Visual Source: Seaborg Technologies

Let’s discuss Nuclear in different ways than the present discussion has gone. Nuclear has been not given the debate it deserves. That needs changing in my view.

This is largely from the use of salt! Well, actually, small modular reactors offer a Nuclear future as part of our clean energy requirements.

I wrote a piece recently, “the Elephant that should be in the Energy Debate,” and it is largely because of the technology, safety and reality of what Nuclear offers in new approaches and designs that make it have a real place to be at the Energy Transition table.

Firstly what is a molten salt reactor (MSR)?

It is a class of nuclear fission reactors where the primary coolant and/or the fuel is a molten salt mixture. There are several different designs, all looking to bring small modular reactors (SMR) to market.

MSR has significant advantages over traditional nuclear reactors.

First, the MSR typically operates at or close to atmospheric pressure, rather than 75 to 150 times the atmospheric pressure used for LWRs, thereby reducing the containment structures’ needs and eliminating hydrogen as a source of explosion risk.

Equally, the MSR does not produce dangerous and radioactive fission gases under pressure; these are naturally absorbed into the molten salt. This smaller reactor and these differences provide a key benefit of removing the risks of contaminating large land areas.

The MSR can also operate at higher operating temperatures providing higher electricity-generation efficiency, allowing for a greater coupling benefit of having grid-storage facilities, potentially more economical hydrogen products, and some potential for process-heat opportunities.

So why are these not the future for any debate on Nuclear?

Let’s continue with the good news. The combination of offering a low-pressure system and a high boiling point greatly limits the chance of a containment explosion. The MSR doesn’t require massive cooling in dedicated water ponds or rivers; they can be placed anywhere and air-cooled.

Visual Source: Seaborg Technologies

If the core were to overheat, the biggest and best safety feature is that a gravity-enabled passive shutdown system would send the heated, radiated salt into an underground containment chamber or drain tanks by simply gravity and turning off the reactor.

These MSRs still face several challenges. Relevant design challenges include the corrosivity of hot salts and the changing chemical composition of the salt as it is transmuted by reactor radiation.

There are quite naturally different bodies of concern about Nuclear in general. Its need for the future is in new evolving modular solutions. There is a long list of advantages and disadvantages to working through, but I leave these out of this post.

There are different approaches to molten salt reactors, all being investigated or tested at present. I have used to illustrate MSRs the visuals supplied by Seaborg Technologies to provide a clearer example of Molten Salt Reactors; they offer one concept of a few.

Also, Thorium-based energy is being significantly invested in still not well tested and does have some scenario’s still to be worked through in design, process and final operation.

Fusion power is in the future, a future rapidly coming into view without a doubt. It does have as much potential (or even more) to halt carbon emissions as other solutions more readily discussed. But as climate issues increase, we need to consider MSR and ones that seem to be ahead at present, the liquid fluoride thorium reactors (LFTRs)

I read up on Seaborg Technologies based in Denmark that their CMSR (compact molten salt reactor) is in design and further hypothesis validation. I have taken their excellent visuals to help describe and present Molten Salt reactors.

Without a doubt, Seaborg Technologies are motivated by the challenges of the need to address eliminating carbon dioxide and adding electricity through this solution.

Visual Source: Seaborg Technologies

The CMSR works with both fossil fuels and renewable energy sources. In either case, it generates a large amount of low-carbon energy. Another attractive feature is a novel liquid salt used as a neutron moderator: it acts as a catalyst to improve the efficiency of the fission chain reaction, reducing the size and cost of generating energy. Moreover, this moderator is not degraded by neutron irradiation – a challenge that has stalled previous attempts at commercializing the technology.

Liquid salt can be reprocessed, separating uranium and plutonium from fuel for reuse to produce waste that only needs 300 years of storage in nuclear cemeteries. So far, long-lived nuclear waste may need up to 300,000 years of storage.

The University of Idaho is looking for Nuclear Batteries.

Also, the US University of Idaho has announced they have verified a new process to speed up the development of the world’s first Molten Salt Nuclear Battery (MsNB). They claim this is a monumental step in the molten salt reactor design process. They envisage military bases, hospitals, and communities can gain reliable, secure, continuous energy from an MsNB as a small, distributed energy source, bringing autonomy to the users from reliance on more decentralised grids and energy supply.

The MsNB testing device uses ohmic heating to heat liquid via an electric current evenly. It acts as a reactor surrogate, mimicking the internal heat generation within a reactor through fission or splitting an atom’s nucleus. In the MsNB, the heat released during the ohmic heating testing process causes the molten salt fuel within the battery to rise in a central cylinder. Once at the top, the fuel moves to a heat exchanger, where it is cooled and falls back down the space between the inner and outer cylinders. This natural circulation eliminates the need for valves and pumps, improving the reliability and simplicity of the reactor design.

Presently, the University of Idaho is looking for a grant to validate and compete for an MsNB design up to manufacturing by a partner, Premier Technology.

Natrium Reactors, Bill Gates and Warren Buffett

In my recent post, “The Elephant that should be in more in the Energy Debate- Nuclear.”

I picked up on a recent announcement that Warren Buffett and Bill Gates are coming together to build a nuclear Natrium reactor in Wyoming at a decommissioned coal plant. This is an advanced nuclear reactor that is suggested as safer, performs better and costs less than the traditional plants.

The project is based around a 345 MW sodium-cooled fast reactor with a molten salt-based energy storage system that will have storage technology to deliver a system’s output to 500 MW of power for more than five-and-a-half hours when needed, which is equivalent to the energy required to power around 400,000 homes and will be able to integrate with renewable resources and could lead to faster, more cost-effective decarbonization of electricity generation.

What we see is that Small scale nuclear reactors are starting to be developed around the world.

We know Nuclear in its current power plant form is continuing to suffer heavy losses as renewables come online or are mostly scheduled to close. Globally, nuclear energy supplies 11% of electricity; it had come down from 17.6% back in 1996.

The cost of the building design, safety and maintenance of these traditionally designed Nuclear reactors are expensive and not flexible in their operation or management. If we move towards smaller modular, safer designs, Nuclear has the chance to become more competitive and attractive.

Are small modular reactors a new way forward for nuclear power?

There is a growing argument besides settling on a design for MSR they can be mass-manufactured at specialised facilities, transported more easily, and installed in remote locations where conventional power is not so feasible. They are compact and are a sound distributed energy solution. They cost significantly less than traditional large-scale reactors due to containment, leakage and environmental concerns. This becomes a way forward for many developing countries in the world.

Image and Concepts from Seaborg Technologies

Systems in design are integral, meaning the fuel, steam, and generator will be in one vessel, and the core’s own heat can drive the coolant flow, eliminating many pumps and moving parts that can fail. Each reactor will be self-contained.

Rolls-Royce in the UK are in a consortium for their Small Modular Reactor (SMR), but this is around a decade away from concept to scale.

If MSR’s can show cost and safety concerns are being addressed and can settle on limited standardised designs, mass manufacturing can give scale and cost reductions. Perhaps no different than solar& wind rapidly reduced costs, and now hydrogen is chasing that route, can MSR join them?

