This model captures the costs of storing hydrogen, which appear to be much higher than storing natural gas.
We estimate a $2.50/kg storage spread may be needed to earn a 10% IRR on a $500/kg storage facility, while costs could be deflated to $0.5/kg if nearby salt caverns are available and projects are large and efficient. Please download the data-file to stress test the economics.
The model hinges on costs of tanks and compressors, where costs are bounded based on technical papers and online sources. Detailed notes and input data are tabulated in backup tabs behind the model.
This data-file compiles all of our insights into publicly listed companies and their edge in the energy transition: commercialising economic technologies that advance the world towards ‘net zero’ CO2 by 2050.
Each insight is a differentiated conclusion, derived from a specific piece of research, data-analysis or modelling on the TSE web portal; summarized alongside links to our work. Next, the data-file ranks each insight according to its economic implications, technical readiness, its ability to accelerate the energy transition and the edge it confers on the company in question.
Each company can then be assessed by adding up the number of differentiated insights that feature in our work, and the average ‘score’ of each insight. The file is intended as a summary of our differentiated views on each company.
The screen is updated monthly. At the latest update, in July-2020, it contains 167 differentiated views on 87 public companies.
The aim of this data-file is to tabulate the criticisms of carbon offsetting through nature based solutions such as reforestation.
The full database contains over 100 criticisms, summarized through quotes and paraphrasings, which we have encountered in our communications, in technical papers and in press articles.
We have collated the criticisms into ten main categories, which are ranked by year and summarized in the data-file (chart above). We argue these challenges can be overcome and remain constructive on carbon offsets using nature based solutions.
Additive manufacturing (AM) can eliminate 6% of global CO2, across manufacturing, transport, heat and supply chains. We have quantified each opportunity and reviewed 5,500 patents to identify who benefits, among Capital Goods companies, AM Specialists and the Materials sector.
Industrial heat comprises around 20% of global CO2 emissions, but around half of all the heat generated may ultimately be wasted.
Hence, this model simplifies the economics of using a heat exchanger to recover waste heat from an industrial facility, based on the engineering equations of heat exchange and recent technical papers.
Our base case IRR is 6%, in the US, due to low, $3/mcf gas prices. This is uplifted to above 20%, either if we assume European gas prices (around $6/mcf) or a $50/ton CO2 price. IRRs can reach 40% if we assume both.
High IRRs may be necessary to unlock waste heat recovery. First, each project is complex, with large amounts of engineering, and implementation disrupts operations at a plant. Second, although IRRs are high, NPVs are low, as many projects will be small-scale. For example, the NPV10 may be less than $1M on a single, small heat exchanger project, even if it achieves a 40% IRR.
This data-file tabulates the number of patents filed into different types of batteries, by year and by geography. Hence, we have identified the patent leaders in lithium ion technology, based on 158,000 patents and the battery materials that they descibe (above).
Continued cost-deflation in lithium ionis suggested by the 26,000 patents filed in 2019, which has doubled in the past 5-years (below), led by China (two-thirds of the patents). The data-file also shows a clear technology leader, while some companies are accelerating. Others are pulling back on R&D or over-concentrating on cobalt.
Competition is accelerating,making leading technologies important. We recently argued supercapacitors could be better suited for hybridizing industry and transport. Moreover, redox flow batteries are emergingas the most exciting new battery technology for grid storage, with patent activity doubling since 2014, to 894 in 2019 (also above). Hence we include notes on ESS Inc.
Interest has been waningin solid state batteries (-57% since 2014) and liquid metal batteries (-67%).
A descriptionof each battery type is shown in the ‘battery types’ tab. Download the data-file for a break-out of the data by country.
Attaining ‘Net Zero’ can uplift an Energy Major’s valuation by c50%. Specifically, this means emitting no net CO2, either from the company’s operations (Scope 1&2 emissions) or from the use of its products (Scope 3). This 19-page report shows how a Major can best achieve ‘net zero’ by exhibiting four cardinal virtues. Decarbonization is not a threat but an opportunity.
Fuel retailers have a game-changing opportunity seeding new forests. They could offset c15bn tons of CO2 per annum, enough to accommodate 85Mbpd of oil and 400TCF of annual gas use in a fully decarbonized energy system. The cost is competitive, well below c$50/ton. It is natural to sell carbon credits alongside fuels and earn a margin on both. Hence, we calculate 15-25% uplifts in the value of fuel retail stations, allaying fears over CO2, and benefitting as road fuel demand surges after COVID.
Switching coal- to gas-fired power generation is the single largest line-item in our models taking the energy system to net zero emissions and keeping atmospheric CO2 to below 450ppm. This model illustrates the economics.
Mathematically, the analysis works by deducting a model of a new coal-fired power plant from a model of a new gas-fired power plant, so you can easily stress-test the relative impacts of different coal prices, gas prices, CO2 prices, capex costs and efficiency factors.
CO2 prices accelerate coal-to-gas switching, under our base case, long-term pricing assumptions. For brownfield plants, which are already standing, a $10/ton CO2 price is required in the US, c$25/ton in Europe and c$40/ton in Emerging Markets. For greenfield plants, the US and Europe are already set to switch from coal to gas, due to relative capex costs, but in the emerging world, again a c$40/ton CO2 price is required.