is outlined on pages 2-4. Current policies are overly complex, arbitrary and may even stifle progress.

New technologies would emerge with a CO2 price, as energy transition broadens across every sector. Examples are presented on pages 5-8.

CO2 prices accelerate the pace of progress, as shown on pages 9-11. This matters as past energy transitions took 70-100 years and a faster transition is needed today.

CO2 prices unlock the most economic transition, as the lowest-cost technologies can compete. Pages 12-13 quantify the importance of economics.

CO2 prices can work, as shown on page 13-14. We model that a CO2 price of $40-75/ton can decarbonize the entire United States by 2050, while also unlocking $3.5trn new investment and creating 500,000 new jobs.

The top five arguments for a CO2 price for decarbonization of the world by 2050, and who would benefit versus which bubbles may burst, are highlighted in the article sent out to our distribution list here.

US Shale: the second coming?

Future US shale productivity

Future US shale productivity can still rise at a 5% CAGR to 2025, based on evaluating 300 technical papers from 2020. The latest improvements are discussed in this 12-page note, and may spark more productivity gains than any prior year. Thus unconventionals could grow by 2.6Mbpd per annum from 2022-25 to quench deeply under-supplied oil markets. But hurdles remain. The leading technologies are also becoming concentrated in the hands of fewer operators and an emerging group of oil services.


Our production forecasts for US shale are outlined on pages 2-3. Volumes must double by 2025 to rebalance future oil markets, which hinges on productivity gains.

Our outlook for shale productivity is explained on page 4, including our methodology, which considers the pace of progress in technical papers.

Headline comparisons are presented on pages 5-6, between the technical papers filed around the shale industry in 2018, 2019 and 2020.

The latest improvements are summarized across each category, drawing on the most interesting technical papers and the companies that have filed them. This includes petrophysics (page 7), completion designs (page 8), optimizing completion fluids (page 8), Shale-EOR (page 9) and a step-change in machine learning algorithms (page 10-11).

The leading companies are highlighted on page 12, ranked according to the numbers of technical papers they have filed in each year. Some are stepping up, and gaining an edge, while others are clearly pulling back on shale R&D.

Technology transitions: thinking fast and slow?

Pace of adoption for energy transition technologies

It takes 15-100 years for a major new technology to ramp from 10% to 90% of its peak adoption rate. But what determines technology adoption rates? This 15-page note finds answers by evaluating 20 examples that changed the world from 1870 to 2020. We derive four rules of thumb, in order to quantify the pace at which different energy transition technologies will scale up.


Technology adoption rates matters both for meeting climate goals around the energy transition and for investors trying to forecast future market sizes, as argued on pages 2-3.

But how can we measure adoption rates? Our methodology is explained on pages 4-6, aggregating data on the adoption rates of twenty technologies that changed the world from 1870-2020.

Infrastructure requirements are the greatest determinant of a technology’s ascent, impacting adoption rates by a factor of 2-3x, as outlined on pages 7-8.

Transformational technologies that improve consumers’ lives are also adopted c2x faster than non-transformational ones, all else equal, as quantified on pages 9-10.

Adoption rates stall when economics are challenged, slowing down by as much as 5-7x, as measured on pages 10-12.

Technology adoption rates also appear to be speeding up, occurring 1% per year faster in recent decades compared with the early 20th century, as shown on page 13. This squares with a record pace of global patent filings and the way AI enables technology gains.

What does it mean for energy transition technologies? On pages 14-15, we use our insights to forecast the adoption rates for various energy transition technologies.

A general finding in our braoder energy transition research has been that new technologies take longer to reach maturity than might intuitively be expected (note here) and in our view, markets often over-value new technologies and under-value incumbents (note here).

Backstopping renewables: cold storage beats battery storage?

Phase change materials for backstopping renewables

Phase change materials could be a game-changer for energy storage. They absorb (and release) coldness when they freeze (and melt). They can earn double digit IRRs unlocking c20% efficiency gains in freezers and refrigerators, which make up 9% of US electricity. This is superior to batteries which add costs and incur 8-30% efficiency losses. We review 5,800 patents and identify early-stage companies geared to the theme in our new 14-page note.


Refrigerators and freezers comprise 9% of the US electric grid, of which half is in the commercial sector, across 4,200 warehouses, 40,000 supermarkets and 620,000 restaurants. This report argues that a new class of materials, Phase Change Materials (PCMs), can effectively store excess renewable energy as coldness in these fridges and freezers (aka “demand shifting“), improving their efficiency by c20% and without requiring power prices to increase.

The energy economics of cold storage are explained on pages 2-4, outlining the energy consumption of cold storage facilities as function of different input variables (which will also help you understand how to save energy at your fridge-freezer at home) .

