Greenify #16: Different Sources, One Objective: Survive The Energy Crisis!
17 June, 2022
Welcome to Greenify! A weekly newsletter providing you with 3 of the most important news and some crucial deep dives on matters such as #energytransition #decarbonisation #climatetech! We believe that a clear understanding of these topics is essential to thrive in the world of… TODAY!
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📌 Fact of the week
China’s May coal output jumped 13% vs. May 2021, amid the government’s push to boost supply 😳
Hottest news of the week…
Regulation 🗃 – Biden wants more gasoline! ⛽️
What Happened: President Biden asked major oil refineries to increase output in order to alleviate the burden of high gasoline prices on end-consumers. He defined refineries’ high margins as unacceptable in this difficult period, and declared that his administration will use all reasonable ordinary and emergency tools to increase refineries’ output. However, for environmentalists’ happiness, refineries are estimated to be already working at 90% of their capacity leaving a minimum room for output increase! 😬
Zoom Out: Oil prices have been increasing following the recent EU commitment to ban 90% of Russian oil imports by the end of 2022. However, President Biden is aware that refineries could do more to offset the high costs of gasoline to end-consumers…Last time Crude Oil was at the current price of $120 per barrel, gasoline was sold at $4.20 per gallon, against the $5+ of today, showing how refineries have increased their margins significantly! Although Biden’s call comes in help of U.S. households, who are already impacted by high inflation, it goes against the U.S. green agenda… 👎
Business 💰 - Major Green Hydrogen project has a new lead investor!
What happened: Oil & Gas major British Petroleum (BP) bought a 40%+ stake in what will be one of the largest Green Hydrogen hubs in the world. The Asian Renewable Energy HUB (AREH), located in Australia, is a project to build solar and wind facilities capable of generating 26 GW to then produce more than 1.6m tonnes of Green Hydrogen per year. The total AREH project is estimated to cost around $30bn, and the produced Hydrogen should be used to support the decarbonization ambitions of Asian countries such as Japan, the project’s potential main beneficiary. 🚢
Zoom out: As explained in Greenify #15 last week, green hydrogen is hydrogen produced by splitting H2O through electrolysis, generated from renewable sources. According to the Financial Times, this practice still represents only a 0.1% of the total 90m tonnes of Hydrogen produced every year. Furthermore, according to the IEA’s 2050 net zero pathway, low carbon hydrogen should amount to 150m tonnes by 2030 and 520m tonnes by 2050… Despite these terrible statistics, the multitude of projects such as AREH together with increased efficiency in Green Hydrogen generation leave us confident about the potential of this source of energy in decarbonizing certain industries. 🤞
Innovation 💡- Genetically modified plants can support carbon removal!
What happened: If you ever wondered how cool it would be to modify your own genes to make you extremely talented at doing something, then you are going to love this piece of news! The Innovative Genomics Institute (IGI) will begin a research program using CRISPR gene-editing technology for carbon removal. The main focus of the research is to understand how to improve the process of photosynthesis, changing plants to promote the flow of carbon from plants into roots and soils. Find out more!🧬
Zoom out: Natural based “remedies” to emission problems have been at the forefront of government’s and corporates’ agendas. As carbon credits rise, companies have found ways to offset their emissions, normally by restoring nature: for example, an airline might compensate emissions on its flights by planting trees somewhere in the world (for which you have to pay extra on your ticket), following the principle that, as they grow, trees act as carbon sinks by absorbing CO2. As these solutions become increasingly popular, we welcome any improvements in the space! 👍
Deep dives of the week…
Graph of the week – How much space does solar need?
Solar power is attracting a lot of interest and investments all over the world. Clearly, it works better in places with plenty of daylight throughout the whole year. We found this interesting diagram on twitter simplifying the problem… theoretically, a relatively small piece of land in the global context could be enough to power the world. Obviously, among others, infrastructure related issues make this unfeasible.
Source: World of Engineering, Twitter
Fund of the week - Vale ventures: Making mining sustainable ⛏
One of the main drawbacks of the Energy Transition lies in the mining of rare earths that struggle to keep up with the required pace and is often carried out in unsustainable ways. This is why this week we want to talk about Vale Ventures, a $100m fund recently raised by Vale (NYSE: VALE), one of the largest mining companies in the world, aimed at investing in Start-Ups that can help decarbonize operations across the whole mining industry. According to the consulting firm McKinsey, mines could almost fully decarbonize thanks to “operational efficiency, electrification, and renewable-energy use”. Let’s see if Vale will find the right start-ups to do so! 💪🏻
Analysis of the week – Let’s dig into a current topic: LNG! 🚢
Liquified Natural Gas (LNG) has been on top of the news recently, as it is regarded as a good substitute for Russian gas. In fact, Europe has increase its imports and planned multi-billion investments in Gas and LNG infrastructure under the REpowerEU #2 plan. Therefore we wanted to give you a brief overview of this energy source:
What is it? 🧪
As the name explains, LNG is simply liquified natural gas. Natural gas is abundant and affordable, but often extracted in locations far from where it is most needed, and transporting it through pipelines may sometimes be inconvenient. Luckily, LNG overcomes the obstacle by providing a flexible solution: by cooling natural gas into a liquid, it shrinks its volume by roughly 600 times, making transportation easier and cheaper over long sea distances.
Why is it useful at the moment? 🤔
Thanks to its flexibility, LNG is proving to be the most convenient substitute for Russian gas. In fact, while pipelines limit diversification only to the countries connected to the European Grid, and building new pipelines is not feasible in the short term, LNG is transported by ad-hoc ships, allowing for flexibility. Therefore, having a good amount of LNG terminals improves energy security.
How sustainable is it to increase LNG imports? 🔎
LNG is roughly as sustainable as natural gas. So the question should be: how sustainable is gas? The short answer is: worse than renewables, better than any other fossil fuel. Furthermore, although LNG requires infrastructure, these could be converted to receive green hydrogen in the future, as discussed in Greenify #11. This potential reconversion to import green fuels makes LNG infrastructure more sustainable than previously thought! 👍