Electric vehicle charging: the economics?

Costs of electric vehicle charging stations

This data-file models the economics of electric vehicle chargers. First, we disaggregate costs of different charger types across materials, electronic components, labor, permitting, fees, opex and maintenance (below).

Next we model what fees need to be charged by the charging stations (in c/kWh) in order to earn 10% IRRs.

Economics are most favorable where they can lead to incremental retail purchases and for larger, faster chargers.

Economics are least favorable around multi-family apartments, charging at work and for slower charging speeds.

An economic increment can also be added to reflect the benefits of demand shifting to backstop increasingly reneawble-heavy grids.

Prevailing wind: new opportunities in grid volatility?

UK wind power

UK wind power has almost trebled since 2016. But its output is volatile, now varying between 0-50% of the total grid. Hence this 14-page note assesses the volatility, using granular, hour-by-hour data from 2020. EV charging and smart energy systems screen as the best new opportunities. Gas-fired backups also remain crucial to ensure grid stability. The outlook for grid-scale batteries has actually worsened. Finally, downside risks are quantified for future realized wind power prices.

UK grid volatility as renewable gain share?

UK grid volatility

This data-file contains the output from some enormous data-pulls, evaluating UK grid power generation by source, its volatility, and the relationship to hourly traded power prices. We conclude the grid is growing more expensive and volatile.

Different tabs in the data-file cover the total monthly demand of the UK power grid since 2016, broken down by generation source, month-by-month and smoothed over trailing twelve-month timeframes; statistical analysis of hourly power prices, by day and by quarter; and an hourly cross-correlation of wind generation with power prices (chart below).

We have recently updated the data-file to capture the extreme price spikes and volatility seen in 3Q2021.

The data-file is also regularly updated and we are happy to run bespoke analysis on the underlying data-sets for TSE clients.

Smart Energy: technology leaders?

Smart energy systems

Smart energy systems are capable of transmitting and receiving real-time data and instructions. They open up new ways of optimizing energy efficiency, peak demand, appliances and costs. Over 100M smart meters and thermostats had been installed in the United States (including at c90M residences) and 250M have been installed in Europe by 2020.

The purpose of this data-file is to profile c40 companies commercializing opportunities in smart energy monitoring, smart metering and smart thermostats. The majority are privately owned, at the venture or growth stage. We also tabulate their patent filings.

We find most of the offerings will lower end energy demand (by an average of 7%), assist with smoothing grid-volatility, provide appliance-by-appliance demand disaggregations and encourage consumers to upgrade inefficient or potentially even defective appliances. Numbers are tabulated in the data-file to quantify each of these effects.

Further research. Our recent commentary that summarises the key points on Smart energy systems is linked here. Our outlook on the most conductive metals used in the energy transition is linked here.

Turbo-charge gas turbines: the economics?

costs of turbo-charge gas turbines

This data-file models the economics of turbo-charging gas turbines, which increases the mass flow of combustion air, in order to improve their power ratings c10-20%. This is especially important to counteract warm temperatures, which notoriously degrades power output (below, right).

Our model is derived from technical disclosures from PowerPhase, a leading private company that is commercializing the TurboPhase technology. We estimate base case IRRs of c13% in Europe and c20% in the US. Sensitivities can be flexed in Cells H7:17 of the model (below, left).

Turbo-charged gas turbines could be among the non-obvious technologies to gain greater share as grids become more saturated with renewables, in addition to CHPs, PCMs and fuel cells, per our prior research. All of these are much more economical than grid-scale batteries.

HVDC power transmission: the economics?

HVDC costs

HVDC costs? This model captures the economics of transporting electricity (especially from renewable sources, such as wind and solar), over vast distances, using high voltage direct current power cables (HVDCs).

HVDCs are increasingly important, as we see power transmission capex rising 4x in our roadmap to net zero. HVDC costs and round-trip efficiencies can also surpass batteries for integrating more renewables into grids.

Our numbers are based on technical papers, a dozen past projects and a granular bottom-up breakdown of costs (both capex and opex). Our notes from technical papers follow in the final tab as context.

We have also reviewed the capex costs of over a dozen past projects and proposed projects, moving an average of 3GW over an average of 1,500km, at 500kV and 2.4 kA per line. Project type and geography are the biggest determinants of capex. Underlying project details are covered in detail in the data-file.