Phase change materials are explained on pages 5-6, explaining what they are, how they work, and how they can lower energy consumption by c20% at a typical fridge/freezer.

The economics are modelled on pages 7-8, showing an 8.5% IRR under recent costs and power prices, rising into double digits with a CO2 price, and above 30% with recent deflation in the costs of PCMs.

A comparison with battery storage is provided on page 9-10, showing a clear preference for PCMs. Batteries decrease efficiency and raise electricity costs. PCMs increase efficiency and do not raise electricity costs. Batteries have further challenges.

Who are the leading companies commercialising PCMs? We answer this question on pages 11-14, by reviewing 5,800 patents. We find promising venture-stage and growth-stage companies in the space, plus listed companies in the capital goods, materials and automotive sectors.

Hydrogen: lost in transportation?

Costs of hydrogen transportation

Transporting hydrogen will be more challenging than for any other commodity ever commercialised in the history of global energy. This 19-page note reviews the costs and complexities of cryogenic trucks, hydrogen pipelines and chemical hydrogen carriers (e.g., ammonia). Midstream costs will be 2-10x higher than comparable gas value chains, while up to 50% of hydrogen’s embedded energy may be lost in transportation.


We have assessed the costs of green hydrogen value chains in our prior research, focusing on power and trucking. The costs are re-capped on pages 2-3. But our calculations assume all hydrogen is generated near its point of sale. This note assesses the additional costs and complexities of hydrogen transport.

Hydrogen is inherently more complex to transport than natural gas, due to immutable physical and chemical differences, which are spelled out on pages 4-5.

Cryogenic trucks are assessed on pages 6-7. Liquefying hydrogen at -253C and the associated boil-off may consume c50% as much energy as is in the delivered hydrogen.

New hydrogen pipelines are assessed on pages 8-12, including a deep-dive into the fluid mechanics. Costs will inherently be 2-10x higher than for natural gas.

Blending hydrogen into pre-existing gas pipelines is assessed on pages 13-14. This option introduces unfathomable complexity for a mere 3-6% CO2 reduction.

Chemical carriers such as ammonia are assessed on pages 15-17. We model the value chain end-to-end, which makes for interesting conclusions on Air Products’s recently sanctioned $7bn hydrogen-ammonia project in Saudi Arabia.

The impact on hydrogen costs is quantified on pages 18-19. We conclude hydrogen transport would increase our power and trucking costs by c10-25%.

Turning the tide: is another offshore cycle brewing?

New Offshore Cycle

Oil markets look primed for a new up-cycle by 2022, which could culminate in Brent surpassing $80/bbl. This is sufficient to unlock 20% IRRs on the next generation of offshore projects, and thus excite another cycle of offshore exploration and development. Beneficiaries include technology leaders among offshore producers, subsea services, plus more operationally levered offshore oil services. The idea is laid out in our 17-page note.


Our oil market outlook is detailed on pages 2-5, seeing 2Mbpd of under-supply by 2022 and a potential inventory draw of 2.5bn bbls.

>$80/bbl oil prices are needed to instigate a new offshore cycle, as modelled and explained on pages 6-9.

Can’t the next oil cycle be quenched purely by ramping up short-cycle shale, instead of another offshore cycle? We answer this pushback on pages 10-11.

Is another offshore cycle compatible with the energy transition and global decarbonization? We answer this pushback on pages 12-13, with detailed data on CO2 emissions per barrel offshore versus elsewhere.

Who benefits? We present the technology leaders among producers, service companies and emerging technologies on pages 14-17, drawing on our prior patent screens and technical research.

Green hydrogen trucks: delivery costs?

green hydrogen value chain to decarbonize trucks

Our 18-page note models the full-cycle economics of a green hydrogen value chain to decarbonize trucks. In Europe, at $6/gallon diesel, hydrogen trucks will be 30% more expensive in the 2020s. They could be cost-competitive by the 2040s. But the numbers are generous and logistical challenges remain. Green hydrogen trucks will most likely find adoption in niche applications, competing with other technologies, rather than as a wholesale shift to a hydrogen economy.


Costs of the green hydrogen value chain are summarized on pages 2-3, re-capping why we are relatively cautious on hydrogen in the power sector (note here).

The opportunity in transportation may be much greater, including a lower hurdle for cost competitiveness, and environmental benefits over diesel trucks. (pages 4-5).

The economics of hydrogen fuel retail stations are outlined on pages 6-7, however, we acknowledge our numbers are optimistic for three key reasons.

Hydrogen trucks are compared against diesel trucks on pages 7-11, quantifying the relative differences in costs, ranges, fuelling speeds, functionalities and maintenance costs.

Full-cycle economics are compared on page 12-14, showing the relative costs of hydrogen, LNG, CNG. LPG and diesel; in Europe, in the US, with varying CO2 prices and in the 2040s.

