TSE Patent Assessments: a summary?

new technologies for the energy transition

New technologies for the energy transition range across renewables, next-gen nuclear (fission and fusion), next-gen materials, EV charging, battery designs, CCS technologies,  electronics, recycling, vehicles, hydrogen technologies and advanced bio-fuels. But which companies and technologies can we de-risk?

One way to appraise new technologies for the energy transition is to lock yourself in a room with a stack of patents from publicly available patent databases, read the patents, and then score them all on an apples-to-apples framework.

Our technology assessment framework is derived from 15-years experience evaluating energy technologies, from the best of the best world-changing technologies, to companies that ultimately turned out to have over-promised. The framework includes five areas:

(1) Specific problems. We find it easier to de-risk patents that pinpoint specific problems that have hampered others, and set about to solve these problems.

(2) Specific solutions. We find it easier to de-risk patents that pose specific solutions, whereas it is harder to de-risk technologies that are more vague.

(3) Intelligibility. We find it easier to de-risk patents that explain why their inventions work, often including empirical data and underlying scientific theory.

(4) Focused. We find it easier to de-risk patents that all point towards commercializing a common invention, and different aspects of that invention. Conversely, patenting 10 totally different solutions might suggest that a company has not yet honed in upon a final product.

(5) Manufacturing details. We find it easier to de-risk patents that explain how they plan to manufacture the inventions in question. Sometimes, very specific details can be given here. Otherwise, it may suggest the invention is still at the ‘science stage’.

The purpose of this data-file is to aggregate all of our patent assessments in a single reference file, so different companies’ scores can be compared and contrasted. The average score in our patent assessment framework is 3.5 out of 5.0, although there is wide variability in each category.

In each case, we have tabulated the scores we ascribed each company on our five different screening criteria, metrics on the companies’ size and technical readiness and a short descripton of our conclusion. You can also view all of our individual patent assessments chronologically.

Cummins: diesel engine and generator technology?

Cummins is a power technology company, listed in the US, specializing in diesel engines, underlying components, exhaust-gas after-treatment, diesel power generation and pivoting towards hydrogen. We reviewed 80 patents from 2023-24. What outlook for Cummins technology and verticals in the energy transition?

Our recent research suggests power grid bottlenecks, while the rise of AI will also increase the market for diesel gen-sets from 3GW pa to 7 GW pa.

Hence we have been exploring companies in medium-scale commercial and industrial power generation, such as Generac.

Cummins was founded in 1919, headquartered in Indiana, with 75,500 employees and is listed on NYSE with c$40bn of market cap in 2024.

Cummins has filed c5,000 patents historically. We reviewed 80 of the most recent patents filed in 2023-24. Most are clear, articulate specific issues that need to be addressed, including lower-cost or easier manufacturing, then describe specific components and solutions alongside detailed engineering diagrams.

The breakdown of Cummins’s business, by revenue, EBITDA and patent filing focus surprised us, with lower exposure to power generation and a growing focus upon hydrogen.

Based on patent filings, it may even seem as though power generation is being de-prioritized, while hydrogen is being heavily re-prioritized and comprised c15% of recent patents in 2023-24 (chart below).

However the largest focus area remains its core business of diesel engines and exhaust-gas after-treatment (to remove NOx). Our long-term oil demand outlook does see growing demand in this end market.

Exhaust from a diesel engine contains NOx and particulates. An after-treatment unit typically reduces NOx into N2 and H2O using a 30-35% solution of urea in 65-70% deionized water. Heated urea decomposes: CO(NH2)2 + H2O -> 2NH3 + CO2. NH3 then reacts with NO: 4NH3 + 4NO + O2 -> 4N2 + 6H2O. The urea solution is marketed under brands such as AdBlue from BASF. Cummins is among the largest vendors of after-treatment systems in the world, worth >$5bn pa in sales.

However, this business is casting off the shadow of a $1.7bn Clean Air Act fine in 2023, for installing defeat devices. Yet we did find clear, specific and detailed patents improving after-treatment systems.

Another large component of the patents focuses upon diesel engines, improving the fuel economy and resiliency of engines, valves, pistons, cylinders and other components. Details are in the data-file.

