(x) to Value — Solutions for Decarbonization
In these writings here in the past I’ve often discussed new technologies, both on the generation and consumption side, for the solutions for decarbonization. However, an equal, perhaps more important lever is to either reduce wastage or find better use of the ‘wasted’ resource. California’s success to reduce energy consumption by focusing on energy efficiency is one of the examples of the former. There are several interesting and relevant trends for the latter that are getting poised for growth.
To touch upon a couple, based on one study, in the US 229 million tons of food is either unsold or uneaten. This spoiled food is one of the leading contributors of greenhouse gases, contributing ~8% of the emissions. Converting organic waste in renewable natural gas for subsequent use in transportation or heating in one of the solutions. On a similar scale, almost 300 million tons of municipal solid waste (MSW) gets generated in the US, with the majority of it finding its place in landfills. Of this MSW several ingredients, one of the key is plastics. One of the companies I worked with in the past, PolyCycl, has an innovative technology to convert this plastic waste to industrial diesel.
I also want to talk about the wastage in renewable energy. A tremendous progress has been made in the growth of solar and wind energy over the past couple of decades, e.g. installed capacity of solar is at ~1000 GW globally. However, this growth has also resulted in undesirable outcome, energy curtailment, where the supply is in excess of demand and the kWh’s are not put to a productive use. And it’s a growing problem. In California alone, almost 150 GWh of renewable energy is curtailed per month. According to one study, just in 4 countries — Chile, China, Germany, and the US, ~6.5 TWh of solar energy was curtailed in 2018 (which seems like decades ago!). Similarly, almost 50 TWh of wind energy was curtailed in 2016 in China alone. There are also studies stating that up to 20% of wind resources are curtailed. Globally, almost 250 TWh of renewable energy assets get curtailed annually. To put that in perspective, the annual energy generation in California is 277 TWh. So, an equivalent of the entire generation capacity of CA is not put to a productive use!
There are solutions like demand response to better match supply-demand mismatch. Here, I’d like to postulate another potential use of this curtailed energy: producing green hydrogen. Green hydrogen (i.e. via water electrolysis) today is at ~$6 per kg, with energy costs as the primary cost driver (up to ~75%). Utilizing the curtailed energy in the current PEM architecture, with efficiency of ~68%, we can produce ~5 MM tons of hydrogen. This obviously is a broad stroke, and details will depend on several factors including infrastructure and end applications. But the key point is almost 10% of the hydrogen that we use globally can be produced from the energy that gets curtailed. Not only do we put this energy to better use, but also improve the economics of green hydrogen — a molecule that is projected to play an important role in several applications (e.g. cement, steel, long-duration storage) as we decarbonize.
These are just a few examples of putting resources around us to productive uses. I welcome your comments and discussions on what other examples are piquing your interest.