Greenify #53: Regulation fostering innovation
March 10, 2023
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📌 Fact of the week
In 2022, UK’s coal consumption dropped to the lowest level, relative to electricity generation, since 1757. It accounted for only 2% of the nation’s electricity generation.
Hottest news of the week…
Regulation 🗃 – When regulation meets innovation
What happened: In a recent interview with the MIT Technology Review, ARPA-E’s new director Evelyn Wang discussed the agency’s mission in transforming the energy space. ARPA-E is an agency within the US Department of Energy whose mission is to fund projects in advanced energy research to favour the inevitable green transition. Evelyn discussed the agency’s role in focusing on high-risk, high-reward technologies, in some instances transforming a prototype into a commercialized technology. Among the technologies discussed in the interview were marine carbon dioxide removal and moving the grid underground. 💧
Zoom out: Regulation is normally perceived as a barrier towards high levels of innovation. However, when it comes to the green transition, we’ve seen quite the opposite, where favourable regulation has given the initial push towards innovation. Examples lie within Europe and the U.S., where programs such as the Industrial Green Age/RePower EU or the Inflation Reduction Act have provided several billion dollars of funding to “green” companies, or have given out subsidies to consumers in order to generate higher adoption of green habits (e.g. electric vehicles, heat pumps etc.). 👮
Business 💰 – EDF to extend the life of nuclear plants in the UK
What happened: The recent energy crisis convinced Electricite de France SA, most commonly known as EDF, to keep two “old” nuclear reactors in the UK running for other two years. The two plants should have been switched off in 2024, but the current situation, which led to reserve coal plants being switched on in absence of wind, made the power company extend their lifetime until 2026. EDF, which runs 5 nuclear reactors in the UK, has increased its nuclear output in the country by 4% in 2022, in contrast with the lower output generated in France, where some reactors have been inactive in 2022 due to maintenance work. 😬
Zoom out: Despite these two extensions, the number of reactors operated by EDF will be decreasing in the next years, and, more generally, the European nuclear renaissance that some were expecting has not started yet. Withing the EU, the situation is even worst: currently, the EU generates 25% of its electricity from nuclear, of which 50% is generated in France. However, between now and 2030 nuclear capacity is expected to decrease, as more and more reactors will be shut down due to end of life/political reasons. Will the political debate on this source of electricity ever end? 🤔
Innovation 💡 - The largest hydrogen fuel cell to ever fly
What happened: An hydrogen-fuelled aircraft flew for 15 minutes last week, while equipped with the largest hydrogen fuel cell to ever fly! Hydrogen fuel cell is a system that transforms hydrogen in water and electricity, which can be then used to power an electric engine! Unfortunately, only one of the two engines was hydrogen powered, while the other one was running on standard jet fuel for safety reasons. However, the aircraft’s pilot declared that at one point during the flight the jet was flying almost entirely on fuel cell power! 🛫
Zoom out: Aviation is an energy intensive sector, with emissions making ~2.5% of total global emissions. If this seems little to you, remember flying is a service used by a small fraction of the world’s population. As a consequence, there are various companies trying to decarbonize this sector by making Sustainable Aviation Fuels (SAFs). Biofuels are the most developed and utilized technology, although they only represent a partial solution, as emissions are reduced and not brought to zero. Green-hydrogen fuelled aircrafts could be a complete solution to the problem as it would involve zero emissions, however it comes with numerous challenges, mainly safety related. 🤞
Deep dives of the week…
Chart of the week - Nuclear to the rescue
There is no better chart to advocate for nuclear’s utility than this one. Nuclear is considered a zero-emissions source of electricity, and throughout the years it has avoided a lot of emissions by generating electricity that would have otherwise been generated by burning fossil fuels. The cumulative amount is more than 60 gigatons of CO2, roughly equivalent to two years of emissions at 2021 levels.
Source: IEA
Company of the week - Fervo Energy: powered by the Earth
Normally, geothermal involves extracting heat from below ground and then using it for heating/cooling or to generate electricity. Fervo Energy, which received more than $180 million in funding, is innovating this process by using wells as an underground battery. How? They can also reverse the process, by pumping water underground, store it as the water’s pressure increases, and eventually release it when needed.
For context, geothermal energy has a huge potential. According to scientists’ estimates, if the U.S. could capture 2% of the thermal energy available two to six miles beneath its surface, it could produce more than 2,000 times the country’s total annual energy consumption. 🌍
Analysis of the week - Elon’s complete residential offering
Source: Bloomberg
When last week Elon Musk announced Tesla’s potential venture into heat pumps, many raised their eyebrows. However, if you look a little close to what Musk is trying to do, you’ll realize this actually makes sense. Why? Because Tesla’s offering includes:
1. Solar roofs
Tesla currently sells solar energy systems which can be installed in your home’s roof, giving you ability to power your house with solar energy, when required. ☀️
2. Powerwall
This is a compact home battery working together with the solar roof by storing the energy generated by it and using it when necessary. 🔋
3. Electric vehicles
Little explanation needed here. 🚗
But how do heat pumps fit then? The idea here is integrating all of your Tesla products together. You self generate electricity needed by the heat pump, and ultimately you can charge your EV easily and at any time.
👋 See you next Friday, for the best sum up of this coming week!
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