This data-file contains our conclusions into Cummins’s diesel engine and generator technology, a broader outlook for some of the company’s verticals, and some undiplomatic comments which we should probably have left out.

BrightLoop: clean hydrogen breakthrough?

Is Babcock and Wilcox’s BrightLoop technology a game-changer for producing low-carbon hydrogen from solid fuels, while also releasing a pure stream of CO2 for CCS? Conclusions and deep-dive details are covered in this data-file, allowing us to guess at BrightLoop’s energy efficiency and a moat around Babcock’s reactor designs?

Chemical Looping Combustion harvests the energy from a fuel, while also producing a relatively pure stream of CO2, by avoiding the oxidation of the fuel in air (78% nitrogen) and instead circulating solid carrier particles through separate reactors (schematic below).

We first wrote about decarbonized carbon in 2019, in a note that identified NET Power’s Allam Cycle Oxy-Combustion process as the leading concept in the space. NET Power has since become a public company with $1.7bn market cap at the time of writing.

Hence what other decarbonized carbon technologies are worth watching? Since 2023, Babcock & Wilcox has been vociferously describing its BrightLoop technology, which is a Chemical Looping Combustion (CLC) technology generating clean hydrogen from hydrocarbon fuels (e.g., coal, biomass, waste or possibly gas).

Babcock & Wilcox is an American energy services company, founded in 1867, headquartered in Akron, Ohio, with 2300 employees, listed on NYSE. It has a $100M market cap at the time of writing, targeting $1bn pa of revenues in 2024 and $100-110M of EBITDA.

Could BrightLoop be a gamechanger? Babcock has said that BrightLoop “greatly reduces the amount of energy and fossil fuel required to produce hydrogen”. And its costs can be “better than current large-scale hydrogen generation technologies such as SMR”. It has been piloted in three locations since 2014. The first commercial unit is in development. And the company has said BrightLoop ultimately has the potential to generate another $1bn pa in revenues.

Hence how does BrightLoop technology work? We have reviewed Babcock’s BrightLoop patents in order to address this question. The image below is based on some guesswork from one of three patents in particular.

We think the patents are high-quality, enabling us to guess at the reaction conditions and energy economics of BrightLoop. Conclusions and deep-dive details are covered in this data-file. We also found many underlying components that are locked up with patents.

Future variants of BrightLoop are also suggested by the patents, which could produce both CO and H2, for clean methanol or Fischer-Tropsch fuels.

LONGi: technology review and solar innovations?

This data-file is our LONGi technology review, based on recent patent filings. The work helps us to de-risk increasingly efficient solar modules, a growing focus on perovskite-tandem cells, and low-cost solar modules, with simple manufacturing techniques that may ultimately displace bottlenecked silver from electrical contacts. Key conclusions within.

LONGi is the largest solar module producer in the world, on a trailing 5-year basis, producing 60GW of PV modules in 2023, founded in 2000, headquartered in Xi’an with shares publicly listed in Shanghai. The company features in our screen of solar module manufacturers.

LONGi aims to continue driving efficiency gains through the solar industry, especially via HJT cells and perovskite tandem cells. In November-2023, LONGi set a new world record of 33.9% cell-level efficiency for a silicon-perovskite tandem cell, which is the first ever cell to surpass the Shockley-Queisser (S-Q) theoretical efficiency limit.

Hence in this LONGi technology review, we have evaluated twenty recent patent families, mainly those filed from 2022 and 2023. Our conclusions, and key learnings from this exercise, are in the data-file.

Manufacturing details were the highlight. One patent covers the nineteen step process from silicon wafer to finished cell, step by step. What surprised us is the high reliance on simple processes (e.g., polymer adhesive tapes, lasering, vapor deposition) and away from more complex semiconductor manufacturing techniques.

Increasing efficiency was the underlying focus in 80% of LONGi’s patents (chart below). Increasing efficiency historically explains 40% of solar cost deflation and is very likely set to continue.

The breadth of options being explored strongly suggests that solar module efficiency will continue improving by at least 0.5%+ per year (absolute terms), and likely higher as perovskite/tandem cells reach commerciality (details in the data-file).

