the research consultancy for energy technologies
The role of metals in the energy transition has become an unexpected focus in our research, with 3-30x demand growth for copper, lithium, silver, aluminium, nickel, and others. Hence you could even argue the ‘Super-Majors’ of the energy transition will include super-miners.
The key drivers are renewables and electrification. Solar panels use silver as their front contacts. Wind turbines contain Rare Earths. Lithium ion batteries contain lithium, cobalt, nickel, et al. All electrification requires conductors, such as copper within wiring, and aluminium within large overhead transmission lines.
At the same time, it is important to decarbonize the production of metals, which is itself energy- and CO2-intensive. Arounds 2 tons of CO2 are emitted per ton of steel, rising to an astronomical 9kT of CO2 per ton of gold. This has taken us down the rabbit hole of specific mining technologies and metal refining technologies, as we have explored the role of metals in the energy transition.
Power grid circuit kilometers need to rise 3-5x in the energy transition. This trend directly tightens global aluminium markets by over c20%, and global copper markets by c15%. Slow recent progress may lead to bottlenecks, then a boom? This 12-page note quantifies the rising demand for circuit kilometers, grid infrastructure, underlying metals and who benefits?
Electric currents create magnetic fields. Moving magnets induce electric currents. These principles underpin 95% of global power generation, 50% of wind turbines, motors that comprise 45% of electricity use, heat pumps, and electric vehicles. But what actually are magnets? How are they measured? Why do so many use Rare Earth metals? This 15-page overview of magnets explains key magnet concepts for the energy transition.
The DRI+EAF pathway already underpins 6% of global steel output, with 50% lower CO2 than blast furnaces. But could IRA incentives encourage another boom here? Blue hydrogen can reduce CO2 intensity to 75% below blast furnaces, and unlock 20% IRRs at $550-600/ton steel? This 13-page report explores the opportunity, and who benefits.
Electra is developing an electrochemical refining process, to convert iron ore into high purity iron, and ultimately into steel, using only renewable electricity. It has raised c$100M, gained high-profile backers, and is working towards a test plant. This 9-page note is an Electrasteel technology review, based on an exceptionally detailed patent, finding clear innovations, but also some remaining risks and cost question marks.
Global steel production has risen by 10x since 1950, to 2GTpa by 2022, and demand is still rising at 2.5% per year since 2012. 70% of steel is made in blast furnaces and basic oxygen furnaces, in a pathway that emits over 2 tons of CO2 per ton of finished steel (model here). Hence the steel industry comprises 8% of global CO2 emissions.
Blue steel can be made by increasing the portion of blue hydrogen blending in directly reduced iron and electric arc furnaces, in a process that is already technically mature, comprises 6% of global steel production, and can yield 50-75% decarbonization of steel with minimal additional costs, and with a possible IRA-triggered boom on the way (note here).
Green steel can also be made via a similar pathway to DRI+EAFs and blending in green hydrogen as the reducing agent. In the past, we worried that this pathway would be overly expensive, and cause some inflationary circular reference errors in new energies value chains (note here).
Electra’s iron ore reduction process is an alternative method for steel production using only renewable electricity. It uses a proton exchange membrane electrolyser to generate protons from water, uses the protons to acidically dissolve Fe3+ ions from iron ores, electrochemically reduces Fe3+ to Fe2+, then purifies the Fe2+ ions, filters them to a separate electrowinning cell, and plates out pure Fe metal. This is patent protected.
This 9-page report is our Electrasteel technology review, based on a particularly detailed patent that we have assessed on our usual framework (pages 1-2). It covers in detail how we think Electrasteel’s technology works (pages 3-5), where we think the patents point to a breakthrough (page 6), possible energy intensity (page 7), renewable steel costs (page 8) and remaining technical challenges that need to be de-risked (page 9).
Super-alloys have exceptionally high strength and temperature resistance. They help to enable 6GTpa of decarbonization, across efficient gas turbines, jet engines (whether fueled by oil, hydrogen or e-fuels), vehicle parts, CCS, and geopolitical resiliency. Hence this 15-page report explores nickel-niobium super-alloys, energy transition upside, and leading companies.
Direct reduced iron (DRI) is produced by reacting iron ore with H2-rich syngas, fueled by natural gas, in over 150 facilities worldwide. Direct reduced iron costs $300/ton, consuming 3,000kWh/ton of energy and 0.6 tons/ton of CO2. The process can be decarbonized via low-carbon hydrogen, as the world strives towards decarbonized steel.