What is known is some of the big players in energy have attempted SMR solutions, including Westinghouse, giving up in 2014, and then Babcock and Wilcox folded theirs in 2017. In Russia, state-funded MSR had construction costs run over estimates four times this small-scale nuclear pathway has had and is having obstacles to moving from a hypothesis to reality. ( sources BBC future articles)

I think we need to get used to Nuclear being in the Energy Mix

At present, I am left with a great question raised in an article I was reading for this post, “How many renewables does it take to replace a nuclear plant.”

Visual Source: Seaborg Technologies

I think we will see an innovative combination of an advanced sodium fast reactor with energy storage, sited on utility sites, disused land, and old coal mines to give power security and jobs.

These energy combinations can allow the reactor to operate at a high capacity while simultaneously capturing and storing electricity and plugging into support the increased use of hydrogen, working alongside renewables.

The future design of energy systems will be modular, not based on one fuel or power generation but 8utilizing multiple options to be optimal in energy delivery and best pricing, and solution mix to customers.

We do need all the carbon-free power we can lay our hands upon.

We need carbon-free power, true zero, not clean power credits or fossil fuel and CCUS capture, giving us in the future carbon headaches or nothing but wind farms and solar farms stretching out over land and sea.

We need as many options for viable, alternative clean fuel, and that seems to be including Nuclear in my mind, sitting alongside green Hydrogen from Electrolysis, as equally primary sources of our clean energy needs, competing with Renewables, the current green flavours of this decade.

One last visual supplied by Seaborg Technologies needs some time to study

Visual Source: Seaborg Technologies

The 2030 decade is going to be Nuclear and Hydrogen time

As we face Nuclear closures worldwide, we need to evaluate and hopefully achieve a next-generation Nuclear solution, which seems to be based on small modular reactors based on the Molten Salt design.

We are rapidly gaining a real understanding of the need for a phenomenal range of clean energy solutions to displace Gas, oil, and coal totally. In my opinion, we must include another clean energy source, Nuclear.

We need to rapidly find solutions to phase out old Nuclear Plants and not extend them even further. We need to determine a new Nuclear policy that establishes small modular reactor designs. The approach through the molten salt reactors shows real promise to accelerate as that safer Nuclear option.

It is interesting; in the past Salt was always prized as a commodity. Now it is part of a clean energy solution.

*Sources for initial descriptions: Wikipedia/ Molten salt reactors and for Thorium-based energy

*Thanks to Seaborg Technologies, they got me really interested and excited about the landscape of tomorrow and how Nuclear has a real fit as and when the present technologies become commercialised in or by the 2030s.

*If there are any errors in descriptions or understanding, they are mine. In this research and investigation, I do not claim a depth of knowledge. This is only a “snapshot” to raise awareness and interest.

The post Molten Salt Nuclear Reactors- so what’s there not to like? first appeared on Innovating the Energy Transition.

Explicit Milestones within this report are staggering in implications

The International Energy Agency (IEA) released its most comprehensive report “Net Zero by 2050: a roadmap for the Global Energy Sector” on 18th May 2021.

The roadmap outlined underscores how pivotal this current decade is to ever reach net-zero by mid-century. In my opinion, it is the next three to five years that will determine this. If we fail to drive down emissions into a really sharp decline through a global political will we are in serious trouble.

It is only through strong and credible energy policies and significant investment into clean energy solutions we will get onto any pathway. If we fail to recognize the overwhelming needs to change we can say goodbye to 2050 as a net-zero target, then that will have colossal economic and climatic consequences.

The report by IEA lays out a viable pathway to building a global energy sector with net-zero emissions in 2050, but as they state this is a (really) narrow window and requires an unprecedented transformation in how energy is produced, transmitted and consumed.

They suggest “to have a fighting chance” to limit the rise in global temperature to 1.5 °C,   requires nothing short of a total transformation of the energy systems.

Milestones that are defined, clear and time-related.

The report sets out clear milestones- more than 400 in total, spanning all sectors and technologies. for what is needed to happen and, more importantly, when, to transform the global economy from one dominated by fossil fuels into one powered predominantly by renewable energy, such as solar and wind.

This “viable” pathway requires vast amounts of investments, innovation, skilful policy design and implementation, technology deployment, infrastructure building, international cooperation at a scale not imagined or seen to date and major efforts across multiple areas associated with such an energy transformation.

The roadmap outlines over 200 plus pages within the report is global in scope.

It does not attempt to tackle country or regional designs, those each have specific circumstances, history and their specific stages of designing a roadmap that works for them to get towards this 2050 net-zero goal.

There are no one-size-fits-all, as each country is at different economic development in its challenges, energy dependencies and ability to undertake such a radical transition.

Where this report goes beyond what we have had in the past is its specific milestones (major ones shown here) that are dramatic and staggering in how necessary these are to offer a “viable” roadmap.

There are staggering changes ahead of us.

There is no scope for new fossil fuel developments anywhere in the world to get on the right and only trajectory of achieving the net-zero goal by 2050.  Again, no scope!! Just think, no scope and what that means in Asia, in China, India, Japan, Australia or in the USA, rich in coal, oil and gas.

The world has known for many years  (in the 1980s, at least) the need to address climate change. The ability to turn observation and scientific evidence into getting the global community deadly serious about eliminating carbon emissions is only just getting serious. The 2015 Paris Agreement offered the foundations of global consensus and still, we are not on that track firmly enough.

Can we in less than 5 to 10 years turn this into that decisive moment?

I have serious doubts, I mean serious ones, but we must try. The IEA modelling made some sweeping assumptions, courtesy of IEEFA:

The new IEA modelling assumes:

• Clean energy investment trebles to US$5 trillion p.a. by 2030, accelerating global economic growth in the process;
• Energy efficiency needs to deliver a 4% annual improvement globally by 2030;
• Global installs of variable renewable energy (VRE) need to quadruple from 2020 levels to 1,020 gigawatts (GW) annually through to 2030;
• EVs need to rise from 5% of global new car sales to 60% by 2030, with new internal combustion engine (ICE) car sales ceasing entirely by 2035;
• Global battery production for EVs needs to increase fortyfold to 6,600GWh annually;
• Global investment in grid transmission and distribution needs to treble to US$820bn annually; and
• Methane emissions globally from fossil fuel supplies must reduce by 75% by 2030, assisted by independent satellite tracking and incumbent players’ belated efforts as transparency increases.

Critically, the IEA has stopped buying the fossil fuel industry smokescreens of offsets and unfeasible technologies like carbon capture and storage (CCS) when talking about the global energy sector’s efforts over this coming decade, suggesting it will play only an immaterial role.

This acknowledgement of only factoring in commercially proven and likely technologies should clear up one of the major issues of placing investments behind unproven technology to deliver this decade.

Future technology, beyond 2030 becomes a different horizon.

Yet to get to that we need immense momentum in the next ten or so years that drive down emissions and stop fossil fuel investments.

Beyond 2030 new technology needs to be coming on stream for breakthroughs in what we have today in the areas of advanced batteries, hydrogen, bioenergy, CCUS air capture and storage and the IEA suggest RD&D investments need to treble to US$90bn annually to get these solutions future-ready.

The future of 2050 in this reports prediction

Two-thirds of total energy globally will come from renewable energy by 2050- that is wind, solar, hydro, bioenergy and geothermal. The one that needs really addressing in this decade is Nuclear as a viable option but that has “perception” and acceptance by not just climate activists but the populous at large. and that is not a very easy one but its solution might be vital to have within the new energy mix.

