Part 2 - synthetic fuels (can you detect a note of optimism?):

 

Casey Handmer says solar power is changing the economics of energy

Large-scale production of synthetic fuel is now feasible, argues the founder of Terraform Industries

Illustration: Diego Mallo

Nov 20th 2024

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By Casey Handmer, founder of Terraform Industries

What if we could make cheap fuel out of thin air? For more than a century, a bewildering variety of methods has been attempted to make drop-in replacements for fossil fuels. Such synthetic fuels could be used with existing energy, transport and industrial infrastructure, collectively worth over $100trn.

Petrol, diesel, kerosene, propane, oil, natural gas and rocket fuel are all hydrocarbons. Synthetic fuel therefore needs sources of hydrogen (from water) and carbon (from atmospheric carbon dioxide). Nature has used this recipe to make living things, including humans, for billions of years. Before the Industrial Revolution, plants were our primary source of fuel. But plants do not use solar energy efficiently enough to make replacements for fossil fuels. Is there another way to use water and air to make huge amounts of cheap fuel?

Whatever process we use will require vast quantities of energy. Synthetic fuel is made by converting electrical energy into chemical energy. But ripping water and carbon-dioxide molecules apart to make fuel requires as much energy as is subsequently released via combustion, and more besides. If done using electricity obtained from the grid, powered by combustion of coal or natural gas, fuel synthesis cannot be cost-competitive with fuel-mining. We need new energy sources that are abundant, cheap and less environmentally harmful than fossil fuels.

And what is the cheapest, most scalable source of energy humanity has ever known? Solar photovoltaics. Carbon-free, zero moving parts, no uranium enrichment, and no specialised labour required. Solar cells are panes of glass that print wealth. We should deploy them accordingly.

It turns out that converting between chemical and electrical energy is about 35% efficient in either direction. Conventionally, burning fuel to make electricity has been the natural economic flow. But once solar energy costs less than 10% of the price of grid power, the economics favour the conversion of electricity into carbon-neutral chemical fuel. This is just a few years away. Solar is getting 15-20% cheaper every year as manufacturing becomes more efficient. Solar synthetic fuel will soon be cheaper than conventional fuel in some markets, and by about 2040 it will be cheaper everywhere.

I noticed this trend four years ago, and resolved to make this vision—of unconditional energy abundance—a reality. I quit my job writing software at NASA’s Jet Propulsion Laboratory and founded Terraform Industries. I raised seed funding from investors who shared my forward-looking optimism, hired the smartest engineers I knew, and got to work. At Terraform, we’re now making cheap, synthetic natural gas from sunlight, water and air.

Our “Terraformer” system is a compact chemical plant designed to integrate directly with a one-megawatt solar array in the field—so there are no electricity-transmission costs. It contains an electrolyser (to make hydrogen from water), a carbon-capture system (to extract carbon dioxide from air) and a Sabatier reactor that combines the two to make synthetic natural gas (methane). The whole thing is powered by solar energy.

Cheap and abundant solar power, directly from the array, will transform dozens of industries

So far we’ve shown that we can produce hydrogen for less than $2.50 per kg, carbon dioxide for less than $250 per tonne, and pipeline-grade synthetic natural gas for $35 per thousand cubic feet (MCF). This puts us in economic contention in many markets that rely on imported fuel.

We won’t rest until we’ve saturated the global market for any hydrocarbon at a price cheaper than fracking. We have significant further cost reductions on the way, and a pathway for developing liquid fuels from methanol. In 2025 we expect to be able to produce hydrogen for well below $2/kg. Our full-scale Terraformer, which we will demonstrate in the next few months, will produce 2,300 MCF of natural gas per year. (A typical home uses about 70 MCF a year for heating and cooking.) We need to deploy millions of these over the next couple of decades to meet global demand.

Cheap and abundant solar power, directly from the array, will transform dozens of industries beyond fuel production. It can be used for desalination, cement production, to provide industrial heat and to make fertiliser. Solar power unlocks incredible material wealth for all of humanity with a mere fraction of Earth’s land area under panels. And, of course, moving beyond finite fossil fuels to abundant solar energy solves the carbon-emissions problem—in addition to supercharging global economic growth. 

Two posts on the energy future - your future. Part 1 - fusion:

Fusion power is getting closer—no, really

The action is shifting from the public to the private sector

Illustration: Science Photo Library

Nov 20th 2024

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By Geoffrey Carr, Senior editor, Science & technology, The Economist

Two developments in the coming year will mark a decisive shift from the public to the private sector in the decades-old quest to generate cheap and abundant power from nuclear fusion. The first will be the opening towards the end of 2025, by a private firm, of a machine called SPARC. This will be the first fusion reactor, public or private, designed to operate at near-commercial scale, with an eventual output of about 140 megawatts (MW). The second will be the non-opening of ITER, the flagship of intergovernmental fusion collaboration, which was scheduled to be ready in 2025. In a hurried announcement in July, that date was postponed.

