Category: Report

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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The costs of decarbonizing by ramping up solar and wind depend heavily on the context. But our best estimate is that solar and wind can reach 40% of the global grid for a $60/ton average CO2 abatement cost. This is a relatively low cost. Yet it still raises retail electricity prices from 10c/kWh to 12c/kWh. This 7-page note explores numbers and implications in the decarbonization costs of wind and solar.

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The costs of wind and solar are commonly expressed in c/kWh or $/MWH terms, including in our own models of onshore wind economics, offshore wind economics and solar project economics. But what are the decarbonization costs, i.e., the costs per ton of CO2 avoided?

The answer depends on context. Obviating the need to construct a new coal-fired power plant (negative CO2 abatement cost) yields a very different answer from causing a fully depreciated nuclear plant to shut down prematurely (infinite CO2 abatement cost!).

However this report contains our best estimates for the decarbonization costs of wind and solar, across the global average grid, in order to inform our roadmap to net zero. After five years looking at this question, there is really only one way to model it correctly, which requires looking at total system costs.

Specifically, it is necessary to calculate how the total cost of the grid increases/decreases (in c/kWh terms) and then divide this by how the total CO2 intensity of the grid decreases (in kg/kWh), then finally, re-arrange the units. Our own assumptions are below.

Many interesting mix effects are explained in the note, as renewables gain share, such as falling grid utilization, rising curtailment rates and the concomitant rise in total grid costs.

CO2 abatement costs can be negative for ramping the best 10% of renewables in the global power grid, average $60/ton of CO2 avoided as renewables grow from 10% to 40% of the grid, then inflect sharply higher. There are two main reasons for the inflection.

The conclusions reward solar/wind developers who pick the best locations/contexts. For those looking to stress-test their own scenarios, the underlying model is here. But our own base case assumptions and observations are explained in the PDF report.

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Wind and solar peak at 50-55% of power grids, without demand-shifting or storage, before their economics become overwhelmed by curtailment rates and backup costs. More in wind-heavy grids. Less in solar heavy grids. This 12-page note draws conclusions from the statistical distribution of renewables’ generation across 100,000 x 5-minute grid intervals.

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Wind and solar are growing. Solar was 5% of all global electricity in 2022, and as much as 15% in leading countries; while wind was 7% of all electricity, and as much as 35% in leading countries (page 2).

Wind and solar peak? Intermittent renewables cannot ramp forever, because their generation is correlated across large areas. Eventually, grids get saturated, and further installations get curtailed (page 3).

As the basis of this analysis, we have compiled the statistical distribution of renewables’ generation across 100,000 x 5-minute grid intervals across California in 2022. Our methodology, and the reasons we like it, are summarized on pages 4-5.

When would solar peak in a solar-heavy grid, on a standalone basis? Our best estimate is at a c35-40% share, for the reasons on pages 6-7.

When would wind peak, in a wind-heavy grid, on a standalone basis? Our best estimate is at a 50-70% share, for the reasons on page 8.

When will wind and solar peak, in a renewables-heavy grid, on a combined basis? Our best estimate is 50-55%, for the reasons on page 9.

Higher or lower? Admittedly, our methodology makes some important simplifications, and further nuances are discussed on pages 10-12.

Ultimately, including demand shifting and thermal storage, we predict that wind and solar will peak at 50-70% of future renewable-heavy grids. The leading backstop, for the other 30-50%, in our view, will be natural gas, followed by nuclear and hydro.

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This 15-page note evaluates 10 commodity disruptions since the Stone Age. Peak demand for commodities is just possible, in total tonnage terms, as part of the energy transition. But it is historically unprecedented. And our plateau in tonnage terms is a doubling in value terms, a kingmaker for gas, plastics and materials. 30 major commodities are reviewed.

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Confessions of a technology analyst. Over the past five years, we have been guilty of blurring the normative and the predictive. What we would like to happen from a moral, ideological and environmental perspective, is not necessarily what will happen.

This 15-page report is about evaluating past evidence of commodity disruptions, and making sober predictions. Examples of peak demand in abundant global commodities are surprisingly hard to find.

The Iron Age officially ended in AD43 when the Romans brought new technology to Britannia, yet global iron/steel demand remains at an all-time high of 2GTpa and rises another 80% by 2050.

The Bronze Age ended in 1,000 BC, yet global demand for copper and tin are still making new highs, and likely double again by 2050.

The Stone Age ended in 3,000 BC, yet stony concrete and coal, remain the #1 and #2 materials in the world, at >30GTpa and 8GTpa.

Where commodities have peaked it is often for good reason. Smelly and barbaric whale oil was 20x more expensive than rock oil. Asbestos is carcinogenic, yet has only seen demand fall by 75% in the past 50-years.

Statistics like these, elaborated on pages 2-9 of the report, make it seem unlikely that three of the largest commodity markets in the world by tonnage – coal, oil and gas – will all fall by over 80% within just 25-years.

The stickiness of commodity demand is explained on pages 10-12, including the most striking facts on global energy inequality, rebound effects and the need for substitutes (coal only collapses if gas doubles).

Our predictions for energy commodities – total global energy, solar+wind, oil, gas and coal – are updated on pages 13-14.

Our ranked outlook for thirty of the most important material commodities in the energy transition are summarized on page 15, and the full database is available for TSE clients.

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Thermal energy storage will outcompete other batteries and hydrogen for avoiding renewable curtailments and integrating more solar? Overlooked advantages are discussed in this 21-page report, plus a fast-evolving company landscape. What implications for solar, gas, lithium batteries and industrial incumbents?

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Solar is the new energy source that excites us most, generating electricity from semiconductors, capable of another 50-100% efficiency gains in the next decade (here and here), deflating levelized costs (LCOPE basis) from 6-8 c/kWh today to 4 c/kWh in the global average utility-scale location. But ramping solar requires energy storage. To set some baselines, costs of different backups are re-capped on pages 2-3.

Half way between demand shifting and battery storage is storing up excess renewable energy, converting it to heat, then heating up a thermal storage medium in some kind of well-insulated tank. The heat can be re-released later. Either directly, or via heat exchangers. For example, to make steam. One use for steam is to make electricity.

Thermal energy storage has surprisingly high energy efficiency, even at longer storage durations and across different storage media (pages 4-8).

Thermal storage has high charging capacity, more than electrochemical cells, which has overlooked benefits in power grids (pages 9-10).

Re-releasing energy is where the devil is in the details. Some challenges, and a ‘merit order’ of different heat uses, are on pages 11-13.

The costs of thermal energy storage will likely be at least 35% below lithium ion batteries, but competitiveness versus natural gas depends on the context, as is built up from first principles on pages 14-17.

Implications for European gas markets are on page 18. And for industrial incumbents in heat exchangers and insulation materials.

A fast-evolving landscape of thermal storage companies shows a wide variety of solutions are now being explored (pages 19-21).

Overall, thermal energy storage is likely to outcompete other battery types, which matters for integrating renewables and energy markets.

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