In the foreword to this report, Dr Fatih Birol, the Executive Director of the IEA he states:

“The world has a huge challenge ahead of it to move net-zero by 2050 from a narrow possibility to practical reality. Global carbon dioxide emissions are already rebounding sharply as economies recover from last year’s pandemic‐induced shock. It is past time for governments to act, and act decisively to accelerate the clean energy transformation”

The near-tern determines any hope for achieving the net-zero goals by 2050.

It is this near-term to even get onto a net-zero pathway it requires the immediate and massive deployment of all available clean and efficient energy technologies, combined with a major global push to accelerate innovation for the next round of technology breakthroughs.

Am I optimistic, does this roadmap give me encouragement?

This report on a roadmap towards Net-Zero by 2050, is a must-read by anyone who wants to begin to understand their future.

Does the scenario spelt out in clear requirements what is needed, yes but…….

The “but” is if we can’t achieve a significant new set of global agreements, pledges and commitments at the November COP26 meeting in Glasgow, UK then what is deemed as a narrow window will close and 2050 will be a nightmare of climatic consequences because of the lack of decisive action and agreements needed now.

Decisions need to be made as to the impact are “collective ones”. The stance is these have to be fair, equitable and inclusive and here is where the politics kick in. and our political leadership needs to step up.

As the IEEFA states in their view of this report “IEA’s roadmap shows the global energy landscape is set to change profoundly, and at an unprecedented pace, as world leaders – governments, GSFI and corporates move to align with net-zero emissions by 2050 and a 1.5°C limit.

We live in exciting times. Get ready for exponential change in the global energy landscape!”

We need to move beyond hope and talk, otherwise, we lose the 2050 goal and then what happens?

The post A decade pivotal to a clean energy future. first appeared on Innovating the Energy Transition.

Credit Muhammad Muzamil, Unsplash

As we look across innovation for our energy transition solutions, let’s think a little more about social innovation. What is energy poverty? Why is this important to turn our innovative abilities towards resolving?

Energy poverty has no universal definition. Each country is at different levels of understanding. Here in Europe, I read a white paper by Schneider Electric, released in 2018, entitled “Overcoming poverty in Europe.”

There is no official definition of “energy poverty”, but to start somewhere, it can be described as the struggle to afford the ever-increasing cost of heating or lighting in homes or being able to cook food or heat water as a result of low income or bills that are too high. Energy poverty leads to suffering from the cold in winter and from the heat in summer.

This white paper suggests 40 plus million Europeans cannot adequately heat their homes and or in arrears on their energy bills. Over 16% of European households have abnormally high energy expenditure compared to income, and the overall numbers of Europeans there is 11% suffer from energy poverty.

It is estimated that between 50 to 125 million Europeans are affected, especially the elderly, single-parent families, unemployed or low-income households, and disabled people with chronic sickness.

These are shocking statistics just for Europe alone.

What are the same numbers in the USA or across the world in developing countries where so many do not have access to electricity and rely on wood or charcoal to cook or even heat their homes?

Thinking differently

Innovation is about change; it improves what we have or where we are, and what we face. It is always easy to think of energy improvements, technology acquisition, but what about those that fall out of the net?

Arguably you can raise the minimum wage level, lift income, and contain energy costs. But do these really get into the granularity of the solution needed to address energy poverty?

Where innovation can really kick in is resolving household energy efficiency. We all know of homes with leaking roofs, damp walls, floor or foundations or rot in window frames or infestation causing real deterioration of health, the environment, and conditions that so many people are facing.

What can be done in finding inventive solutions that can make a real difference? Not providing grants but linking improvement in homes with energy incentives. As so many of these homes are deemed “wasteful of energy, how can we change the low energy rating performance into a positive one in energy measurements?

Of course, energy cannot be solved by technology alone.

We need to think differently. Social innovation looks for appreciating and finding a deeper, shared and common understanding of how “others” live is realistically in this connected world, a problem we all need to address in imaginative new ways.

We need to think of society’s social fabric, apply social innovation, and find technology and business-related ideas that bring those suffering from energy poverty into our collective ecosystems. This can be through combining technology concepts addressing these specific energy poverty issues, supporting solutions in multiple ways, finding imaginative, innovative solutions, and bringing in philanthropy that is not just giving away but seeing “greater” return, lifting people out of this energy poverty,

The combination of health improvement by raising the conditions people find themselves makes for a more productive environment. The cost of mental disorders, poor health, stress, anxiety, and depression eventually cost society.

Social devaluation and low self-esteem ways down not just the person caught in this but the rising costs and burdens for the state, the local community, and public services. Imagine the cost of healthcare as a direct consequence of energy poverty.

What If?

What if we could find new innovative initiatives that create jobs, engage communities, and find new, exciting and pioneering business models that become thriving in micro-generating income, utilization and different payment models, based not just on money but a level of barter?

We can, of course, offer those “sweeping” regulation solutions that somehow lift some but seem not to get to the many that the funding was originally designed to help. We need to be pro-active, not reactive in what we do.

“After the event has occurred” is perhaps good to justify “payback”, but it is not what and where we should go, we need to find self-lifting solutions, self-organizing but within structures that reduce the cost of thousands of similar start-ups.

We need innovative solutions because they are universal and can be ramped up, applied, and offered improved solutions.

So, as we think about more innovation in the energy system, let’s not forget those in energy poverty and where communities, policies and energy providers can find imaginative solutions that stop the burden of debt recovery, (ever-rising) social costs and fragmented approaches.

The post Mobilizing Innovation around Energy Poverty first appeared on Innovating the Energy Transition.

With so much change in fuel sources, the power generation sector has some significant challenges to tackle

The pressure to reduce the concentration of Co2 in the atmosphere is driving a significant change in power generation management.

The combined forces of a growing source of cheaper fuel generation from renewables (solar and wind), the continuing high levels of global Co2 attributed to fossil fuel combustion above 40% of all global emissions need further change.  Along with the continued, increasing demand for electricity as heat sources in buildings or factories are being replaced from fossil burning to electricity-driven heat pumps, and other equipment for greater efficiency, the power generation industry is arguable undergoing a sea-change on the creation and dispatching of energy.

Emission reductions are needed across all sectors.

It will be a ‘combination effect’ of coal-to-gas switching, deployment of new generation gas-fired power plants designed for hydrogen within the fuel mix and plenty of opportunities for upgrades to existing gas-fired plants.

The impact of generation through wind and solar is pointing to a future of electric or clean energy. There are also pushes for reducing power sector emissions by upgrading the transmission grids, building in storage and looking for more at reducing individual electricity consumption by for more demand-side energy management.

Demand-side energy sometimes called the first fuel or the fuel you don’t need to use, is looked at in terms of electrical intensity through more efficient methods and solutions. As appliances, LED lighting and energy-conserving measures are deployed close to or at the final consumption points of buildings or final production plants.

The proportion of electricity in final energy dramatically shifts from 19% to a technically maximum 65% of our needs. This includes the adoption of heat pumps in buildings. Electric vehicles become the vehicle of choice, and induction stoves replace many of the unhealthy cooking methods we have today (coal, wood, charcoal etc.).

