The Top Public Companies for an Energy Transition

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 February-2021, it contains 200 differentiated views on 100 public companies.

Energy transition technologies: the pace of progress?

This data-file aggregates 20 different TSE patent screens, to assess the pace of progress in different energy technologies. Our short, 3-page summary note on the findings is linked here.

Lithium batteries are most actively researched, with 8,300 patents filed in 2019 ex-China. Autonomous vehicles and additive manufacturing technologies are accelerating fastest, with 10-year patent filing CAGRs of 22% and 53% respectively.

Wind and solar remain heavily researched, but the technologies are maturing, with patent activity -36% and -76% from peak, respectively. The steepest deceleration of interest has been in fuel cells and biofuels, declining at -10% pa and -7% since 2009.

It remains interesting to compare the pace of progress within sub-industries; for example, more supercapacitor patents were filed in 2019 than nuclear patents; while hydraulic fracturing patents remain the most intense focus area within conventional oil and gas.

Uranium mining: the economics?

This simple model aims to disaggregate the marginal costs of a new uranium mine, as a function of uranium prices, ore grade, capex and opex. Our base case is a marginal cost of $60/lb for a 10% IRR. However, lower ore grades can easily require $90/lb uranium prices in order to justify investment. Cash costs range from $7-40/lb.

Onshore wind: the economics?

This data-file models the costs and the economics of constructing a new onshore wind power project, based on technical papers and a detailed line-by-line capex cost build-up.

A typical onshore wind project requires a 6.75c/kWh power price and a $50/ton CO2 price in order to generate an unlevered IRR of 10%. However, investors may be inclined to view 5-6% IRRs, lowering the incentive price to 5-6c/kWh even without a carbon price.

The main cost is capex, which varies between $1,000-3,000/kW (below). The data-file  gives a detailed  breakdown, across materials, fabrication, transport, installation and linking to our other models. Larger turbines will reduce future costs, as stress-tested in the cost tab.

Shifting demand: can renewables reach 50% of grids?

25% of the power grid could realistically become ‘flexible’, shifting its demand across days, even weeks. This is the lowest cost and most thermodynamically efficient route to fit more wind and solar into power grids. We are upgrading our renewables ceilings from 40% to 50%. This 22-page note outlines the growing opportunity in demand shifting.

Wind and solar capacity additions?

This model calculates how large global wind and solar additions would need to be, in GW per year, to deliver our roadmap to ‘net zero’.

Annual capacity additions need to treble, we find. This is an enormous scale-up, which likely also entails a trebling of global wind and solar spending.

The model is disaggregated region-by-region, and dovetails with our other models of decarbonizing the US, China, and broader gas-and-power use in Europe. 85% of the capacity growth must also take place outside of Europe and the US.

Please download the model in order to stress test the rate of capacity additions by region, renewables’ decline rates, asset lives and the grid shares.

Hydro electric power: the economics?

This data-file models the costs and the economics for constructing a new hydro electric power project, based on technical papers and past projects around the industry. CO2 intensity is effectively nil, even after reflecting the embedded energy of concrete, steel and construction.

A typical hydro project requires a 10c/kWh power price and a $50/ton CO2 price in order to generate an unlevered IRR of 10%. However, investors may be inclined to accept 5-6% IRRs as appropriate for infrastructure assets, lowering the incentive price to 6c/kWh. Cash opex is 2c/kWh.

The main cost is capex, which varies between $500 and $8,000/kW. Our own capex estimates are broken down below.  You can stress tests all the input assumptions in the full data-file.

 

Prevailing wind: new opportunities in grid volatility?

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.

Geothermal energy: what future in the transition?

Drilling wells and lifting fluids to the surface are core skills in the oil and gas industry. Hence could geothermal be a natural fit in the energy transition? This 17-page note finds next-generation geothermal economics can be very competitive, both for power and heat. Pilot projects are accelerating and new companies are forming. But the greatest challenge is execution, which may give a natural advantage to incumbent oil and gas companies.

Geothermal power: the economics?

This data-file captures the economics of geothermal heat and power, built up as a function of drilling costs, pumping costs and power-cycle costs.

Our base case numbers are calculated both for geothermal hotspots and for the exciting, next-generation technology of deep geothermal power. You can stress test input assumptions in cells H6:H25 of each model.

Further industry data follow in the subsequent half-dozen tabs, including a breakdown of capacity by country and by supplier, patent filings, leading companies and our notes from technical papers.