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1, The SunZia project. The huge SunZia wind and transmission project in western USA finalised its $11bn financing. The electricity from 3.5 GW of turbines in New Mexico will be carried almost 900 km to the regional grid in Arizona and southern California. SunZia will create one of the longest high voltage direct current links outside China, as well as the biggest wind farm in the US. The country expects to have to triple its electricity transmission network to accommodate the growth in renewables. This project indicates just how complicated that expansion will be; SunZia has been in the planning process for 17 years.
2, Ammonia ships. Two further ships were ordered from Korea, adding to the several other orders placed in recent months. The IEA has suggested 70 large ammonia carriers will be needed before 2030 to move hydrogen by sea. (Ammonia contains large amounts of extractable hydrogen). 26 ships of the required size have been ordered in the last few months, while no ammonia carriers of this size are being used today. Is the rapid growth indicative of a shipping industry confident that ammonia will be the medium of choice for long distance energy transfer? Hydrogen Insight points out that these new ammonia carriers will also be able to ship LNG and other fuel gases. So although an ammonia ship will be more expensive to build than an LNG-only equivalent, the rapid pace of new orders does not definitively prove that the shipping industry is certain about the future of ammonia. Sensibly, ship owners just want to have the carriers in place if ammonia does take off. If not, they can be used for natural gas.
3, Chinese wind turbines. No Chinese wind turbine is yet installed on European soil, although a small number have been placed offshore. The US has also resisted turbine sales from this source. However Chinese manufacturers now supply over half the world’s market, supported by the rapid growth in installations in their home country. Some reports suggest that the price of turbines from China is little more than half the costs quoted by Western manufacturers. Two new stories this week of further progress of Chinese turbines into South America; market leader Goldwind is providing the turbines for a 342 megawatt farm in Chile while MingYang, the third largest Chinese manufacturer, said it would be supplying a 240 megawatt project in Brazil. (I saw these new stories on Renewables Now). There are now almost no categories of clean energy equipment in which Chinese suppliers do not have an increasingly dominant global position. Electrolysers may be an exception to this generalisation but I suspect that this market will also move to China soon.
4, Biochar. Biochar is the carbon-rich residue created when organic materials such as straw or wood chips are heated to high temperatures in the absence of oxygen. When dug into soil, the product seems to generally remain unchanged for many years, perhaps centuries. According to a recent study produced by the trade association, biochar may be capable of sequestering the equivalent of 3 billion tonnes of carbon dioxide a year, or 6% of global emissions. In addition to the carbon storage consequences, many soils treated with biochar, particularly in tropical regions, show increased fertility and better water holding characteristics. After more than a decade of scientific research but limited commercial interest, biochar is finally taking off. Startups are now beginning to be able to raise funds and obtain contracts to partner with agricultural companies. For example, US company Standard Biocarbon received investment of $5m to begin production this year. In East Africa, Spanish venture Biosorra announced a deal with Kenya Nut Company to transform the customer’s waste organic material, such as nut hulls, into biochar for adding to the soils of its farmers. Biochar is still expensive but better funding will help pull down the cost of carbon storage. And one big advantage of this form of carbon removal is that the quantity of new CO2 equivalent storage is reliably verifiable.
5, Amazon makes its own hydrogen. Warehouse fork lift trucks provide probably the best financial case for using hydrogen fuel cells for transport. (Heavy vehicles using hydrogen fuel cells at remote mines may also offer good economics). Amazon is now producing its own hydrogen at one of its fulfilment centres in Colorado for use in fork lifts. A 1 megawatt Plug Power electrolyser will provide enough H2 for up to 400 trucks. As the supplier comments, hydrogen produced in this way from variable renewable sources, such as variable solar power generated on warehouse roofs, can utilise electricity that would otherwise be unused by Amazon.