The further potential for electrification, 35% of final energy, depends on breakthrough innovation in processes and fuel conversions to generate higher heat. These include Shipping, Aviation and certain high intense heat industry processes of Chemicals, Cement, Iron & Steel.

With transport having Co2 emissions running at 25%, Buildings 9% and Industry at 26%, the source of energy, its ability to perform and what it entails in changes is a massive set of individual challenges.

Today all of the Power Generation providers are looking hard at adjusting their fuel sources to accommodate (rapidly) increasing renewable alternatives. Still, the vast majority of invested assets in fossil fuel generation need to be managed as a bridge into the future. Natural Gas will be needed for the next thirty to forty years or even longer.

To modify existing plants or determine future power generation purchases, the three key points driving the thinking are 1) increase operational efficiency, 2) improve ramp rate and 3) improve reliability.

Then you have a wish list of rather objectives that need to be worked upon with OEM providers. These include adjustments and wishes into 4) improved availability, 5) increased power output on demand, 6) extend plant lifespan, and 7)improve fuel flexibility, interchanging fuels.

There is also a constant need to keep extending and securing 8) health and safety, 9) reduce cyber vulnerabilities, 10) Reduce Co2 emissions through new technology applications (CCUS), 11) Reduce other harmful gases of methane, nitrous oxide and fluorinated gases and 12) through digitalization and other efficiency methods improve and maintain stability and maintenance.

All of these forming the wish list of power generation providers are tough, even in stable fuel markets. Still, with price/ demand volatility and the continued march of renewables and the demands for green energy, this is a very challenging set of times.

The positive point is the power industry has the technical capability and a complementary suite of solutions; if the long-term goal fixes on decarbonization with renewables and supported and complemented by natural gas power as its core strategy intent, it can manage the energy transition.

To shape power generation needs global and local understanding. Collaboration, building in increased flexibility, determining the tactics to meet the existing and future conditions and making the right power generation investments give optimization and adaptability in rapidly changing market conditions.

Conditions that are influenced by changing regulations, the balance between managing stable fuel supply and intermittency of renewables, the shift from public to private ownership, a need for cross border collaboration and exchanges and the climate pressures and commitment made locally and globally.

The post Planning concurrent shifts in Power Generation first appeared on Innovating the Energy Transition.

I recently viewed a Power Generation survey conducted a year or so back and found it valuable to motivate change. It was centred on the Middle East Power Generation sector and conducted by Siemens to help them understand future power generation’s underlying trends.

This Siemens survey had as the main question to the survey: “Which trends do you think are currently having the biggest impact on the power generation sector in your region“.

Now in reading this, we have to recognize this is the Middle East with an abundance of oil and gas, but are the trends similar for other regions of the world? The responses I would suggest are certainly reflecting a global movement; the ranking orders might vary. They bring out the opportunities and challenges all power generation is going through presently, I would think.

So in the Middle East, the top three trends that were having the biggest impact were felt to be:

1. The power /gas market liberalization
2. Changing customer expectations
3. Environmental regulation and New emission standards

Then the next three impactful trends

• Decentralization of power generation systems
• Demand growth and urbanization
• Privatization of generation and distribution assets

Followed by these shifts taking place

• The lower range of oil price
• Growth in renewable power generation
• Digitalization of process and operations
• Emerging technology disruption (i.e. battery storage)

Other observations from this report

One area is the increasing priority of digitalization, looking to overcome or bridge the trend impacts. This will come in the form of 1) improving customer data collection and analysis, 2) process automation, 3) virtual power plant (VPP) for management of distributed energy sources, 4) modelling digital asset performance management through greater connected IoT, digital twins etc.

As digitalization grows as part of the solutions, an increased focus on 1) Cybersecurity, 2) the increased use of Artificial intelligence, and 3) Blockchain are all prioritized.

I don’t see these challenges and trends as different for all those involved in power generation globally as they grapple with a changing generation mix but are nicely summarized.

What I draw from this ranking of trends let me offer the following views.

It is the external factors of liberalization, changing expectations and standards that drive the power generation’s underlying changes.

If changes were not “forced”, then we would have no or slow change. The shift in thinking about managing power generation is then triggered, of considering new business models or ways to undertake business, then recognising the impacts driving the actual changes (oil to renewables, digitalization and alternative technologies).

The report states that it seems to be one of optimism as privatization gathers. This gives opportunities to open up a more flexible business model as deregulation continues, and options to build a business become more driven by market and consumer trends.

There is a shift taking place from the combination of an increased pace of regulatory change, raising expectations and demands for flexibility in pricing and energy choices by the final consumer, energy security of supply, and growing competition are all raising the potential for different business models and generation options to explore.

The opening up of previously monopolistic positions does recognize competition will come in different forms. This incentivises the incumbent to focus more on cost and performance, driving down operating costs and finding new ways to manage changing market expectations.

Change can be very uncomfortable for the incumbent.

It is always interesting as “market forces” shift optimism—a feeling of a new lease of life changes to one where change takes on harder meaning.

Eventually, what emerges when you undertake to change is that it suddenly requires different perspectives at the different stages of any change based on how markets’ open up and eventually take hold.

I found it a good prompting report for reflecting on important trends in Power Generation.

The post Shaping the Power Generation sector first appeared on Innovating the Energy Transition.

Currently, renewables are the fastest-growing source of new power generation capacity and meet increased demand for electricity.

This renewable growth, expected to continue well into the future, is a combination of a growing public awareness of climate change issues, the realization that the continued scale of cost declines provides cheaper generation, continued advances in solar and wind technologies, and favourable policies have provided this dramatic shift.

I will be looking across power generation in a series of posts in the coming weeks- so taking this as my opening post.

Is this renewable shift enough on its own to manage the future Power Generation needs?

Wind and solar are still under ten per cent of global generation. However, in the last year of enforced shutdowns, imposed covid-related measures, renewables’ strength grew in its use as it offered increased flexibility to manage power generation differently.

Renewables are being constantly tested and validated in different energy demand needs. They are increasingly becoming a well-established part of the energy power generating mix. We must also remember the renewable that still contributes the most is hydropower, and we are only just at the beginning of tidal power. The whole renewable story for power generation is gathering increased momentum.

Predictions into the future between now and 2040 indicate a 3X increase in wind and a 6X increase in solar installed capacity. As we “tap into” water generation power, we combine the three natural available and abundant resources of the sun, wind and water we have available to us on this planet.

Dealing with well-entrenched power generators is going to be slow, painful, and needed.

Between the wind and solar, 75% of global net capacity additions up to 2040 will be in these renewables, so where does this leave those traditional power generators based on fossil fuel? The easy answer is still very well entrenched and in place.

Coal and current Gas plants have 30 to 40 years of productive life and can be extended and upgraded in selective core ways and replacement parts. The power generation mix of managing the existing and blending in the new will become critical to the energy transition’s success.

We will not see the dramatic shifts many expect away from fossil fuels but a planned transition over many years. Renewables will only be around par with coal and gas power even in 2040 unless the need to accelerate climate change determines more dramatic decarbonization changes. The change in power generation takes years and decades to translate and shift.

We are witnessing a shift from coal to gas in many regions. China and India’s position is radically different due to still relatively “young” investments in coal generating electricity in these countries. Coal still accounts for 40% of electricity generation and will remain that way for some decades to come.

Will decarbonization force the pace of change?