Silver bottlenecks in the solar industry have been a major feature in our recent research, and across our work into silver. 30% of the patents in our sample focused on ways to displace silver out of PV modules. Updated conclusions on silver are in the data-file.

Key challenges for perovskite/tandem solar cells are also described in LONGi’s patents, and summarized in our LONGi technology review. But how much can we de-risk the solutions intended to overcome these challenges, and how much running room lies ahead?

Origen Carbon: DAC breakthrough?

Origen DAC technology

Origen Carbon Solutions is developing a novel DAC technology, producing CaO sorbent via the oxy-fuelled calcining of limestone with no net CO2 emissions. It is similar to the NET Power cycle, but adapted for a limestone kiln. The concept is very interesting. Our base case costs are $200-300/ton of CO2. This data-file contains our Origen DAC technology review.

Origen Carbon Solutions was spun-out from the University of Oxford in 2013, now has around c50 employees and is privately owned, with recent capital from HBM Holdings, Elemental Exelerator and Frontier (i.e., Stripe, Google, Meta).

The ZerCal process, being piloted by Origen in 2023, aims to decompose limestone (CaCO3) using an oxy-fired flash calcining process which emits no net CO2. The CaO can then be used as a DAC sorbent, reacting with atmospheric CO2 to form CaCO3 solids.

A key challenge in post-combustion CCS is the need to separate CO2 (4-40% concentration) from air (mostly nitrogen). Amines can do this, but the process is costly, energy intensive and amines can be degraded by contaminants.

Oxy-combustion is an alternative approach that avoids introducing air/nitrogen into the combustion process, instead re-circulating exhaust gases, and then adding pure oxygen from an air separation unit or swing adsorption plant.

Hence the post-combustion reaction products are limited to CO2 and water (i.e., there is no nitrogen). CO2 and H2O can easily be separated. In the power sector, a similar approach is famously being taken by NET Power to produce very low-carbon gas power.

Oxy-combustion in limestone kilns is covered in Origen’s patents (schematic below). Note that this is different from other DAC designs. It is not an L-DAC design, nor an S-DAC design, nor an E-DAC design, but an oxy-fired combustion design.

Origen DAC technology
Schematic for oxy-fuelled calcining DAC

DAC costs of $200-300/ton may be achievable based on simple, back-of-the-envelope calculations, using Origen’s patent disclosures. Please download the data-file to stress-test capex costs, gas prices, oxygen costs, limestone costs, and other opex.

Possible DAC costs from oxy-fuelled calcination of limestone

CaO is an interesting DAC sorbent because it will slowly react with ambient CO2 without having to incur the high energy costs of fans and blowers. It could work well in petroleum basins with stranded gas that might otherwise be flared.

Another advantage that is cited in the patents is that the oxygen plant and excess heat from the oxy-fuelled calcining reaction can demand shift to help backstop (increasingly volatile) power grids (i.e., a ‘smooth operator‘), including amidst the build out of renewables.

Another particularly interesting patent adapts the process to oil shale that contains over c20% organic material and over c30% carbonate. It is noted that oxy-fired combustion of this low-grade resource could generate heat and electricity, its own CO2 could be captured directly from the plant, while the ‘waste product’ of CaO could be used as a DAC sorbent (see row 8 of the Patents tab for some mind-blowing numbers!).

Our Origen DAC technology review draws out details from these disclosures, excitement over the concept, and key question marks that remain for de-risking commercialization.

Mitsui Chemicals: solar encapsulants?

Mitsui Chemicals solar encapsulants

Solar encapsulants are 300-500μm thick films, protecting solar cells from moisture, dirt and degradation; electrically insulating them at 4 x 10^15 Ωcm resistivity; and yet allowing 90% light transmittance. The industry is moving away from commoditized EVA towards specialized blends of co-polymers and additives. Is there a growing moat around Mitsui Chemicals’ solar encapsulants?

Mitsui Chemicals traces its origins back to 1912, employs 19,000 people globally, and is listed in Tokyo. The company has featured in our work before, as 15-20% of revenues are derived from polyurethanes, where we think the rise of electric vehicles could free up cheap feedstocks and raise polyurethane margins.

