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.

Carbon offsets: costs and leading companies?

This data-file tabulates the costs of carbon offsets being offered to consumers and commercial customers by c30 companies. Prices are surprisingly low, ranging from $4-40/ton of CO2.

Which projects are most economical? Costs are lowest at forestry projects, particularly at companies where you pay “per tree” rather than “per ton” of CO2. They are also lower at non-profits (which also means contributions are tax-deductible). Finally, they are lowest at companies undertaking projects directly, rather than as “middlemen” (charts below).

Are they CO2 offsets real? The also file contains detailed notes on each company, to assess their credentials. Moreover, it tabulates 1,600 carbon offset projects which are assured by agencies such as the ‘Verified Carbon Standard’, Gold Standard and Green-E, for a broader perspective.

Offset your own CO2? We have recently used the data-file to select and allocate our carbon offsetting dollars to Eden Reforestation, One Tree Planted, The Gold Standard and Sea Trees. We are happy to discuss CO2 offsetting with TSE clients and those using the data-file.

Wind power: decline rates?

This data-file tabulates the ‘decline rates’ of 1,215 US wind power plants, which have reported data to the US EIA, using in-house web-scraping and aggregation software.

Across the entire data-set, we find wind farms take two years to ramp up. Generation peaks in year 3. It declines at 1.0% per year up to year ten (when production tax credits tend to roll off), then decline at 3.5% from year 10 to 18.

However, the data are highly variable. Hence this data-file gives full granularity on the underlying data-points, so you can stress test assumptions. We also discuss variables that may lower future decline rates.

The ‘Conclusions’ tab explores the consequences. US wind generation profiles are not dissimilar from well-managed oil and gas fields; some projects may suffer 2% lower IRRs versus forecasts if they have not factored in declines; and declines will also become more material over time, slowing the ascent of wind’s share in the power mix (chart below).

The full data-file can be downloaded below. Alternatively, a PDF of the conclusions is available here for clients with our ‘written insights‘ subscription.

Solar power: decline rates?

This data-file tabulates the ‘decline rates’ of 3,200 US solar power plants, which have reported data to the US EIA, using in-house web-scraping and aggregation software.

Across the entire data-set, we find solar assets take one year to ramp up. Generation peaks in year 2. It then declines smoothly at 2.5% per year.

The ‘Conclusions’ tab explores the consequences. US solar generation profiles are not dissimilar from well-managed oil and gas fields; some projects may suffer 4% lower IRRs versus forecasts if they have not factored in declines; and declines will also become more material over time, slowing the ascent of solar’s share in the power mix (chart below).

Global Energy Markets: 1750 to 2100

This model breaks down 2050 and 2100’s global energy market, based on a dozen core input assumptions.

You can ‘flex’ these assumptions, to see how it will affect future oil, coal and gas demand, as well as global carbon emissions.

Annual data are provided back to 1750 to contextualize the energy transition relative to prior transitions in history (chart below).

We are positive on renewables, but fossil fuels retain a central role, particularly natural gas, which could ‘treble’ in our base case.

A fully decarbonised energy market is possible by 2050, achieved via game-changing technologies that feature in our research.

Backstopping renewables: cold storage beats battery storage?

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.

Is there enough land for an energy transition?

This data-file compares the land space required by different energy transition technologies, in tons of CO2-equivalents abated per acre per year. The data are sourced from technical papers and our broader work.

Costs are 65% correlated with land efficiency, in turn, because both metrics tends correlate with capital intensity. Both metrics are compared in the chart above (note the axes are logarithmic).

The data show an economic decarbonization is possible in a typical developed world country but it could use up 20-50% of available land. Energy transition may be more expensive in smaller countries with less land.

Covered technologies include biofuels, reforestation, restoring soil carbon, carbon capture and storage, onshore wind, offshore wind, solar, hydro power, direct air capture and nuclear.

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 October-2020, it contains 180 differentiated views on 90 public companies.

Ventures for an Energy Transition?

This database tabulates almost 300 venture investments made by 9 of the leading Oil Majors, as the energy industry advances and transitions.

The largest portion of activity is now aimed at incubating New Energy technologies (c50% of the investments), as might be expected. Conversely, when we first created the data-file, in early-2019, the lion’s share of historical investments were in upstream technologies (c40% of the total). The investments are also highly digital (c40% of the total).

Four Oil Majors are incubating capabilities in new energies, as the energy system evolves. We are impressed by the opportunities they have accessed. Venturing is likely the right model to create most value in this fast-evolving space.

The full database shows which topic areas are most actively targeted by the Majors’ venturing, broken down across 25 sub-categories, including by company. We also chart which companies have gained stakes in the most interesting start-ups.

Green hydrogen trucks: delivery costs?

We have modelled the full-cycle economics of a green hydrogen value chain to decarbonize trucks. In Europe, at $6/gallon diesel prices, hydrogen trucks will be 30% more expensive in the 2020s. They could be cost-competitive by the 2040s. But the numbers are generous and logistical challenges remain. Green hydrogen trucks will most likely find adoption in niche applications, competing with other technologies, rather than as a wholesale shift to a hydrogen economy.