Methanol: the next hydrogen?

Methanol is becoming more exciting than hydrogen as a clean fuel to help decarbonize transport. Specifically, blue methanol and bio-methanol are 65-75% less CO2-intensive than oil products, while they can already earn 10% IRRs at c$3/gallon-equivalent prices. Unlike hydrogen, it is simple to transport and integrate methanol with pre-existing vehicles. Hence this 21-page note outlines the opportunity.

Costs of climate change: a paradox?

The unmitigated costs of climate change will likely reach $1.5trn per annum after 2050, exerting an enormous toll on the world. However, the costs of the energy transition will exceed $3trn per annum. Unfortunately, this might seem to undermine the economic justification for combatting climate change. Does this matter and what does it mean?

Enhanced geothermal: what challenges?

This data-file tabulates the greatest challenges and focus areas for harnessing deep geothermal energy, based on reviewing 30 recent patents from 20 companies in the space.

The economic opportunity is exciting, with levelized costs of 10c/kWh in areas of ordinary geothermal gradients. Strong progress is also outlined in our deep-dive research note into the topic.

The patents confirm that the largest challenges are drilling long multi-lateral wells, which contact sufficient reservoir volumes to transfer heat from the subsurface into the working fluids, without depleting the geothermal resource.

Recent advances from the unconventional oil and gas industry are likely to be a crucial enabler from deep geothermal, based on the comments made in the patents.

Ten Themes for Energy in 2021?

This 25-page note outlines our top ten themes for 2021. We fear Energy Transition will continue building into an investment bubble. But also appearing on the horizon this year are three triggers to burst the bubble. We continue to prefer non-obvious opportunities in the transition and companies with leading technologies.

Decarbonizing global energy: the route to net zero?

This 26-page report aggregates all of our work in 2020 and presents the best route to reach ‘net zero’ CO2. The global energy system can be fully decarbonized by 2050, for an average CO2 cost of $42/ton. Remarkably, this is almost half the cost foreseen one year ago. 85Mbpd of oil and 375TCF pa of gas are still required in this 2050 energy system, together with efficiency technologies, carbon capture and offsets.

How much land is available for reforestation?

2.3bn hectares of land have been deforested, releasing c25% of all anthropogenic emissions. This 19-page note reviews the technical literature, gathers detailed data and concludes 1.2bn hectares can be reforested. Consequently, there is room for 85Mbpd of oil and 400TCF of gas in a decarbonized energy system, while half of all ‘new energies’ technologies are overly expensive and may not be needed in the transition.

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.

Electric vehicle charging: what challenges?

This data-file tabulates the greatest challenges for charging electric vehicles, based on the recent patent literature, looking across fifty patents filed by leading companies.

Our top three conclusions are that EV charging will require complex algorithms to ensure grid stability, creating an opportunity for big data companies; vehicle-manufacturers are concerned about balancing the convenience of EV charging with the investment costs of charging networks; while interestingly, increasing speed of charging is not a primary focus.

Our conclusions are typed up in the data-file, plus the full back-up of patents from large OEMs, EV-charging specialists, capital goods companies that make components and tech giants, working on optimization algorithms.

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.

Shale productivity: snakes and ladders?

Unprecedented high-grading is now occurring in the US shale industry, amidst challenging industry conditions. This means 2020-21 production surprising to the upside, and we raise our forecasts +0.7 and +0.9Mbpd respectively. Conversely, when shale activity recovers, productivity could disappoint, and we lower our 2022+ forecasts by 0.2-0.9 Mbpd. This 7-page note explores the causes and consequences of this whipsaw effect.