This data-file is an economic model of direct reduced iron (DRI) costs, including a breakdown of capex, opex, natural gas, electricity, iron ore, other materials, labor and taxes.
Direct reduced iron underpins 6% of global steel production, running to 120MTpa of the world 2GTpa global steel production and ramping up steadily since the 1970s (chart below).
How does the direct reduction iron process work? Iron ore is heated in a shaft furnace, alongside syngas, which contains CO and H2 derived from natural gas, thereby reducing the iron oxide, while forming waste gases of H2O and CO2. The product can later be upgraded into steel in an electric arc furnace.
Leading DRI technologies include Midrex and Tenova HYL, and the data-file contains a database of all the deployments to-date, plus future low-carbon plans.
DRI products include Hot DRI (converted straight into an EAF before it is cooled down), Cold DRI that is cooled down to below 60C before subsequent processing, and ‘Hot Briquetted Iron’ (HBI), which is a stabilized product and can be shipped globally in a bulk tanker.
Base case costs for producing DRI most likely run to $300/ton of iron, to earn a 10% IRR on a 2MTpa production facility costing $600M. Energy intensity is most likely around 3,000 kWh/ton and CO2 intensity is modelled at 0.6 tons/ton of iron, although this will vary according to the percent of iron reduction delivered by hydrogen versus CO (chart below).
CO2 intensity for the overall value chain is currently estimated at around 1.1 tons/ton, which is 50% lower than the blast furnace/basic oxygen furnace route.
For decarbonization of the steel industry, we think that direct reduced iron can increasingly be made with hydrogen comprising almost all of the reducing agent, and renewables-heavy electricity. Ultimately, this can reduce the total CO2 intensity to 0.6 tons/ton, which is 75% below higher-CO2 steel.
This data-file aggregates information into the strength, temperature resistance, rigidity, costs and CO2 intensities of important structural metals and materials. It shows why nickel-based super-alloys are used in gas turbines and jet engines; why glass fiber and carbon fiber are used in wind turbine blades; why traces of Rare Earth metals are introduced into high-pressure pipelines for gas transportation or CCS; why overhead power lines are blends of aluminium and steel.
Strength is the ability to withstand forces? 1 Pascal means that a force of 1 Newton is acting over an area of 1 m2. When applied to gases, 1 Pascal of force per m2 of area denotes pressure. But when applied to solid materials, 1 Pascal of force per m2 of area denotes stress.
Stress and strain. As more stress is applied to materials, they begin to deform. For example, under ‘tensile stress’, where the force is pulling a material apart, the strain may occur as elongation.
Elastic Deformation. The type of strain caused by low levels of tensile stress is ‘elastic deformation’, which means that the material will revert to its original shape when the stress is removed.
Young’s Modulus. During elastic deformation, there will be a fixed ratio of stress-to-strain. Each additional unit of stress (in GPa) causes a fixed degree of elongation (dimensionless). High Young’s Modulus means a more rigid and less elastic material.
Yield Strength. Beyond a certain degree of stress, additional stress will not cause further elastic deformation, but instead, will cause plastic deformation. When this stress is removed, then the material does not return to its original shape. Yield strength is measured in MPa.
Ultimate Tensile Strength. If stress increases further, then ultimately the material will fail. It will ‘neck open’ and then tear. The point at which this begins to happen is the Ultimate Tensile Strength. And it is also measured in MPa. In other words, a tensile strength of 500 MPa means that it will take a mass of 50kT tons to tear apart 1m2 of a material.
Poisson’s Ratio. Also during elastic deformation, as a material stretches, it will become narrower. A very stretchy material, such as rubber, has a Poisson’s Ratio close to 0.5. Conversely, a material such as paper has a very low Poisson’s Ratio, around 0.1, and will ‘give’ very little before tearing.
Other Metrics. There are other types of stress, such as compressive, shear and rotational stress. We are not going to catalogue all of these properties in this file, but use tensile stress as a proxy.
This data-file aggregates information into the strength, temperature resistance, rigidity, costs and CO2 intensities of important structural metals and materials, which matter increasingly in the energy transition.
The data show why nickel-based super-alloys are used in gas turbines and jet engines, due to their resistance to deformation, even at high temperatures. The efficiency of a gas turbine/jet engine is a direct function of the hottest temperature in the Brayton Cycle.
In the wind industry, glass fiber and carbon fiber are used in wind turbine blades, as they are exceptionally light and rigid.