Another view in our recent research is that new energies are entering an age of materials, where there is less running room to achieve deflation via ‘scaling up to mass manufacturing’. Materials are increasingly important. Solar and battery manufacturers will increasingly be willing to pay premia for advanced materials that improve efficiency.

Consistent with this thesis, Mitsui Chemicals is restructuring its films business in 2023-24, spinning out a packaging films business, and concentrating upon films and industrial films, combined into a new, wholly owned subsidiary called Mitsui Chemicals ICT Materials Inc, which is envisaged to become a “third pillar of earnings” across the company.

Solar encapsulants. The role of 300-500μm thick encapsulant layers is to encase solar cells, protect them from humidity, dirt/dust, damaging UV, electrically insulate them and ‘cushion’ them from damage or vibration against the rigid overlying glass and rigid underlying back-sheet. However, typical encapsulants only transmit 90% of the light through the solar module, and they are prone to degradation and delamination.

Mitsui Chemicals solar encapsulants
Encapsulant likely allows 90 percent transmittance of light in the visible spectrum to underlying solar cells, or less if degraded

Ethylene vinyl acetate has historically dominated the solar encapsulant market, and retains a >50% market share in 2023. However, polyolefin encapsulants (POE) and mixed EVA-POE-EVA encapsulants (EPE) have been gaining share, as they protect better against degradation. Reasons are explained in the data-file.

Based on the patent library, Mitsui Chemicals’ solar encapsulant offering is clearly focused on alpha-olefin co-polymer encapsulants, plus additives to improve their processibility, longevity and ultimately the performance of solar modules.

Please download the data-file for our conclusions into Mitsui Chemicals solar encapsulants (and the market more broadly), based on reviewing relevant patents, to assess whether the company has a growing moat in this space, as well as more broadly, in the new age of materials.

Verdox: DAC technology breakthrough?

Verdox DAC technology

This data-file reviews Verdox DAC technology, optimizing polyanthraquinones and polynaphthoquinones, then depositing them on porous carbon nanotube scaffolds, using similar methods to lithium ion batteries. These quinones are shown to selectively adsorb CO2 when a voltage is applied, then desorb them when a reverse voltage is applied, unlocking 70% lower energy penalties than incumbent L-DAC and S-DAC?

Verdox is a spin-out from MIT, founded in 2019, which raised $80M in February-2022, to develop an electro-chemical DAC system. In February-2022, Aluminium-producer, Hydro, also invested a further $20M in Verdox (as the off-gas from aluminium smelters has 1% CO2).

Electrochemical DAC allows gas to flow through an electrochemical cell with low resistance, adsorbs CO2 by applying a voltage, then later releases the CO2 by applying a reverse voltage. Our recent DAC review sees potential in this approach, including via a rising number of next-generation DAC companies.

The Verdox patents that we reviewed used quinones, mostly naphthoquinones, anthraquinones (images below) and polymers of these quinones such as polyanthraquinones (cited in press articles) as electrochemically active sorbents.

When a voltage is applied, quinones can reduce (gain one electron per C=O group). The reduced naphthoquinones can selectively react with CO2.

Different R-groups in positions (*1 through *8 of the images below) and different additives on the carbon scaffold alter the electron donating properties of the naphthoquinones to C=O groups, and in turn, alter the tendency to adsorb and desorb CO2.

Verdox DAC technology
Naphtoquinones reaction with CO2
Verdox DAC technology
Antrhraquinones reaction with CO2

Carbon scaffold. In a functioning electrochemical DAC system, polyanthraquinones and polynaphthoquinones will be deposited on scaffolds of porous carbon nanotubes. The patents contain excellent details. Interestingly, the manufacturing process is quite similar to today’s battery cathode manufacturing. And some of the patents specifically name-check Huntsman’s MIRALON nano-carbon as an input.

Please download the data-file for our conclusions into Verdox DAC technology, how much we can de-risk from the patents, and other specific details (performance, cost, other cell materials, likely manufacturing details).

Solvay: lithium ion battery binders and additives?