The acceleration of renewables alongside gas power can be the force to change the trajectory for climate change. The managing of gas power generation is going to be crucial in this decade to manage. Gas generation is continuing to advance the technologies for low or near zero-carbon power generation.

The future mix is dependent on the known variants we have today and often governed by the decisions made locally. These include resource availability, the current infrastructure, the existing policy positioning and the concerns over stability and security to meet the power demand are critical factors in the power generation mix.

In many ways, renewables, where an abundance of wind and sun can be providing electricity directly or can combine through water and hydrogen production, offers the very best solution path. Storage becomes critical to renewable advancement as well, but a different view expands upon at another time.

Using an alternative fuel can offset gas or compliment gas through both technologies to generate gas and hydrogen in the same gas turbine or blend them into a current or future pipeline.

Gas power is becoming positioned as a backbone where it co-exists alongside the continued advancement of wind and solar alternatives. As it dramatically reduces carbon emissions, this combination will be a significant pathway for advancing and accelerating coal assets’ retirement.

The continued abundance of affordable natural gas drives a coal-to-gas switch as this switch can reduce Co2 by half.

We do have the tools to do the job of shifting Power Generation.

The fuel mix needs to have far more climate change impact in existing and future decisions for future investment in coal, gas, or renewable options. No question, today the power industry does have at its disposal the tools to do the job of making an energy transition to radically reduce greenhouse gas emissions today and in the immediate future.

The question is not taking the technology solutions available simply on their own standalone merits but to build out complex power generation pathways that have this ‘pathway’ to decarbonize in each country and region at a growing scale that meets net-zero emissions by 2050.

The story we need to build in power generation is the scales, multiple choices, the breadth of options over transparent timelines and offer the technological depth of logic, economics and consideration to many local dependencies and national concern df energy security.

Use the Low or near zero-carbon Power Generation mix constantly in the future.

For decades to come, we will have power generation providers offer a suite of complementary solutions. The importance of balancing renewables based on the sun, wind and water, with gas-fired, nuclear, and smart grid and digital technologies is essential to get right.

We need clear decarbonization pathways, constant replacing the existing infrastructure and energy power generation systems. The replacements need to demonstrate the decarbonization way, consistently and aggressively reducing the dependence of high fossil fuel power generating capacity.

The need is to change today’s unacceptable greenhouse gas emissions levels dramatically. Still, realistically this will be a site, region and country step-by-step approach needing an organized and systematic process of designing the decarbonization pathway in each change.

We need to be alert and challenge vigorously when the desired power generation results planned to be installed only to extend existing power generation. Today we all very aware of all the known consequences. Regretfully they are far too often driven by political motivation or narrow considerations.

Be alert, defend and always have justified Power Generation that does not have renewables at its core is important.

Any future addition of new high GHG emissions by Power Generation needs questioning. Each plan needs to provide a decarbonization pathway in carbon capturing or the progressive moves towards renewable alternatives.

The power industry must frame the climate challenge and solution pathway into any future investment justification for any new, or renewing or even extend the life of existing fossil power generating assets. This pathway should be part of any investment decision.

There needs to be a clear recognition that any transition to a zero-carbon future needs “fuel solution” bridges. Investing in natural gas solutions over the next ten to twenty years is required to maintain and support the energy demands.

It is the technical solution and decarbonized pathway surrounding the investment that needs a deeper evaluation. Renewables will continue to attract far higher investments, but total generation capacity needs a mix of power generation solutions in the foreseeable future to ensure the stability of demand.

Decisions need to clarify and justify any investment position that does not provide carbon capture or zero-carbon power generation as central.

Any investments that fail on this transparency of not clarifying the decarbonization pathway must be publicly challenged and questioned by the investors. It is surely unacceptable with all the power generation options available when we are in this race to decarbonize.

It is down to the good judgement of making sound investment decisions based on decarbonizing what we have and finding balanced solutions that have an end goal of zero-carbon in the next thirty to forty years at the latest.

The post Carefully managing and resolving Power Generation first appeared on Innovating the Energy Transition.

Innovation is vital to the energy system’s integration and operation design, and we need to further recognize its crucial role. I believe we undertake a radical transformation in the way we supply, transform, and use energy. This requires a profound transformation in technologies, systems, and infrastructure.

Innovation is made up of many enabling technologies that support energy. This complexity requires innovative approaches to be built in highly systematic ways. Its ultimate result is to offer innovation that can continually look for re-imagining new market designs and business models to stimulate the changes and solutions for our future energy transformation.

Innovation needs to be transformational, offer greater value than what it is replacing, show the real advantage, set out to achieve competitive gains and offer a higher level of sustainability, value and impact.

We need an innovative mantra for energy.

Energy is a vital part of any country’s ability to be competitive. Today half the world’s capital is invested in energy and its related infrastructure as it is the backbone of any industrial and urbanization strategy.

Our need is to keep pushing for discoveries, for experimentation, for demonstrating. We must nurture innovation, and we must continuously look for ways to facilitate its pathway.

Our economic prosperity will be determined by transforming the energy sector, and it is through innovation we will achieve this. To avoid the predicted consequences of climate change, the global energy system must rapidly reduce its emissions.

The vast majority of global CO2 emissions come from the energy production sector, from our buildings or transportation systems. They all need a purposeful design of a new, cleaner energy system.

Innovation needs to be at the top of its game, to be accelerated and scaled.

The energy transition that the world is undertaking is one of the most critical areas where innovation needs to be at its absolute best, top of the game, to make the level of change necessary. We need to deploy every innovative tool to leverage ideas and discoveries and then accelerate the validation into a commercialization path sooner than later.

Innovation needs to get out of the laboratories, moved from theory to application, and off the desk of those executives who fail to see the urgency of change we need to achieve the energy transition.

Innovation has risk always associated with it, but that imperative to push the boundaries does need always to be constantly in our minds; global warming, pollution, and resource finite are our “burning platform.”

We need to ramp up our need for solutions to reduce greenhouse gases, redesign energy generation, transmission, and distribution and bring a balance back into our environments.

Pushing our present understanding, looking beyond the knowns

• Today the solutions are centred on decarbonization, applying digitalization, and switching to an energy system that is more decentralized than at present. It is finding imaginative, innovating solutions that become essential to achieve this climate change through the energy transition we are undertaking.
• Each organization within the energy transition looks at its own position and applies any changes to advance its competitive position. Quite rightly, but in focusing on one specific perspective, you can lose the bigger opportunity.
• We need to extend the reach of electricity; we need to focus on Hydrogen, validate carbon capture and storage (CCUS) as well as bioenergy and take them out of the lab, out of the realms of theory and validate the innovation concepts into scalable ones that deliver the gaps we have in our energy transition.
• We must find innovative solutions to reduce local air pollution, strengthen energy security, and develop a more significant energy system that is resilient to minimize the shutdowns and power outs. We need to find solutions to reliable and sustainable energy solutions that deal with heating, lighting, cooking, and cooling. Any change needs to find a way to create local economic value and jobs, as others in any change of this magnitude will be displaced.
• As we search for enabling technologies, we need to constantly facilitate the integration of renewable energy, accelerate storage, explore sector coupling, introduce new ways to operate within the electricity system, seek out new power generation, design the grids for increased flexibility and digitalize solutions to provide further services, tools and distributed generation deployment knowing how to diffuse innovation in these general five approaches becomes valuable.
• We need to continue to de-carbonize challenging industry sectors like steel, pharmaceuticals, chemicals, or our transportation systems if we wish to achieve any positive outlook of curbing carbon emissions and moving onto a pathway towards a zero-carbon future.

