Category: Report

We have attempted a detailed breakdown of global energy demand across 50 categories, to identify emerging opportunities in the energy transition, and suggesting upside to our energy demand forecasts? This 12-page note sets out our conclusions and is intended a useful reference.

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Global energy demand is not really a thing. It is a constellation of over fifty major categories underpinning human civilization. 27 of those categories consume more than 1% of global energy.

Hence our goals in this note are to disaggregate global energy demand by end use, in order to derive more accurate demand forecasts, and to identify the biggest opportunities for energy efficiency initiatives.

Our methodology for breaking down global energy demand is to look line by line, through all of the economic models, energy intensity models and supply-demand models we have built over the past five years, as explained on pages 2-3. (Note the distinction between primary and useful energy). All of our models are fully auditable for TSE clients.

The biggest constituents to global useful energy demand are residential heat (15%), steel (7.5%), plastics (6%), cars (5.4%), commercial heat (5%), hydrogen (4.6%), cement (3%), oil refining (3%), agriculture (3%), aviation (2.6%), air conditioning (2.5%), cooking (2.2%), lighting (2.2%) and shipping (1.4%) (page 4).

The first key reason for our breakdown is to improve our forecasts for global energy consumption. The trajectory is one of the most active debates in the energy transition, as summarized on pages 5-6.

If we look line-by-line through the categories in our breakdown, we would adamantly argue global energy demand will rise by at least 50% in useful terms by 2050, and by 20% in primary terms by 2050 (page 8).

The second key reason for our granular breakdown is to identify the biggest opportunities for energy savings and decarbonization. The biggest categories might seem to offer the biggest savings (page 7). But the most interesting opportunities to us are in the materials sector (page 9) and in recovering waste heat (page 10).

A third observation is that the energy transition is itself likely to stoke demand. Producing over 430GW pa of solar modules now consumes around 1.4% of all useful global energy. Similar numbers are explored for wind, electric vehicles, CCS, hydrogen and energy storage, together with conclusions on pages 11-12.

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Momentum behind enhanced geothermal has accelerated 3x in the past half-decade, especially in energy-short Europe, and as pilot projects have de-risked novel well designs. This 18-page report re-evaluates the energy economics of geothermal from first principles. Is there a path to cost-competitive, zero-carbon baseload heat?

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Geothermal power is produced from 200 geothermal fields globally, feeding 16GW of power capacity, generating around 110 TWH of useful electricity, which equates to 0.4% of the world’s electricity and 0.15% of its total useful energy. But this is confined to geological hotspots. Broader geothermal resources are 5x total global energy demand, the key challenge is simply accessing them (page 2).

In 2020, we wrote excitedly about the potential to begin accessing deep geothermal energy, using improved drilling and completion technologies that were originally developed by the amazingly innovative US shale industry.  But the world has changed, in ways that amplify demand for geothermal, especially in European gas markets (pages 3-4).

Hence momentum has accelerated. Early enhanced geothermal projects were disappointing. More recent projects have been 3x more prevalent. And recent demonstration projects have categorically de-risked prior issues. Ten projects in particular, are reviewed on pages 5-7.

The other major change from 2020 to 2024 is not just the world. It is us. We have spent the past four years trying to deepen our knowledge of the energy from first principles. There is a definitive pathway to cost-competitive deep geothermal, hinging on the enthalpy of hot fluids (page 8), avoiding the energy costs of pumps (page 9) via thermosiphons (page 10), prioritizing heat rather than Rankine cycle power (pages 11-12), and reducing drilling and completion costs (page 13).

Sensitivities for the costs of deep geothermal electricity and deep geothermal heat are discussed on pages 14-15.

Eavor Technologies is a private company founded in 2017, headquartered in Calgary, Alberta, employing c100 people. It is the enhanced geothermal company that has made the most interesting progress over the past 3-4 years, including large ongoing projects in Europe. Hence we have reviewed Eavor’s patents, drawing conclusions on pages 16-18.