SPARC is being built by Commonwealth Fusion, a spin-out from the Massachusetts Institute of Technology. Design-wise, it is a tokamak. This is a machine with a toroidal (ie, doughnut-shaped) reaction vessel surrounded by powerful electromagnets which confine and heat the fuel. That fuel is a plasma of two exotic isotopes of hydrogen: deuterium and tritium. These, when suitably heated and confined, undergo a fusion reaction that liberates helium, neutrons—and a lot of energy.

ITER is a tokamak, too, with an intended power output of 500MW. Unfortunately for the 35-country collaboration building it in France, it won’t be ready in 2025. In fact, it is nine years behind schedule, and will not be switched on until 2034. Commonwealth Fusion hopes to reach “q>1”, the point where a reactor releases more energy than is put into it, in early 2026. ITER will not, on its new schedule, reach this point until 2039.

If SPARC works and provides the data that Commonwealth needs to build a full-scale power plant (scheduled for the early 2030s), that will probably be the end of ITER. And even if things do not go to plan for Commonwealth, it is not alone in trying for fusion with private money.

The latest estimate from the Fusion Industry Association, a trade body, suggests that $7.1bn has been raised by more than 40 firms with fusion in their sights. Many are still tiny startups, but several have more than $200m in funding.

Some of these firms are pursuing more exotic approaches than tokamaks, which have, until now, been the tried-and-trusted design for fusion research. General Fusion, a Canadian firm, plans to compress and heat a deuterium-tritium plasma in liquid-metal cavities. A test reactor, in which the compressing metal remains solid, should switch on in 2025.

Helion, in Washington state, proposes a different fuel: a mixture of deuterium and an unusual isotope of helium. Its latest test-bed, Polaris, should also be up and running in 2025. Zap Energy, also based in Washington state, is reviving a once-obsolete approach called z-pinch. ENN, of Hebei province in China, plans to fuse hydrogen and boron. In short, if Commonwealth Fusion fails to deliver, many other startups are lining up right behind it.  

Impact of a windfall tax (as I said all along...)

 

JULIET SAMUEL

Treasury idiocy is killing North Sea energy

Ministers privately admit that hastily extending the windfall tax was a mistake and its true cost is now becoming clear

Juliet Samuel

Wednesday May 24 2023, 9.00pm, The Times

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David Duguid well remembers the Burns Night he spent in Baku, Azerbaijan. On the hunt for haggis, he had to criss-cross the city from shop to shop. The marvel, perhaps, is that he was able to find any at all, let alone 13 tins. But, as he says: “You go anywhere in the world in oil and gas and you’ll hear Scottish accents.”

For how much longer will this be true? Duguid is now a Tory MP representing Banff and Buchan, a rural region heavily reliant on North Sea oil and gas. Despite historically high prices, the industry he joined decades ago is under siege and the future of its next generation of workers is in doubt. The downturn is being driven by a rash of taxes and political attacks. Banks have stopped lending. Britain’s oil and gas industry, one of our prime economic assets and an employer of 150,000 people on good salaries, is being systematically strangled.

Climate activists have had the industry in their sights for years and their campaigns have taken a toll. But it is the recent rounds of poorly designed windfall taxes, and warnings by Labour that it will stop all “new investment” in fossil fuels, that have really sent the industry into a tailspin. Nine in ten capital projects in the North Sea are now on hold. The largest of them is the Rosebank field, where work was due to start extracting 300 million barrels of oil. Activity in new fields is at a 40-year low. Investment has cratered to the point where future production will be below even what is required by the Climate Change Committee’s preferred “pathway” to net zero.

• Aberdeen could lose standing in energy sector due to ‘hostile political environment’

The North Sea is critical to British energy security. Oil and gas supply more than two thirds of our overall energy. Wind and solar, despite all the hoo-ha, supply less than 10 per cent and cannot be relied upon in the wrong weather. About half our oil and a third of our gas is produced in the North Sea. So running it down simply means the UK will have to import more, which is both riskier and more carbon-intensive.

Despite this, the industry has been recklessly treated as a cash cow for years. A tipping point has now been reached with the latest so-called windfall tax, introduced last autumn in Jeremy Hunt’s frantic post-Truss fix-it job. The government’s first windfall tax had been set to expire in 2025. But in November, apparently without much thought, the tax was raised and extended to 2028. The new timeline means it will now capture almost every new project due to start in the coming years, even if oil and gas prices fall. It is no longer taxing windfalls, but is imposing a punishingly high cost on doing business.