Our base case estimate is that a 3-10c/kWh transportation spread is required to earn a 10% levered IRR on 1,000-mile cable. Numbers are better for larger and higher utilization lines.

Please download the data-file to stress test HVDC costs, power prices,  capex, opex, line losses, leverage levels and fiscal impacts.

The second download compares the cost of transporting large quantities of power down a DC cable, versus converting it into hydrogen and piping the hydrogen.

The opportunity in HVDCs is covered in more detail across our broader research, including an overview of power transmission,  an adjacent opportunity in STATCOMs, a screen of leading HVDC companies, a patent review for Prysmian, project parameters for Chinese HVDCs, and an overview of future aluminium and copper demand.

Exhaust gas recirculation in gas power: the economics?

costs for CO2 capture at gas power turbine

This data-file explores an alternative design for a combined cycle gas turbine, re-circulating exhaust gases (including CO2) after the combustion stage, back into the turbine’s compressor and combustion zones. The result is to increase the concentration of CO2 and thus improve the economics of carbon capture (chart below).

The data-file draws on costs data and operating parameters from several detailed technical papers, and model the economics. Even with EGR technology, it will still be challenging to decarbonize a conventional gas turbine for less than $100/ton (at which point blue hydrogen becomes competitive).

A short note is presented on the first tab, explaining the background, the theory and our main conclusions. You can stress-test the numbers and input assumptions in the model.

A new case for gas: what if renewables get overbuilt?

what if renewables get overbuilt

Overbuilding renewables may have unintended consequences, making power grids more expensive and less reliable. Hence more businesses may choose to generate their own power behind the meter, installing combined heat and power systems fueled by natural gas. Modelled IRRs already reach 20-30%. Capturing waste heat also boosts efficiency to 70-80%, which can be 2x higher than grid power, lowering total CO2 by 6-30%. This 17-page note outlines the opportunity and who might benefit.

Backstopping renewables: cold storage beats battery storage?

Phase change materials for backstopping renewables

Phase change materials could be a game-changer for energy storage. They absorb (and release) coldness when they freeze (and melt). They can earn double digit IRRs unlocking c20% efficiency gains in freezers and refrigerators, which make up 9% of US electricity. This is superior to batteries which add costs and incur 8-30% efficiency losses. We review 5,800 patents and identify early-stage companies geared to the theme in our new 14-page note.

The Top Technologies in Energy

Top Technologies for Energy Transition

The top technologies for energy transition are aggregated in this data-file, scoring their economics, technical readiness, and decarbonization potential, as assessed apples-to-apples across 1,000 pieces of research in Thunder Said Energy energy transition research.

Specifically, for each technology, we have summarized the opportunity in two-lines. Then we score its economic impact, its technical maturity (TRL), and the depth of our work on the topic to-date.

The output is a ranking of the top technologies in the energy transition, by category; and a “cost curve” for the total costs to decarbonize global energy.

Specifically, the world’s energy system will rise from 70,000 TWH pa of useful energy in 2021 to well over 100,000 TWH of useful energy by 2050. All else equal, this would increase global CO2e emissions from 50GTpa to 80GTpa. But the opportunities in this data-file can decarbonise the global energy system almost 3x over by 2050.

Our roadmap to net zero picks as many bars as possible from the left-hand size of the energy transition cost curve, to achieve the most decarbonization for the lowest cost. The most economical roadmap has an average abatement cost of $40/ton. The contribution of each technology, and energy transition cost of each technology are modelled out in the back-up tabs.

A breakdown of the top technologies for energy transition. We see around 20% of all decarbonization coming from renewables (wind, solar, next-generation nuclear), efficiency technologies that do ‘more with less’ (electric vehicles, electrification, power-electronics, advanced materials, advanced manufacturing), switching coal to gas (50-60% lower CO2 per MWH), carbon capture and storage (CCS, blue hydrogen, CO2-EOR, CO2-to-materials) and nature based solutions to climate change (reforestation, conservation agriculture, blue carbon).

A long list of over 1,000 companies that have crossed our screens is also aggregated in the final tab of the data-file, as a reference, for decision-makers looking for a list of companies in the energy transition.

Copyright: Thunder Said Energy, 2019-2023.