Solvay battery

Solvay is a chemicals company with growing exposure to battery materials, especially the PVDF binders that hold together active materials in the electrodes. But also increasingly in electrolyte solvents, salts and additives. Interestingly, our patent review finds optimizations of this overall system can improve the longevity and energy density of batteries, which may also lead to consolidation across the battery supply chain?

Solvay is a chemicals company, listed in Brussels and Paris, with history dating back to 1863, 22,000 employees, €13.4bn of revenues in 2022, 24% EBITDA margin and €11bn of market cap at the time of writing in September-2023.

Its Materials segment produces specialty polymers and composites for light-weighting vehicles and aerospace parts; its Chemicals business produces soda-ash, peroxides, silica, et al; and its Solutions business produces specialty chemicals, aromas, coatings, Rare Earths, mining solutions and battery recycling.

For the energy transition, Solvay is a leading producer of battery binders, which are fluorinated polymers, mainly PVDF, that physically bind the metal particles together in a battery cathode and the graphite particles together in a battery anode. Solvay has the broadest PVDF offering in the battery materials space, spanning across both suspension- and emulsion technologies. And it is investing to expand capacity in France, the US and China. We found some interesting battery binder innovations in the patents.

However what surprised us most about reviewing Solvay’s patents was that there was 2x more focus on developing battery electrolytes and additives than on improving binders. Typically, the electrolyte of a lithium ion battery consists of LiPF6, an ionic salt, which is dissolved in ethylene carbonate, dimethyl carbonate or vinylene carbonate. However, this also places a limit on the battery energy density (and by extension, materials intensity), as most of these solvents start decomposing at 4.2-4.4V. For more details, please see our deep-dive report into battery degradation.

The patents strongly imply that electrodes, binders, electrolyte solvents, salts and additives form an ‘overall system’ where all of the components interact. Hence as the battery industry focuses upon lower degradation and higher voltage (more energy dense) battery chemistries, we wonder if this will drive consolidation across the supply chain, where battery manufacturers will want to buy all of these mutually interactive materials as part of an overall offering from a single integrated supplier rather than purchasing them separately?

Overall Solvay’s battery patent library is complex, with literally hundreds of different electrolyte salts, solvents and additives and blended together in cocktails. Over 90% of the patents provided specific details of specific compositions, aimed at improving cell longevity, or voltage, or efficiency (charts below).

Solvay battery
Electrolyte Additives improve battery cell stability, longevity and efficiency (images after Solvay)

Back in the world of battery binders, there is also a side focus on developing lithium metal batteries, or solid state batteries. Note that a typical lithium ion battery uses fluorinated polymer binders in its electrodes, but a solid state battery would use fluorinated polymer binders in its electrolyte too.

Please download the data-file for further conclusions from our Solvay battery technology review, and conclusions on whether the company has a moat around its patents.

Energy Recovery Inc: pressure exchanger technology?

pressure exchanger

A pressure exchanger transfers energy from a high-pressure fluid stream to a low-pressure fluid stream, and can save up to 60% input energy. Energy Recovery Inc is a leading provider of pressure exchangers, especially for the desalination industry, and increasingly for refrigeration, air conditioners, heat pump and industrial applications. Our technology review finds a strong patent library and moat around Energy Recovery’s pressure exchange technology.

Energy Recovery Inc was founded in 1992, it is headquartered in California, listed on NASDAQ, with 250 employees and $1.3bn of market cap at the time of writing. Financial performance in 2022 yielded $126M revenues, 70% gross margin, 20% operating margin.

The PX Pressure Exchanger is Energy Recovery Inc’s core product. It transfers pressure energy from a high pressure fluid stream to a low pressure fluid stream at 98% efficiency, yielding up to 60% energy savings in specific contexts. The company aims to grow revenues as much as 5x in the next half-decade due to increasing need for global energy efficiency.

Pascal’s Law states that bringing a high pressure and low pressure fluid into contact will result in their pressures equalizing with minimal mixing. This principle is used in pressure exchangers. As a rotor rotates, it brings a low pressure fluid A into contact with a high pressure fluid B, equilibrating their pressure, then discharging fluid A at higher pressure.