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Oil markets endure 4 major volatility events per year, with a magnitude of +/- 320kbpd, on average. Their net impact detracts -100kbpd per year. OPEC and shale have historically buffered out oil market volatility, so annual oil output is 70% less volatile than renewables’ output. This 10-page note explores the numbers and the changes that lie ahead?

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Our outlook for 2024 is that global energy markets should balance, but this base case will likely be overwhelmed by unexpected volatility (page 2).

An era of rising volatility is starting to grip global energy markets more broadly, due to mega-trends in the energy transition itself (page 3).

But haven’t oil markets always been volatile? And how volatile? To answer these questions, we have aggregated oil production by country by month. Then we have reviewed the data line-by-line, excluded conscious decisions to raise/lower production in response to prices (e.g., during COVID-2019), and tabulated 80 events where individual countries’ output varied by +/- 100kbpd YoY, on a trailing twelve month basis. Our methodology is explained on pages 4-5.

Upside volatility versus downside volatility? The statistical distribution of oil market volatility is quantified on pages 6-7. Disruptions can occur, but they can also reverse.

Oil market volatility versus oil market surprises? Large new field start-ups do create statistical volatility in individual countries’ oil output. But not in a way that is entirely unexpected. The prevalence of oil market surprises is quantified on page 8.

Counteracting volatility? Core members of OPEC and US shale have very clearly acted to counteract oil market volatility over the past 15-20 years. On pages 9-10, we wonder whether this buffering role will continue in the future, especially as US shale growth slows?

Ultimately, volatility benefits those with flexibility: from upstream producers, to midstream companies, to flexible energy consumers.

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Batteries, electrolysers and cleaner metals/materials value chains all hinge on electrochemistry. Hence this 19-page overview of electrochemistry explains the energy economics from first principles. The physics are constructive for lithium and next-gen electrowinning, but perhaps challenge green hydrogen aspirations?

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In 1800, Alessandro Volta (1745-1827) created one of the first electrochemical cells in the world. The anode was zinc metal, bathed in an electrolyte of sulfuric acid (H2SO4, or strictly 2H⁺ and SO4^2-). An outpouring of electrons, or in other words a direct current, could be produced when the zinc metal oxidized to form zinc ions in solution (Zn -> Zn²⁺ + 2e^–).

The physics of electrochemistry underpin so many different technologies that matter to the energy transition, if the world is to reach net zero, 250-years after Volta’s invention! This includes all batteries, electric vehicles, electrolysers, fuel cells, electrowinning plants.

In our travels through the energy transition, we have found it invaluable to stop guessing and go back to first principles. The goal of this 19-page note is to improve our collective understanding of electrochemistry.

An overview of electrochemistry is given in the first third of the note: the history, the units, calculating current flow from Faraday’s laws and calculating voltage from Standard Potentials and the Nernst Equation. This all shows that putting some new redox pair into an electrochemical cell is really no more revolutionary than putting pineapple onto a pizza.

Thermodynamic efficiency is covered in the second third of the note: the limitations of redox reactions with wide entropy changes, overvoltage linked to reaction kinetics, Coulombic losses due to side reactions and leakage currents, and why efficiency itself is a ‘moving target’.

Implications for decision-makers in the energy transition are summarized in the final third of the note. Can any other redox reactants ever be better than lithium? (Or just cheaper?). Can green hydrogen meet its cost and efficiency targets? Is the production of clean materials via electrowinning a better use for renewable electricity?

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This 14-page note predicts a staggering increase in global energy market volatility, which doubles by 2050, while extreme events that sway energy balances by +/- 2% will become 250x more frequent. A key reason is that the annual output from wind, solar and hydro all vary by +/- 3-5% each year, while wind and solar will ramp from 5.5% to 30% of all global energy. Rising volatility can be a kingmaker for midstream companies and others?

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Renewable resources have the advantage of harnessing energy that was there all along, in the form of hydro, wind and solar. Water was already flowing. The wind was already blowing. The sun was already shining.