Innovation and showing progression give market confidence and encouragement that the innovation story is designed to adopt this innovation adoption approach.

Everything we are looking at in energy solutions faces a scalability challenge. 

It will be the ability to harness the existing with the new. This is the role of innovation to deliver the changes by being the bridge and being the catalyst of change with new technology and innovative solutions.

Innovation adoption in the technology lifecycle for Energy Translation

Technological innovation has a central role to play in the Energy Transition currently being undertaken throughout the world. The shifts need to take the different parts of the energy system through a lifecycle approach to any future energy system.

The six critical focal points of the energy transition.

The six main thrusts for technological innovation within the Energy Systems for today’s energy transition are:

1.  To accelerate the deployment of renewable energy technologies throughout the system.
2. There is a real need to find innovative solutions that focus on the end-user sectors of transport, industry, and buildings.
3. The technological and digital innovative solution needs to focus on the overall system design and the operation needs.
4. Innovation needs to increase electrification through emerging solutions on the grids’ digitalisation and provide grid-scale energy storage to resolve variable renewable power and build out further energy storage.
5. To push, nurture, and facilitate different energy sources to provide solutions to scale them up. These include solar power, geothermal, biopower, hydropower, onshore and offshore wind and finally tidal power.
6. Lastly, innovation needs to achieve an affordably decarbonize industrial transition.

Many new innovation solutions need to continually unlock the system’s flexibility.

Besides technological innovation, there is growing potential for redesigning operational systems through new services, tools, and distributed generation deployment. There are opportunities to find fresh market designs that have demand-response models central to then provide new, more tailored services and then the exciting potential of designing new business models that look to greater co-creation, more flexible power purchase agreements and bring the consumer into the system as contributors, aggregators and highly energy aware.

My focus is on innovating energy.

Innovation must be at the forefront of the energy change; otherwise, we will fail to deliver on the 2050 commitments and goals, and that will have consequences for our very existence as we know it.

Besides writing about innovation and energy on two dedicated blogs of innovating4energy.com and digital4energy, I recently launched a complimentary website of innovating4energy.website, one that is laying out my business positioning and offerings to help in accelerating innovation within the energy system. That “open for business” sign.

I set out to offer the external perspective to those busy inside organizations focusing on mapping out the future of energy and where they fit to support, compliment, and provide different value points to this thinking and eventual work. I see this as more advisory to complement their insights, more feeding into and complimenting their expertise with different points of value.

The post The crucial role Innovation must play in the Energy system first appeared on Innovating the Energy Transition.

Enter Hydrogen, reinvigorated and repurposed based on Renewables and new Technology designs

Presently Hydrogen is the only feasible route for at-scale decarbonization. It is a highly versatile, clean, and flexible energy vector. So many have evaluated the potential of hydrogen sector by sector that ramping up Hydrogen is needed to achieve any energy transition in an efficient and economically attractive way.

The problem today is that Hydrogen is simply not (yet) fit for large-scale deployment. The accepted wisdom is Hydrogen is a really good solution as a clean energy carrier, feedstock, and fuel. It can facilitate the extensive scale integration of renewables through conversion from H2O to pure Hydrogen (H2).

The potential to store Hydrogen as renewable Hydrogen can decarbonize the gas grid and can progressively convert incumbent natural gas and coal to this needed low-carbon through working in concert with gas reformation with carbon capture, utilization, and storage solutions (CCUS).

Hydrogen can tackle transport, heating, and cooling in the present energy-intensive industries and is relatively compatible with end-users and offering convenience in any replacement to the existing end-user application.

Hydrogen has been around for years.

It is part of the industrial process today. Arguable it is regarded as a mature business. Today there is a hydrogen market well established, currently estimated at US$135b per year, growing 6 to 8% annually. It is 95% based on fossil fuel extraction due to the intensity of heat required. It is used in the hard-to-abate sectors of chemical refining, iron and steel production, and high-temperature heat applications, including melting, gasifying, drying, and mobilizing a wide array of chemical reactions.

Natural gas is the primary source of hydrogen today, then coal, then oil. In processes through steam methane reforming, it is for producing ammonia and methanol. It is within industries where CO2 is emitted in the atmosphere, significantly contributing to global warming.  Although there is limited carbon capture for such products as urea fertilizer, these hard-to-abate industries are being forced to change to the use of clean resource energy. That is likely to be hydrogen due to its heat-generating properties.

Many Industries today do know a lot about the properties of hydrogen and has been “handling” it for decades. Can they change and what level of investment and system re-design does this incur to accelerate its adoption? The challenge is a big one to turn the present reliance on fossil fuels alongside present limited use of hydrogen, into processes where it is hydrogen as the central energy source produced from clean energy or renewables. Hydrogen solutions will need to be radically different.

The push today and in the future is Hydrogen will be based on clean energy sources, renewables.

Today predictions are suggesting an ambitious scenario for hydrogen deployment that Hydrogen could provide up to 24% of total energy demand alone by 2050 (BNEF analysis) and a similar share in one recent estimate provided by Hydrogen Europe for Europe.

The challenge is to balance the seeking of low-carbon electricity through fossil fuels with carbon capture, utilization, and storage with replacing it with green Hydrogen, all generated by renewables.

The essential need, no easy task, is to achieve in any replacement of existing fuels or process a minimize disruption and replacement, the same or better return, or provide a compelling logic to make the necessary change such as a clear need to switch to clean energy for competitive or societal pressures.

Yet this logic offers a market-driven one, will this energy transition become a socially-driven one, compelling the existing market structures to change. Possible but it needs a very focused effort

The post Our need for a climate-friendly energy source first appeared on Innovating the Energy Transition.

So what is going on? What is causing this incredible jump and market sentiment?

To add a little more to this “what is going on” let me do something else.

Why do I compare Plug Power to Apple in past years? It is simply how its stock has rapidly accelerated away in the past year or perhaps the growing expectation of sizable growth to come, on new products and market penetration. 

A year ago, Plug Power struggled to raise money, but it has been executing on a plan consistently in the past few years that is beginning to pay off.

Plug Power has still yet to make a profit, the likelihood is even in its next quarterly round it will still not be making a profit, but the “market sentiment” for all clean energy is very bullish, and the work Plug Power has put into its 2020 activities is generating this market excitement.

What’s going on? Time to delve a little deeper. Let me offer my longer read evaluation taking 10 to 12 minutes of your time.

A short story of Plug Power, background and some crystal gazing

To quote Jim Cramer, host of Mad Money on CNBC, this week states: “ Plug Power needed money for years and years. Now, though, because of a combination of fund-raises in the stock market and SK, Plug Power doesn’t need the money. It’s free to become a large energy company itself enjoying the lowering electric costs that make its technology too cheap to be mind-bogglingly stupid. You could have called me a hydrogen doubter. Now that it has scale call me a hydrogen believer and I believe in the Plug Power solution to make it all happen.” (source)

Now that enthusiasm needs a fair amount of ‘rowing back’ as current market evaluation needs to be equated in sustaining product delivery.  But, yes, Plug Power can be at the (next) beginning of growing, as a large energy company, it is certainly in the right place at the right time.