The impact is striking. The UK’s biggest producer, Harbour Energy, wound up paying an effective tax rate of 100 per cent last year. Without the extra tax, its profits would have risen eight-fold. As it was, during a bumper year for all its rivals outside the UK, it barely broke even. It soon put all its British projects on ice and started talking about job cuts — precisely what campaigners for the tax told us wouldn’t happen.

Even this isn’t enough for them. Labour has vowed to close down “loopholes”, otherwise known as incentives to invest, if it gets into power. This would be the seventh major change to this tax regime in 20 years, in an industry that thinks in decades. Norway, whose successful windfall tax has been cited so often, has changed its regime just once in that time (to make it more generous during Covid). And Oslo suspends the tax when prices fall below a certain level. As a result, Norway has saved Europe from freezing and is finding ever more supplies. The UK, by contrast, has become an investment pariah. One after another, corporate presentations to shareholders are emphasising a shift away from Britain towards other, more stable political environments, like West Africa.

• North Sea Transition Authority gives green light for 20 carbon storage sites in UK waters

All of this at a time when Europe’s energy crisis is still very much unsolved. Prices may have fallen for now and yes, we made it through last winter because the weather was average and Chinese demand was still in lockdown. But what about the coming winter, and the one after that? The plan, insofar as there is one, is to rely on more imports from the United States or Middle East, which means being at the mercy of global gas markets — while Britain wrecks its own production prospects and fails to open more storage capacity so we can stockpile.

Nor will the levies bring in much revenue. Investors fear they’ll wipe ten years off the life of the industry and bring forward decommissioning costs, which the government is obliged to help fund. Overall, this will cost the Treasury money.

If all of this were actually good for the planet, one could perhaps make some argument in its favour. But it is likely to cause a significant rise in global carbon emissions. If UK production falls, Britain will be forced to buy more European gas and Europe will in turn burn more coal and import more carbon-intensive gas by ship. If the North Sea infrastructure is dismantled, a key part of Britain’s net-zero plans will become much harder. Carbon capture, the burial of CO2 emissions, will require the North Sea’s gas chambers, its pipelines, rigs, terminals and workforce. Instead of nurturing this supply chain, the people in it and their specialist skills, the government is presiding over a mass exodus of talent.

Does any of this sound perverse and shocking? Well, it’s no shock to the government. In private, ministers and their advisers readily admit they acted in haste and messed up the whole thing. They know they could alleviate the damage with relative ease, by applying a price floor to the tax and increasing investment allowances.

This wouldn’t eliminate the threat from Labour policy, but it would at least change the status quo and force the opposition to deal seriously with the trade-offs when it gains power. Yet despite quiet reassurances to the industry, March’s budget came and went without news. Ask government insiders why and they squirm. “The politics are difficult,” they whisper. “It doesn’t play well.” In other words, our government is knowingly engaged in an act of economic vandalism purely for the sake of short-term political gain. It is sacrificing both Britain’s energy security and the climate because “standing up to Big Oil” sounds good in focus groups.

A few weeks ago, the country was appalled to learn that Russia had been sending spy vessels around the North Sea in a possible precursor to sabotage. The truth is that Moscow needn’t bother. If the government has its way, North Sea industry will soon be in irreversible decline. Who needs the FSB when you have the Treasury?

Now about that fusion power thing:

 Not a mention in here:

What do we do when the wind does not blow, and the sun does not shine?

AMBROSE EVANS-PRITCHARD16 May 2023 • 3:30pm

If Britons had been told a decade ago that wind power would generate more electricity than gas over the first quarter of 2023, very few would have believed it. 

Media disbelief, technological fogeyism, and institutional resistance from large parts of the British establishment obscured the view.

UK’s wind farms reached 32.4pc of total electricity supply over the first three months. Gas slipped to 31.7pc. Solar reached its own seasonal record in April. National Grid said 46pc of the UK’s total power came from renewables last month. This displaces liquefied natural gas (LNG) imported from the US and Qatar.

So far, so good. The UK has been able to add wind and solar to an existing infrastructure and grid designed for fossil fuels without crashing the system. The harder test is to come as the country moves at breakneck speed towards an entirely different structure, with renewables becoming the big beast of electricity supply. 

The UK currently has 43 gigawatts (GW) of installed renewable capacity. This is heading to 130 GW in short order, assuming that Britain's ambitions are not thwarted by the permitting bureaucracy and the global supply crunch in turbines and solar panels.

The Climate Change Committee wants 65 GW of offshore wind alone by 2035, and the giant new turbines being rolled out in the wind corridors of the North Sea have almost double the capacity factor (energy yield) of earlier baby blades. 

The arithmetic is obvious. Renewables will displace gas altogether on increasingly frequent occasions and at times overwhelm the grid with excess power, as already occurs in Scotland. 

At other times, renewables will leave a huge and sudden gap. What do we do about Dunkelflaute wind droughts that last for days or even weeks, typically in mid-winter when power demand is greatest, and when there is no solar either? 