Niche adoption of hydrogen is possible in some contexts, as outlined on page 15, but we think a full-scale shift to green hydrogen trucks is impractical and unlikely.

Technology leaders are profiled on pages 16-18, after reviewing 18,600 patents. We show which companies are commercializing hydrogen vehicles and fuelling stations, and the considerable complexities they are aiming to overcome.

Green deserts: a final frontier for forest carbon?

afforesting lands by desalinating and distributing seawater

Forests can offset 15bn ton of CO2 per year from 3bn global acres. But is there potential to afforest any of the world’s 11bn acres of arid and semi-arid lands, by desalinating and distributing seawater? Our 18-page note answers this question. While the energy economics do not work in the most extreme deserts (e.g., the Sahara), $60-120/ton CO2 prices may be sufficient in semi-arid climates, while the best economics of all use waste water from oil and gas, such as in the Permian basin.


The opportunity and challenges for nature based solutions to climate change are outlined on pages 2-4, explaining the rationale for afforesting deserts.

Precedents for afforesting deserts, including detailed case studies from the Academic literature, are reviewed on pages 5-8.

Water requirements are quantified, based on data from 60 tree species and the forestry industry, on pages 9-10.

The energy economics of desalinating and piping water are presented on pages 11-12.

The challenges of afforestation in the most extreme desert environments are modelled on page 13, showing why it is almost impossible to grow forests in the Sahara. The CO2 costs of supplying sufficient water could exceed the CO2 absorbed by new trees.

Supplementing rainfall in marginal lands is a more compelling economic model (e.g., adding the equivalent of 100mm new rainfall to marginal lands with c300-400mm), as shown on page 14.

The best case we can find is to use Permian waste water. Costs of desalination could be lower than current costs of disposal, while Permian upstream operations on the reforested acreage could be made carbon neutral, per pages 16-17.

A short list of companies exposed to the theme is presented on page 18.

Green Hydrogen Economy: Holy Roman Empire?

Green hydrogen economics

This 16-page note models the green hydrogen value chain: harnessing renewable energy, electrolysing water, storing the hydrogen, then generating usable power in a fuel cell. Today’s end costs are very high, at 64c/kWh. Even by 2050, our best case scenario is 14c/kWh, which would elevate average household electricity bills by $440-990/year compared with the superior alternative of decarbonizing natural gas.


Voltaire famously slated the Holy Roman Empire for being neither holy, nor Roman, nor an Empire. The same criticism may apply to the Green Hydrogen Economy. Well over 80% of 2050’s hydrogen market is likely to be blue hydrogen. This is ultimately derived from natural gas energy (increasing gas demand). And it is still not economical, costing 39c/kWh today and 11c/kWh in our best case by 2050.

Our baseline costs to decarbonize natural gas power are presented on page 2.

Renewable energy inputs to green hydrogen production are costed on pages 3-4,

Electrolyser costs, and potential future improvements, are covered on pages 5-7.

Distributing and storing hydrogen is surprisingly challenging. We review 5 key reasons and derive base- and best-case cost estimates on pages 8-11.

Generating electricity from green hydrogen is costed on pages 12-13.

What do you have to believe to be constructive on green hydrogen costs, in the best case scenario in the 2040s and 2050s? We answer this question on page 14.

Relative advantages of blue hydrogen are discussed on pages 15-16, although we still think decarbonized natural gas will be a superior option for the energy transition.

Energy storage: batteries versus supercapacitors?

Supercapacitors in transport and industry

Supercapacitors may eclipse lithium ion batteries? This research report outlines the opportunity for supercapacitors in transport and industry. Their energy density is improving. Potential CO2 savings could surpass 1bn tons per year. IRRs of 10-50% can be achieved, even prior to CO2 prices. This 20-page note presents are our conclusions after reviewing 2,000 Western patents, and identifies leading companies exposed to the theme.


What are super-capacitors? The underlying physics of super-capacitors and their energy economics are spelled out from first principles on pages 2-3.

The three technical advantages of super-capacitors over lithium ion batteries are argued on pages 4-8.

Commercial deployments of super-capacitors, including case studies, energy savings, capex costs and economics are presented on pages 9-14.

Efforts are underway to improve energy density by tuning ionic electrolytes to better-controlled graphene pore distributions, as outlined on pages 15-17.

Over 20 companies geared to the theme, including “technology leaders”, are profiled based on reviewing 2,000 patents, on pages 18-20.

Downward revisions to our long-term oil demand forecasts, incorporating the impacts of supercapacitors, are presented on page 20.

This report specifically focuses on the use of supercapacitors in transport and industry. Although more recently, we have been getting excited about supercapacitors as a means of smothing short-term volatility.

Copyright: Thunder Said Energy, 2019-2024.