Green hydrogen is seen to be a critical enabler of resolving the carbon issues we are facing in a rapidly warming planet. Plug Power has been selectively ‘picking off’ segments of the market that need fossil-free solutions to be part of the clean fuel economy. That focus on customer satisfaction points of speed, scaling and seeking best-in-class status is building a sound winning formula.

The  Plug Power reputation builder: Material Handling

Plug Power has gone after the material handling market, especially replacing the batteries on forklift trucks and all the big players who have real needs to bring their carbon footprint down, such as Walmart, Home Depot, and Amazon warehouses, have replaced their batteries with hydrogen fuel cells.

Getting to this point has required Plug Power to achieve scale in converting hydrogen to clean fuel into the fuel-cell battery and made its technology and deployment to be convenient and easy to apply in demanding operational environments. A little like Apple went after scale, pervasive, easer to use (or apply in this case) and ever-present or available to simply adapt to the job on hand.

Plug Power has also been focusing on e-Mobility.

As Plug Power has been rapidly developing a reputation for having the real experience to deploy fuel cells and handle hydrogen. Its USA focus and perhaps success recipe is now at the point of “going global.”

Hydrogen refuelling stations will be a huge business as LCV’s, Trucks, Buses, FC Trains all gather for providing hydrogen momentum. Plug Power is presently expanding in Europe and already aligning with different partners like Alstom delivering a growing Green Hydrogen Network and product solutions in fuel cells that build out their portfolio.

Today, 12th January 2021, in a press release a joint venture between Groupe Renault and Plug Power join forces to become leaders in Hydrogen LCV.

• Memorandum Of Understanding (MOU) signed to launch a 50-50 joint-venture (JV) based in France by the end of the first half of 2021, targeting over 30% share of the fuel cell-powered light commercial vehicle (LCV) market in Europe.
• Joint-venture will establish in France state-of-the-art innovation and manufacturing capabilities for hydrogen fuel cell systems and their integration in vehicles.
• The partnership provides a unique value proposition: turn-key fuel cell vehicle solutions with hydrogen fuel, refuelling infrastructures and services.
• This strategic project supports the decarbonization of mobility in Europe with the adoption of clean energy solutions, and the creation of innovating value-generating activities in France, including an industrial footprint in a promising market, business know-how and intellectual property in this new field of technology

This strategic JV will position Groupe Renault and Plug Power to become key players in Europe in the research and development (R&D), transformation, manufacturing and sale of fuel cell-powered vehicles and hydrogen turn-key solutions in the coming years.

The JV intends to offer unique, comprehensive, differentiated products and solutions to the LCV market, designed around 3 key pillars:

• R&D: Groupe Renault and Plug Power intend to establish an Innovation Center for the development of fuel cell technology and hydrogen fuel cell LCV vehicles based on existing and future Groupe Renault platforms. The initial focus will be on the heavy van segment utilizing the Traffic and Master vehicle platforms. This centre will be unique in combining R&D efforts of fuel cell and vehicles with integrated engineering teams.
• Manufacturing: the joint-venture will combine the vehicle manufacturing capabilities of Groupe Renault with the fuel cell and hydrogen system manufacturing knowledge of Plug Power, establishing a vertically integrated fuel cell stack and system manufacturing centre in France for integration into LCV vehicle platforms. In addition, this manufacturing centre will provide hydrogen refuelling systems, a key part of the hydrogen ecosystem.
• Sales: this partnership will create a hydrogen vehicle eco-system solution company that offers vehicles, hydrogen fueling stations, hydrogen fuel, and services to customers. This comprehensive solutions approach will accelerate adoption by commercial fleets.

The further ambitions beyond fuel cells are ambitions in the future

Focusing on bringing Hydrogen to the market, refuelling stations for fuel cell vehicles can also be a building out to being a source at Sea Ports and Airports to build out hydrogen or derivatives.

Then the big ones for Industrial Green Hydrogen Solutions

The P2P, P2X and P2M are opening up as diverse markets for Hydrogen as decarbonization initiatives “kick-in” and cost-competitive hydrogen to existing fuels (H2$/kg decreases markets open up).

These possible markets are seen by Plug Power in Stationary Energy Storage, Off-Grid Applications for P2P, and Ammonia, Steel,  Chemicals forming the P2X markets where alternatives need to find technology and fuel replacement application solutions, and finally, P2M of a rapidly growing fuel cell market for Electric Vehicles globally.

Plug Power also sees Data Centres, Micro Grids for Energy Storage ideal for applying green hydrogen. It turns them all green or carbon-free. No issue there.

The Hydrogen Markets potential is huge.

Some estimates put the size of Green Hydrogen at a $200 billion addressable market. There are even larger numbers I have seen.

Yet Electrolyzers are going to be the key for delivering to this potential.

Like the Smart Phone for Apple, the Electrolyzer( read Show me the Electrolyzer)  is the catalyst for the whole Energy System.

The price of H2 determines each market entry point. As Wind and Solar continue to gain scale and forces reductions in energy prices, the renewable presence across all energy sectors brings the potential for significant hydrogen to be added into the renewable mix. The triggering in prices depends on each market, but for hydrogen needed to be converted as a viable, sustainable fuel alternative that needs to get to Euro 2.50/kg and at real scale towards Euro 1.75/kg are the target points example, here in Europe.

The input cost, be this electricity, wind and solar need to keep falling to work with Hydrogen solutions to be competitive. Clearly, to achieve green hydrogen, Plug Powers end focus point, the conversion to Hydrogen needs a highly competitive Electrolyzer in price and what it can produce as output.

Plug Power is committed to the proton exchange membrane (PEM) for its electrolyzer solutions as this is where by using green electricity, from Wind or Solar to electrolyzer water into hydrogen offers a carbon-free alternative.

This PEM Electrolyzer solution applies electricity to water, splits water and oxygen to separate for the final fuel need of hydrogen. Most hydrogen today is from steam reforming methods by natural gas or coal and carry very significant carbon emission footprints. Other Electrolyzer solutions are fossil fuel-driven.

Solving the PEM Electrolyzer to be able to scale at a commercially attractive price (affordability) so it can be applied to all the Hydrogen markets is the Smart Phone equivalent in the Energy sector. A real solution to the energy transition.

individual electrolyzer units, called stacks need to become increasingly efficient to process one gigawatt of electrolysis per year.

Today that efficiency of electrolyzers is still really at a “pilot ramping up learning scale”stage,  with tens of megawatts per stack. Technology needs to change away from stacks or stacks need to get into in the range of hundreds of megawatts each by 2025, and eventually move to even larger units.

The next decade will see the evolution of technology and engineering to bring scale to the Electrolyzer. The companies equipped to invest in the research and development will be the new Wind equivalents like today’s Vesta or Gamesa.

Plug Power is building a PEM Giga factory but so are many others building their hydrogen presence. It is not the manufacturing of Electrolyzers per se,  it is the technology breakthrough needed to scale these. Has Plug Power got the necessary “technical and scientific chops” to deliver breakthrough solutions?

This technology breakthrough on the Electrolyzer is my point of concern for Plug Power.