6, Spanish community solar. Iberdrola won a prize for a community solar project. PV panels totalling 355 kW were put on the roofs of public buildings in Cedillo, a small town in the west of the country. Local homes and business can join the cooperative that gets its electricity from these installations. According to Iberdrola, these customers will pay up to 50% less for their electricity. It is probably no coincidence that Iberdrola is developing several very large solar firms in the immediate area, including one of the first hybrid solar/hydro plants. More generally, it seems an excellent idea for solar and wind developers to offer nearby customers large reductions in their electricity costs to boost local support for otherwise unpopular large projects.
7, Nylon recycling. Nylon represents only about 2% of global plastics manufacture, but a disproportionate amount ends up in the oceans, partly because of discarded fishing nets. As a result, nylon is often the most abundant plastic in the stomachs of marine animals. Recycling has been highly problematic because of the difficulty of separating nylon from other plastics. Researchers at Northwestern University in the US showed how a new catalyst might enable the polymers in nylon to be broken down into the original monomers quickly and at a relatively low temperature. This is what is called ‘chemical recycling’ and we’ll see increasing emphasis on this approach to the reuse of all types of plastics in the next few years. Effective chemical recycling will mean that plastics can be indefinitely reused, a major improvement on current ‘mechanical recycling’ methods, which diminish the usefulness of the plastic.
8, Willingness to pay for low carbon goods. International consultants BCG surveyed consumers in large countries to find out what price premiums would be acceptable for expensive goods such as cars and washing machines that have been made with net zero emissions. Writing about electric cars, BCG reports that ‘75% of Chinese BEV drivers and 55% of German BEV drivers state a willingness to pay that would be enough to … cover decarbonization costs, plus margins for all the value chain participants’. Chinese consumers seem strikingly more ready to pay a healthy premium than Western buyers across the small number of goods studied. For example, 50% of those surveyed in China would pay a markup of 12% on a net zero washing machine compared to 6% in Germany and only slightly more in the US. Of course surveys like this have their weaknesses - people don’t always do what they say - but there’s a clear signal here that Chinese manufacturers may have greater scope to pursue emissions reduction in manufacturing than Western companies. Their customers will pay more for low carbon goods.
9, Morocco fertilisers and hydrogen. Morocco holds a dominant fraction of phosphate reserves. To make diammonium phosphate, which provides a large percentage of global fertilisers, producers also need hydrogen and nitrogen. Morocco’s excellent solar and wind resources, combined with the political stability that gives it access to well-priced capital, may mean that the country is uniquely well-placed to make this type of fertiliser. Its world market share of about 10% of all phosphorus fertilisers will rise. In the past, it has needed to buy in natural gas to make the hydrogen it needs but investors are now crowding cash into the production of green hydrogen locally. Abu Dhabi is intending to put $10 bn into a 6 gigawatt hydrogen project (albeit in the contested region of Western Sahara rather than in Morocco proper). Other investors, including Morocco’s own OCP, have pledged similar amounts. As with steel, my guess is that fertilisers will eventually be made in places with the cheapest solar and wind energy.
10, Reusing glass bottles. The problem with the current pattern of recycling is that collecting old bottles and then melting them back into glass saves only about a quarter of the energy used to make the bottle in the first place. It would be far better if they were collected, cleaned and then reused. Global spirits producer Diageo said it would begin to use the returnable glass bottles produced by EcoSpirits. A gin, a whisky and a vodka will be distributed in 4.5 litre containers to commercial customers, which will then return them when empty. EcoSpirits, a company based in Singapore and founded in 2018, already operates in 27 countries. Separately, Familia Torres, the Spanish wine producer that is driving worldwide decarbonisation efforts in the wine trade, has been operating a bottle return system for one its organic wines for several months as well as trying to persuade the industry to standardise bottle sizes and shapes to make reuse easier. In my view, the world needs to carefully examine a refundable deposit scheme on all glass containers.
Slightly unfortunate time to pick substack for your newsletter, still loving the updates though.
I have been reading Carbon Commentary for a few years now and always look forward to it. I hope the move to Substack is successful. The nylon story in particular caught my attention, given the importance of, and slow progress around, the challenge of ghost nets. Thanks Chris.