Biomass power and BECCS: the economics?

This data-file captures the economics of producing wood pellets, generating electricity from wood pellets or other biomass, and building a further carbon capture and storage facility to yield ‘carbon negative power’.

The data-file is substantiated by detailed industry on solid biomass fuels, historical capex costs from prior projects and detailed notes from half-a-dozen technical papers.

Data are also aggregated on the generation and efficiency of c340 woody-biomass power plants constructed to-date in the United States.

Solar power: what challenges?

Solar panel costs have been deflating at a rate of c20% per annum as the industry scales up into manufacturing mode. The IEA recently stated solar could thus provide the “cheapest electricity in history”.

What next?  To answer this question, we reviewed 70 patents filed by leading solar manufacturers in 2020, in order to see what challenges they are aiming to resolve. We expect deflation to continue apace, while panels will also gain greater efficiency and longevity.

This data-file explains the conclusions, summarizing the findings  from the patents and giving specific examples of gains in the offing.

Specific companies’ focuses can also be seen from the patents. Covered companies include Canadian Solar, Hanergy, Jinko, LG, Miasole, Panasonic, SunPower et  al.

Electrolysers: how much deflation ahead for hydrogen?

For green hydrogen to become competitive, total electrolyser costs must deflate by over 75% from current levels around $1,000/kW. This 14-page note breaks down the numbers and the challenges, based on patents and technical papers. We argue 15-25% total cost deflation may be more realistic if manufacturers also strive to make a margin in the future.

High voltage direct current power transmission: the economics?

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 (HVDC).

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.

Our base case estimate is that a 10c/kWh transportation spread is required to earn a 10% levered IRR on 1,000-mile cable. Please download the data-file to stress test power costs, power prices,  capex, opex, line losses, leverage levels and fiscal impacts.

Tree database: forests to offset CO2?

Nature-based solutions are among the most effective ways to abate CO2. Forest offsets will cost $2-50/ton, decarboning liquid fuels for <$0.5/gallon and natural gas for <$1/mcf (chart below).

The data-file tabulates hundreds of data-points from technical papers and industry reports on different tree and grass types. It covers their growing conditions, survival rates, lifespans, rates of CO2 absorption (per tree and per acre) and their water requirements (examples below).

 

Floating offshore wind: what challenges?

This data-file ranks the greatest challenges for the floating offshore wind industry, by reviewing 50 recent patents, filed by leading companies.

These challenges are relatively immutable, and will likely double capex and levelized costs, compared with traditional offshore wind.

The potential for floating offshore wind is also location dependent, with inherent advantages, in some geographies over others.

These conclusions are spelled out in the data-file, in our short written note here, and fully backstopped in this data-file with details on all fifty patents.

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 used the data-file to select and allocate 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.