In CCS and gas transportation, traces of Rare Earth metals such as Niobium are introduced into high-pressure pipelines, to impart higher strength, and enable higher volumes of flow, even of mildly corrosive fluids, without requiring overly thick pipeline walls.
In power grids, overhead power lines are not made from conductive copper, but blends of aluminium and steel, for structural reasons.
This data-file is a screen of leading companies in super-alloys, covering US pure-plays, mega-caps in industrials and defence, and emerging world producers of Rare Earth metals.
In each case, we have noted the size of the company (employees, revenues) and notes that seemed relevant and interesting to us.
One of the largest names in super-alloys is Special Metals, which owns the brand name Inconel, and is a subsidiary of Berkshire Hathaway. For example, Inconel X-750 was used in NASA’s Saturn V rocket engines.
Other companies include a listed US manufacturer of super-alloys and a listed US manufacturer of super-alloy components. Both sell mostly into aerospace and defence (45% and 70% of revenues, respectively).
We have also aggregated data into the recipients of ARPA funding to develop super-alloys for next-gen gas turbines, which will boost maximum turbine inlet temperatures from 1,600C to 1,800C, which would improve turbine efficiency by as much as 5pp. More than half of these awardees are using AI methods and/or niobium alloying.
The data-file does not include producers of nickel, a crucial input for high-grade alloys and super-alloys, as nickel producers are instead captured here. Or producers of high-grade steels or gas turbines. Materials properties of super-alloys are tabulated here.
The screen of leading companies in super-alloys does include niobium producers, where the market is dominated by just three producers: CBMM, Magris and China Molybdenum.
Boston Metal is a private company, spun out of MIT in 2012, developing “a revolutionary one-step process to decarbonize steel production using clean electricity”, around 4MWH/ton of steel. This data-file is a Boston Metal technology review, based on assessing 55 patents across 3 families. We were unable to de-risk the technology simply based on these patents. A key focus area is conveying current into the MOE cell, as it operates around 1,600C, which is above the melting point of most conductor materials.
The global steel industry emits over 2 tons of CO2 per ton of steel (model here), as it produces 2GTpa of steel materials (steel research here), which equates to total CO2 emissions of 4GTpa, or 8% of the global total (data here). We think a key challenge for decarbonizing steel is to avoid large inflation in steel costs, which would cascade through to inflate the costs of substantively all new energies (note here).
Boston Metal is aiming to commercialize a molten oxide electrolysis process, using large currents to reduce the Fe3+ ions in molten Fe2O3 into pure iron, which can be tapped from the bottom of the cell.
An industrial analogy comes from the Hall-Héroult process, which dissolves alumina (Al2O3, 2,000C melting point) in molten cryolite (Na3AlF6, at 1,000C), then applies a large electrical current to reduce aluminium metal (model here). The beauty of this system is in the cryolite. Not only does it halve the operating temperature of the cell, but the sodium cations (-2.71V) have a standard electrode potential that is more negative than the aluminium ions (-1.67V), so the aluminium ions will preferentially reduce into metal while the sodium will remain ionized (more here).
The key challenge for MOE of iron ore is temperature. From our patent review, we could not identify any clear candidate solvents, which would materially lower the melting point needed for electrolysis of iron oxide. Boston Metal also alludes to its cells running at 1,600C, which is near the melting point of iron/iron ore.
What materials could serve as current collectors for these cells? Most conductive metals, and even most super-alloys, have melted by 1,500C. There are refractory ceramics that tolerate temperatures around 2,500C, but they are not conductive. There are refractory metals that tolerate these high temperatures, but they have higher redox potentials than iron, meaning they would oxidize and cease to be conductive? Likewise, graphite has a very high melting point, but is prone to oxidizing into CO2 at such high temperatures.
The Boston Metal patents that we reviewed addressed the challenge of designing current collectors that would melt without excessive convective mixing with the molten iron. This is achieved in one patent by optimizing their geometry.
We also need to acknowledge that Boston Metal may have developed technologies that are not covered in their patents. And our patent reviews always involve some guesswork. However, we hope the work is constructive and helps decision makers to understand what has been IP-protected, and to guide future analysis and questions.
Please download our Boston Metal technology review, for our observations about these patents, their specificity, focus and scale-up into commercial manufacturing; and how these patents compare to other patent libraries that we have assessed.
Ramping new energies is creating bottlenecks in materials. But how much can material use be thrifted away? This 13-page note is a case study of silver intensity in the solar industry, which halved in the past decade, and could halve again. Conclusions matter for solar companies, silver markets, other bottlenecks.