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-2021, it contains 220 differentiated views on 120 public companies.

Power electronics: problems and solutions?

The purpose of this data-file is to summarize the main problems and solutions in power-electronics, and how they will evolve amidst the ramp-up of renewables and electrification.

We describe c15 problems that are incurred by power consumers, all of which will be amplified amidst the build-out of renewables, some more than others.

In turn, this means we expect c$100bn pa growth in the market for compensatory power-electronics solutions by 2030 (this number excludes grid-scale batteries). Different devices, examples, market sizes and costs are summarized in the equipment tab.

Back-up data follows from technical papers in the final tab.

Grid volatility: are batteries finally in the money?

UK power price volatility has exploded in 2021. The average daily range has risen 4x from 2019-20, to 35c/kWh in 3Q21. At this level, grid-scale batteries are strongly ‘in the money’. So will the high volatility persist? This is the question in today’s 6-page note. We attribute two-thirds of the volatility gains to gas shortages and high absolute power prices. However, wind generation is at three-year lows.

Synchronous condensers: the economics?

This data-file captures the costs and the economics of installing a synchronous condenser, downstream of a renewable power facility, in order to emulate some of the inertia, reactive power and short circuit power from more traditional, conventional generators.

Based on ten recent examples, which are reviewed in the ‘costs’ tab’, we find that an additional 1.0 – 2.5 c/kWh of costs may be added to the power supplies flowing out of the SC. Although the numbers and relative sizings are debatable.

Notes from technical papers are included in a backup tab. Leading providers of synchronous condensers include the usual suspects of capital goods companies, such as ABB, GE, Siemens, Eaton.

Monolith: turquoise hydrogen breakthrough?

Monolith claims it is the “only producer of cost effective commercially viable clean hydrogen today” as it has developed a proprietary technology for methane pyrolysis using 100% renewable electricity, producing clean hydrogen and carbon black. We like this turquoise hydrogen theme and its potentially strong economics.

The company is based in Lincoln, Nebraska and has a $100M demonstration facility at Hallam, Nebraska, constructed in 2016-18, following a pilot was build in California in 2013-15. The next step is a $1bn expansion of its Olive Creek facility and a tender of 2M MWh pa of renewable electricity (or equivalent RECs) to energize the plant.

Overall this was not one of our most successful patent screens, as we found many of the patents to be disjunctive, thus it was hard to de-risk the technology. Some specific question marks are noted in the data-file.

 

Power grids: tenet?

How do power grids work? How will they be re-shaped by renewables? This 20-page note outlines the underpinnings of electricity markets, from theoretical physics through to looming shortages of ‘inertia’ and ‘reactive power’. Some commentators may not have fully grasped the challenges of back-stopping renewables and opportunities thus created.

Inter-correlations between solar assets?

This data-file aggregates granular data from seven solar assets around Western Europe (Netherlands, Germany, Belgium, Switzerland), to understand their volatility and inter-correlation, over a sample week in August-2021.

Across the entire week, the average solar plant generated at 12% of its nominal capacity, the 90th percentile was 40% and the maximum was 75%; which may suggest that the panels have been oversized relative to inverters or MPPT is not fully optimized.

Volatility and inter-correlations are quantified in the data-file, but are generally high. For example, over >500km distances, different solar generators’ 15-min by 15-min output is 60-80% correlated, which is even greater than for offshore wind (data here).

These issues suggest solar can provide a meaningful portion of decarbonizing grids, but surpassing 20% requires back-ups.

Shoals: solar-electronic breakthrough?

Shoals Technologies Group manufactures electrical balance of system solutions for solar energy projects, focused on promoting reliability, safety and ease of installation. The company went public in January-2021, raising $1.9bn in an IPO, which was upsized due to strong demand and valued the overall company above c$5bn.

Our patent review finds a technology moat to help improve solar competitiveness. This includes plug-and-play electrical   connections, guards to secure those connections, accomodating one fuse and more electronics per panel  rather than shared across many panels, and discconnect mechanisms that facilitate maintenance. Full details are in the data-file.

Integrated energy: a new model?

This 14-page note lays out a new model to supply fully carbon-neutral energy to a cluster of commercial and industrial consumers, via an integrated package of renewables, low-carbon gas back-ups and nature based carbon removals. This is remarkable for three reasons: low cost, high stability, and full technical readiness. The prize may be very large.

Integrated gas and renewable power?

This data-file considers how to supply 100MWe and 1,000GWH pa of energy to a mid-sized consumer: reliably, at a low-cost and with zero net CO2 emissions. We think this is possible at a delivered power price below 10c/kWh, which is highly competitive.

The model captures the costs, gross CO2 intensity and nature-based offset requirements from a mixture of wind, solar, CHPs and gas turbines.

Following this model could create great potential for an integrated gas and power company, while supplying a complete, zero-carbon energy solution to consumers in the energy transition.