Renewables do however have the disadvantage of volatile timing. It is not possible to control when it rains, when the sun shines, or when the wind blows. Hence what implications for global energy market volatility, as wind and solar ramp to 30% of useful global energy by 2050?

The volatility of renewables generation is quantified asset-by-asset, country-by-country and globally in this report (database here). Detailed numbers are given for the annual volatility of hydro (page 3), volatility of wind (page 4) and volatility of solar (page 5).

The volatility of today’s incumbent energy sources is 70% lower than for new energies, across global oil production and global gas production, and even this is more a case of voluntarity than volatility (page 6).

Energy demand is also volatile, varying with weather, which impacts variables such as heating degree days, as quantified on page 7.

Random variable statistics can thus be used to predict how mere weather will affect global energy balances, looking out into the future, with differing shares of renewables, on a global basis (pages 9-10), in individual nations (page 11) and for individual asset-owners that may wish to disconnect from the grid and self-generate (page 12).

The numbers are staggering. They risk turning energy analysts into weather forecasters, and have profound implications for national security.

Could midstream companies be the primary beneficiary of rising volatility in the global energy system? Especially in the US, we see natural gas buffering the volatility, and have screened gas transmission and storage infrastructure (pages 13-14).

A strange feature of short-term energy commentary is that spot prices are always over-extrapolated. High prices ‘confirm’ a persistent era of energy shortages. While low prices ‘confirm’ the imminent demise of all hydrocarbons!! Hence we must also brace for the possibility that market multiples will become more volatile on mere weather.

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The $1bn pa harmonic filter market likely expands by 10x in the energy transition, as almost all new energies and digital technologies inject harmonic distortion to the grid. This 17-page note argues for premiumization in power electronics, in harmonic filters, including around solar, and screens for who benefits?

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The perfect AC power waveform is sinusoidal. Current and voltage both rise and fall in a smooth wave. These current and voltage waveforms are perfectly in phase. Conversely, harmonic distortion occurs when AC waveforms are non-sinusoidal, or otherwise jagged, causing resistive losses, excess heat generation and equipment degradation. These issues are explained on pages 2-4.

Case studies of harmonic distortion, and their negative consequences, are described on page 5.

Harmonics are becoming more prevalent. Harmonics were mostly absent from grids until the 1960s, when computer systems and other digital devices came of age. But almost all forms of new energies are non-linear, injecting distortion to power grids.

Harmonic distortion caused by DC devices are discussed on pages 7-8, including the signatures of electric vehicle chargers, grid-scale batteries, variable frequency drives such as in heat pumps, LEDs, and energy consumed by internet and big data devices.

Harmonic distortion caused by inverters are discussed on pages 9-10, including for solar inverters and wind converters. Harmonic distortion from solar is particularly interesting and controversial, as discussed on page 11.

Active harmonic filters are the most effective antidote to harmonics. Their workings and costs are discussed on pages 12-13, including implications for the ultimate share of renewables in power grids.

The harmonic filter market likely rises by 10x as part of the energy transition, hence we have compiled a screen of harmonic filter companies. A large, European capital goods company stood out. Consolidation is also underway. Leading companies are summarized on pages 14-17.

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Navigating the energy transition in 2024 requires focusing in upon bright spots, because global energy priorities are shifting. Emerging nations are ramping coal to avoid energy shortages. Geopolitical tensions are escalating. So where are the bright spots? This 14-page note makes 10 predictions for 2024.

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Global coal use hit new highs of 8.5GTpa in 2023, 1GTpa higher than was foreseen 2-5 years ago, as China and India are prioritizing energy security above decarbonization. Implications for energy transition sentiment are discussed on pages 2-3, and we have reconsidered our global energy supply-demand balances on pages 4-6.

Geopolitical tensions are now re-shaping the energy transition in 2024. The tensions and their consequences are described on pages 7-9.