For example in a desalination plant, incoming seawater at 1-3 bar of pressure is pressurized up to 40-80 bar using pumps, pushing it across a membrane that is porous to water but not to dissolved salts. Energy remains in this 40-80 bar concentrate stream. It is better to recover this energy than blast it back into the Ocean! Thus pressure exchange can lower the energy requirements of desalination by as much as 60%.

Energy Recovery Inc’s patents note that rotary pressure exchangers were first invented in the 1960s, progressed in the 1990s, but prior to its own designs, the company argues that no one had designed efficient and reliable systems, which could run without an external motor to rotate them, achieved by optimizing the shape of the flow channels.

Our technology review found 65 patent families from Energy Recovery Inc. Overall, we think the patent library is high-quality and the company will retain a moat and leadership in the pressure exchange market, based on its patents and historical experience. Although some early patents are coming up to expiry. Details are in the data-file.

Desalination has been Energy Recovery’s core market historically. However new markets are emerging, from cryogenic cycles through to applications focused on shale (although the latter requires avoiding the corrosive impacts of sand and debris in fluid streams).

pressure exchanger
End markets for pressure recovery based on patents filed by Energy Recovery Inc.

Refrigeration, air conditioning and heat pumps are seen as a growing source of demand. One patent notes that regulation is increasingly phasing out HFCs that can have 13,000x higher GWPs than CO2, and these systems use CO2 as the refrigerant instead. However CO2 based refrigeration cycles have maximum pressures of 1,500 psi or greater, compared to HFC/CFC systems at 200-300psi. This makes the energy savings from pressure exchange increasingly important, siphoning away a portion of the evaporated refrigerant and re-pressurizing it using high-pressure refrigerant downstream of the heat rejection stage, before the expansion valve stage.

Plug power: green hydrogen breakthroughs?

Plug Power technology review

Our Plug Power technology review is drawn from the company’s recent patent filings, which offer some of the most detailed disclosures we have ever seen into the manufacturing of PEM electrolysers and fuel cells, underlying catalyst materials, membranes and their manufacturing. One patent seems like a breakthrough. Other patents candidly presented challenges for scaling up green hydrogen and raised questions for us.

Plug Power is a green hydrogen company, founded in 1997, headquartered in New York, with 3,350 employees and c$5bn market cap in mid-2023.

Plug Power is aiming to scale up as a world-leading supplier for $20bn pa of equipment and services across the end-to-end green hydrogen ecosystem by 2030: from electrolysers, to logistics, to energy generation in fuel cells, and niche applications such as forklift trucks (where it has an incumbent position, underpinning c30% of 2023’s revenue targets).

For an overview of how a Proton Exchange Membrane electrolyser works, we have written a short article here. We have not been able to de-risk much green hydrogen in our roadmap to net zero, due to challenges of cost, efficiency, degradation and practicality, as catalogued here.

But on the other hand, Plug Power’s share price has declined by 85% from its 2021 peak, and the purpose of our patent reviews is to stress test our pre-existing conclusions, to see what we could be missing.

Overall the patent library was very broad ranging (chart below), and raised some question marks for us around where the ‘focus’ and ‘moat’ really are in the business. More discussion in the data-file.

Plug Power technology review
Recent patents filed by Plug Power reange across electrolyser, fuel cells, hydrogen logistics, vehicles and balance of plant

Half a dozen recent patents may offer some support to Plug’s mass manufacturing ambitions. Some of these patents contain the most detail we have ever seen on how electrolyser membranes are manufactured, how anode catalysts are synthesized, materials used in different components of a fuel cell stack, and where the pinch points currently are in manufacturing.

The most exciting Plug patent that crossed our screen during this review discusses a ‘dry’ manufacturing process for PEM electrolyser membranes, unlocking lower uses of precious metals (especially platinum) and thinner membranes at higher temperatures, which in turn could improve output and efficiency, and thus deflate electrolyser costs (details in the data-file).

Plug Power technology review

Generally the patents did not contain the same focus on avoiding degradation, as for example, the recent patent library from Bloom Energy.

Further details and conclusions that stood out to us from our Plug Power Technology Review are available in the data-file.

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