Delft University says these high-pressure weather systems typically range from 50-100 hours. But they can be much longer during freak years. You need strategic back-up for the worst extreme.

The default solution is to continue piping in North Sea gas, or importing LNG, for use in peaker plants exactly as we do today but in diminishing volumes and with rising reliance on carbon capture.

America’s NET Power is already developing the UK’s first zero-emission gas plant for the Teesside Carbon Cluster, based on the Allam Cycle pioneered by British inventor Rodney Allam. 

Rather than bolting an amine capture-system onto an existing gas plant, which depletes power and doubles the cost, it builds the plant from scratch and harnesses CO2 as a fuel for an “oxy-combustion” process in a closed-loop. It captures 97pc of the carbon.

Founder Bill Brown told me that he could produce the world's cheapest clean (blue) hydrogen. That may prove difficult in Europe where the price of gas is much higher than in America. How will the world penalise methane leakage from extracting and transporting that gas?

Whether or not NET Power wins the prize, it is a racing certainty that the likes of Exxon, Shell, and Saudi Aramco will succeed in slashing the cost of carbon capture as they embrace the technology with the zeal of the converted.

So yes, we can still rely on gas when the wind does not blow and the sun does not shine. This entails the parasitical cost of keeping peaker plants on standby for ever-reduced hours. That might require a state subsidy, akin to paying for a strategic petroleum reserve. But it can be done. 

The second default option is to use free electricity from excess renewable power that would otherwise have to be curtailed – at night, at weekends, etc – to produce green hydrogen via electrolysis. 

The hydrogen can be stored for long periods in Yorkshire salt caverns, one of the UK’s geological trump cards. This reserve can supply modified peaker plants equipped with hydrogen turbines for winter back-up. 

Electrolysis is expensive but the technology is tracking the same “learning curve” and economies of scale as solar, wind, and lithium batteries over the last decade. It will become dramatically cheaper. The US Energy Department is targeting green hydrogen at $1 a kilo by 2030 (a stretch). 

But relying on surplus wind and solar to make hydrogen requires keeping electrolysers idle for much of the time. There may be better uses for this power in many areas as we move to smart metres, EVs, and electric home heating. 

A third option is to create our winter back-up with nuclear power. Kirsty Gogan, head of TerraPraxis, says the best commercial sense for nuclear reactors in Britain may be to run them day and night for 80pc of the time to make “pink” hydrogen, switching to baseload power for the grid for the other 20pc when needed. 

For nuclear aficionados, I recommend her recent appearance in Michael Liebreich’s weekly podcast, Cleaning Up. The series is the best deep-dive into the economics of energy and clean-tech in the English language today. He takes no prisoners.  

Personally, I have a soft spot for small modular reactors. Rolls Royce is developing a 470 MW mini-version of today’s light water reactors, aiming to slash costs by manufacturing the components and shipping them by road and rail. It relies on nuclear supply chains that already exist. The reactors could be in service by the early 2030s.

Generation IV mini-reactors using molten salt and other advanced designs operating at atmospheric pressure may ultimately prove cheaper and more nimble, and perhaps able to dial up and down fast enough to match renewables. For now we take what we can get. 

One thing is certain, the hydrogen will not be squandered on absurdities such as piping it into homes for combustion in hydrogen boilers. It is too explosive and the tiny molecule leaks easily. Switching to such boilers would be as disruptive as installing heat pumps but an order of magnitude less efficient. Nor will it be used for cars. Too much of the energy is lost turning power into hydrogen. 

Small Modular Reactors will each be capable of producing enough power for 1 million homes at a cost of just £1.8bn apiece CREDIT: Rolls Royce

The rule of thumb is to electrify wherever possible. Clean hydrogen is precious. It will be needed for a long list of tasks with no alternative: replacing dirty hydrogen in industry, making fertilisers and green steel, for shipping and clean jet fuel, as well as for the Dunkelflaute reserve. 

In the end, the solution will be a jumble of competing technologies. The UK’s Highview Power is the world leader in cryogenic compressed air that can store energy for days in steel towers. It plans two to three plants a year over the 2020s, targeting 6 GW of dispatchable back-up electricity for up to 60 hours at a levelised cost of $100 a MWh. If it succeeds, that will plug a large hole.

There is so much creative ferment in global clean-tech that it is impossible to know what will sweep the board by the 2040s. Vast sums are being spent by the US, China, Japan, and the EU, by the world’s top universities, and by venture capital funds trying to crack the technology of energy storage. It is being cracked.

The lesson of the last 20 years is that technology moves faster than the public can keep up, and that seemingly insurmountable problems fade into irrelevance. We have the means to master the intermittency of wind and solar. If governments set the right tone, markets will find the cheapest way to do it.