They are going the stack route by simply working on increasing stacks based on existing, proven solutions. Still, I wonder, without any great detailed technical understanding from my side, if they have the answer to scaling hydrogen outputs away from simply stack building? Or are they simply just increasing the existing stacks? That will not work for the sheer amount of hydrogen needed globally.

Source Plug Power

They are investing in a new PEM Technology Center that will focus on the parts of an Electrolyzer but is this application of thinking in stacks being locked into the existing “seen” solution? I feel so, but time will tell.

Source. Plug Power Symposium Presentation September 2020

Competing with the Industrial Solution Giants

For me Siemens or ThyssenKrupp as two Industrial solution giants, both known for their industrial-scale solutions. At present they are more likely to find the abilities internally for technology breakthrough, and greater understanding for larger-scale industrial application in segments such as P2P, P2X and P2M as they both have the known capabilities and competencies that the Energy Industries have come to rely upon and trust.

The move to a Mature Energy solution provider is Plug Powers major challenge.

Plug Power’s difference is it has focused on specific segments where existing solutions of Electrolyzer output for Hydrogen works to build fuel cell capabilities. To think big industrial scale for being the solution provider for Iron and Steel, Chemicals or any of the worlds huge industry plants is a totally different ball game. Can they? I feel not in their present form or organizational design.

Will we be seeing a Nokia and Apple transformation moment? 

If Plug Power sees itself as the leader in the deployment of green hydrogen solutions (present vision statement), then I can relate to this if it focuses on Fuel Cells only, but I struggle on the greater green hydrogen potentials where the Power-to- X as the bigger prize.

Will Plug Power stay with Fuel Cells, and Green Hydrogen solutions (electrolyzer sized to this market segment) or will they venture into the huge Hydrogen market that industrial solutions give. The Electrolyzer thinking needs a giant step change for Plug Power. Still, why not?

Like Apple, it is all about visions, imagination, determination, focus, application and bringing together the technology and manufacturing solutions together in groundbreaking solutions and strategic partnerships,  at a point of time access to money and gaining financial market sentiment.

Plug Power is focused exclusively on Green Hydrogen, it has a fighting chance through imaginative partnerships and staged focus points.

Both Siemens Energy and Thyssenkrupp have “wicked” legacy in their present energy solution portfolio’s. As established large Energy solution providers, with a huge legacy of past Energy Solutions, can they be agile enough, inventive enough or able to plough the money into green hydrogen and PEM Electrolyzers in a dedicated fashion? Plug Power possibly can, but it is a bigger, more demanding stretch than their current plans or resources to compete in engineering, technology and application understanding.

Visions come and go, a new one needs to be articulated by Plug Power now.

Yet all things change within a few short months. In listening to Plug Powers CEO, Andy Marsh where he outlined their vision last September in their symposium, it already seems really inadequate to what has happened to them in these past few months. Forging new global or regional partnerships can radically change the positioning.

Plug Power needs a rapid update of its vision now.

Why? Plug Power raised $1 billion in bought equity to fund its plan to complete the first US-wide networked green hydrogen production facilities to supply fuel-cell products. The capital raised with Morgan Stanley gave Plug Power total cash post-closing balance to $1.7 billion.

Plug Power is well funded for its next rapid expansion from recent announcements.

Early this year (2021) Plug Power raised $1.5 billion from South Korea’s SK Group to enter the Asian market. SK Group is the third-largest company in South Korea. It has formed a strategic partnership to accelerate the hydrogen economy in South Korea and the plans to have six million fuel cell electric vehicles and 1,200 refilling stations in place by 2040. 

SK Group liked the Plug Power turnkey solution for using green clean hydrogen. That injection of $1.5 billion gives 9.9% stake in the fuel cell provider as part of this partnership to reach Asian markets.

To quote Andy March, the Plug Power CEO ” “SK Group has an established strategy for building out the hydrogen economy in South Korea and beyond,”. He goes on to say “The current relationship with SK Group offers immediate strategic benefits to Plug Power to accelerate its expansion into Asian markets – and is intended to result in a formal joint venture (JV) by 2022.”

Combined with the already outlined plans for Europe detailed in that September Symposium Plug Power are accelerating their Fuel Cell core business of EMobility and Material Handling significantly, why beyond market expectation.

The market sentiment is high for Plug Power, now they need to deliver

The market reaction was not just the significant jump in Plug Power share, but it still struggles to make profits due to its recent expansion plans and inability to scale to meet demand.

Market valuations, comparing apples with pears or are we?

Presently Plug Power market value is $24.9 billion, bigger than utility giants like PG&E Corp and Consolidated Edison Inc.  Remarkably Plug Power was worth about $1 billion (Bloomberg) a year ago!.

Siemens Energy recently spun off from Siemens AG and has a present market worth of Euro 24.2 billion or $29.4 billion at the time of writing. Still, the market believes it is trading well below its true market value.

Today the market valuations for Plug Power looks high, and the Siemens Energy seem low.

The pulling away point comes in managing the portfolio, and the energy focuses each has. Plug Power is exclusively focused on green hydrogen solutions and fuel cells. Siemens has a diverse portfolio of past, present and future energy solutions. Gas-Power generation and grid transmissions make up over 50% of the portfolio.

Hydrogen will be the accelerator, as it is the renewable clean energy future and the markets are focusing on this energy transition as where the “smart energy money” goes. The one that focuses on hydrogen seen by the market is where the money is going.

Market sentiment can change overnight.

If Siemens has a PEM Electrolyzer solution covering all green hydrogen demands from fuel cells, networks of hydrogen needs, and industrial solutions, it pulls away from its current market valuation.

If Plug Power pulls its “smartphone” equivalent of its Electrolyzer solutions out of its portfolio hat, it continues towards that suggested positioning offered by Jim Cramer of being “free to become a large energy company.”

Will it? It is all to play for, for both. Scale, technology innovation and scope of renewable offering makes the difference

2021 is the big scaling year for Plug Power

2020 has been an amazing year for Plug Power, maybe moving towards scale in Hydrogen and the solutions but the sheer scale of its task to come is the challenges it sets itself in 2021 for the next five years.

The present ones articulated by Andy March, the CEO, back in September 2020, need to be less visionary and aspiration to attract the finance. It needs to switch to a roadmap on focused execution.

It needs to extend out in why its Plug Power turnkey solution for using green clean hydrogen is proving highly attractive to its future relationships and partnerships to grow the business.

Plug Power in my mind can hit real scale but…..

 This will be determined by its detailed roadmap and its portfolio resolutions and progress with its clarity on its market focus on solutions (fuel cells vs industrial, for example). This is the biggest call Plug Power will be making this year. Sizing up to market sentiment and expectations. A really major shift for the top management to outline succinctly.

To realize that ambition of being both a leader in fuel cell technology and green hydrogen and the bigger scope of green hydrogen beyond fuel cells, it has eluded too is the call needed.

The building blocks to drive growth need a sharper clarity now that raising equity, possibly beyond internal expectations has taken place.

Watch Plug Power with growing interest, I am even more than in the past

**Note: the announcement between Groupe Renault and Plug Power added later in the day of posting this and parts of the post relating to Electrolyzers was updated or corrected on 14th January 2021.

The post Are we seeing the Apple of Hydrogen in Plug Power? first appeared on Innovating the Energy Transition.