Our outlook for shale is updated on page 10. Our outlook for solar is on page 11. The #1 materials bottleneck for 2024 is on page 12. Our #1 theme for energy transition decision-makers is on page 13. And a snapshot of heavily-discussed companies follows on page 14.

Our new year’s resolutions, as articulated in the video here, are to publish more regular overviews of key conclusions, not to shy away from predictions even when they are not exactly what we want to happen, and to help our clients get information to ‘build cool stuff’ that resolves tensions discussed above, and drive the energy transition in 2024.

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150 core companies have been mentioned 700 times across all of our research since 2019; within a broader list of 1,300 total companies exposed to energy transition, diversified by geography, by size and by segment. This 12-page note draws conclusions about the most mentioned companies in our energy transition research.

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We have started building a new database covering 1,300 companies exposed to energy transition, that have been mentioned 2,000 times, across all of TSE’s research, going back to 2019. It is a resource where decision-makers can quickly navigate to all of TSE’s thematic energy transition research that has directly mentioned a particular company. The methodology for constructing the database is explained on pages 2-4.

It is interesting to look at the sizes, geographies and sectoral focuses of the companies coming up in our research, and whether they are private, public large-caps, mid-caps or small-caps. The wide distribution shows that we are not trying to cover any particular geography or company type. If we write about a specific theme, we simply highlight the most relevant companies, whoever they happen to be. See pages 5-6.

It is even more interesting to index how many times different companies are directly discussed in our research. This may be because they are exposed to verticals that are seeing major changes in their terms of trade, as part of the energy transition, or verticals that we find particularly exciting for debottlenecking the energy transition. See pages 7-8.

Across our 2023 research, 50 companies have been discussed particularly often — across clean-tech, materials, capital goods, energy, mining, semiconductors and conglomerates. The note ends by highlighting the top 10 most discussed companies in our research from 2023, plus 5-25 line summaries of the findings in our underlying research. See pages 9-13.

Please note, this report is a summary of all of the work we have ever done historically at TSE, across 1,250 notes, data-files and models. Hence it is only available to TSE subscription clients. If you are not a TSE subscription client and you purchase this report, then we will set you up with a 1-year TSE written subscription.

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What is the most likely route to net zero by 2050, decarbonizing a planet of 9.5bn people, 50% higher energy demand, and abating 80GTpa of potential CO2? Net zero is achievable. But only with pragmatism. This 20-page report summarizes the best opportunities, resultant energy mix, bottlenecks for 30 commodities, and changes to our views in 2023.

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Thunder Said Energy’s research aims to help decision-makers find exciting opportunities to drive the energy transition; by mapping out hundreds of different technologies, which can satisfy the energy needs of the world – realistically, practically, cost-effectively – while taking out all of the net CO2 emissions.

This 20-page note is our best attempt to predict what will actually happen, if the world manages to reach net zero by 2050, while also achieving other important goals, providing better energy for 9.5 bn people, and ensuring relative geopolitical stability and security. It draws on 1,250 publications over the past five years, in our energy transition research.

Our baseline is that global CO2e emissions currently stand above 50GTpa, which would rise to 80GTpa by 2050 without climate action, and which gets reduced to net zero in our roadmap (explained on pages 2-3).

Our Roadmap to Net Zero chooses the best combination of options from our global database of over 100 decarbonization themes (cost curve below). The six main decarbonization drivers, and their contributions are explained on pages 5-6.

Five themes dictate which options are selected in our roadmap to net zero, and where we see the biggest opportunities: CO2 abatement costs (pages 6-7), technical readiness (page 8), resiliency (pages 9-10), resource bottlenecks (pages 11-12) and capital investment (page 13).

Full granularity on the route to net zero by 2050 is given on pages 14-20, including our 5-10 line outlook on each major theme that features in our roadmap. The underlying database is available for stress-testing.

Predictions and opportunities. The report is not an Academic or ideological document, but contains our predictions for what will actually happen: to the world’s energy mix, which markets will see the greatest upside, which commodities will see the biggest bottlenecks, and which themes should be watched most closely in 2024.

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