Climate Week – Thoughts in my Head

More efficient energy, lowering carbon emissions, SAF.

As Climate Week in New York approaches, it makes me stop and consider where we are as an energy industry.

There are many sub-sectors I could concentrate on. One, of course, is lowering energy demand, but I will leave that for another time.

Due to my current work, I find myself focusing my current attention on:

1. How do we supply reliable energy as demand increases – primarily due to Electric Vehicles and Artificial Intelligence (AI), especially when we have limited transmission and distribution lines.
2. Are we approaching CO2 emission reductions the right way? How do we economically reduce emissions?

So, let’s start with the energy part.

Energy demand is going through the roof (EVs + AI).

People often talk about the increase in energy demand due to EV’s. That is fair, but perhaps what people think less about is the AI revolution. Every AI search you do requires 10x the energy of a Google search. The energy is needed for ‘data centers’, which are the buildings where the data is stored and processed. The energy goes to running the servers and to cooling the building.

How much energy? Data centers are expected to consume up to 8% of US energy by 2030. This is an increase of 6GW of power capacity – approximately 4x the current capacity of Miami city! We need 4 ‘Miamis’ worth of energy.

The question is where does ‘4 Miamis’ of energy come from. And this gets me thinking about how we produce energy…

Can we create energy more efficiently (is the age of fire over)?

I ask people much smarter than I “why do we burn things to create energy?” We burn gasoline in cars to ‘create’ energy, we burn gas and coal in power plants, we burn aviation fuel in planes, or heavy fuel oils / diesel on ships. It turns out that combustion isn’t an entirely efficient process.

Most combustion engines (cars, planes, ships, burning coal for power are somewhere between 30-50% efficient. We lose 50-70% of the energy we put in! And this emits C02. 

So why do we burn stuff? I think the answer is ‘we just do’. Sure, it works. But we also used to throw poop out our windows onto the street. That got rid of the poop from our homes, but I personally prefer flushable toilets.

Is it time to start the change to a different process of energy creation? Are we moving from the age of fire to the age of electrochemical reactions – basically using heat to create chemical bonds?

Is Hydrogen a viable solution to reliable and cheap energy?

And that gets us to Hydrogen. Perhaps the best accessible storer of energy we know. It can easily be converted to power, used to turn wheels, or to run engines.

This can be done in one of two ways:

1. Burn it (oops), although no CO2 emissions (slightly more efficient that conventional engines)
2. Feed Hydrogen into a Fuel Cell (which creates energy) and is up to 65% efficient (double some combustion engines)

The latter is efficient, if we could get cheap Hydrogen.

How could we create reliable, cheap, distributed Hydrogen?

Green Hydrogen could be a good, sustainable path. But, as I mentioned in my blog on Hydrogen, I worry that Green Hydrogen has become too focused on electrolysis. Electrolysis uses about 7 times as much energy to produce Green Hydrogen as the fossil energy (natural gas) that is used to produce affordable Grey Hydrogen.  Due to this inefficiency, electrolysis has had less than 2% of the worldwide market for Hydrogen for more than the last century.  Why not use other forms of renewable energy, as opposed to intermittent solar & wind, for, you know, energy?  Especially considering we need all of the energy.  

We need Hydrogen that is created cleanly, from abundant and reliable sources. We need it on both small and large scale. Of course, Hydrogen has downsides – it is flammable after all.

Grimes Carbon Tech: New opportunity to create Hydrogen in a smart way?

And then comes Grimes Carbon Tech (GCT). Imagine if we could create Hydrogen on-site and on demand from a wide range of readily available, benign feedstocks, using the same electrochemical reactions that nature uses. We could produce hydrogen as needed without the need to transport or store flammable Hydrogen. Imagine the process on a small or large scale. Imagine prefabricated shipping containers producing Hydrogen from a wide variety of available feedstocks. The system doesn’t require a grid connection – it can run on waste-heat from the users of the hydrogen alone. And they claim it to be cheap.

Cheap Hydrogen could lower costs of data centers, enable off-grid EV charging, and revitalize old coal communities.

Given the low costs proposed, GCT is proposing various use cases, such as:

1. Halving a data center’s energy cost and eliminating the need for a grid connection
2. Revitalizing old coal communities – using coal to create Hydrogen, while capturing all of the carbon
3. Low-cost energy for EV charging stations that don’t need to be connected to the grid.

So that is the energy part. And the energy sector does emit around 28% of all global CO2 emissions. But the transport sector is also working to change. So, back to CO2 emissions!

What are some key trends with reducing CO2 emissions?

Many companies are focused on reducing CO2 emissions, either by:

1. Capturing and burying underground the CO2 (only makes money through Government incentives).
2. Using different fuels that emit less CO2.  
3. Converting CO2 to another product (perhaps to serve point 2).

I won’t get into capturing and burying CO2 (known as ‘sequestering’). This generally only makes financial sense with Government incentives and the CO2 being captured being close to the underground wells where we store the CO2. Pipelines for transporting CO2 from the captured location to the wells rarely exist and the geology necessary to permanently store such CO2 is not commonly available.

Point 2 is particularly relevant to the transport sector – let me focus here on Sustainable Aviation Fuels, or ‘SAF’. Airlines have been searching far and wide for SAF, to lower their carbon emissions. Using SAF could lower their C02 emissions by up to 99%.

Sustainable Aviation Fuel: The desperate search by airlines to find it.

But here is the problem. There isn’t enough SAF, and prices are high. Many start-ups are looking at SAF, but the technology is either too energy intensive, requires a large plant at a centralized location, or it is hard to find the food waste that they need to create SAF.  As a matter of fact, the total amount of the appropriate food waste worldwide, if all of it was converted, would only produce a tiny percentage to the legislatively required demand.  If prices are too high, the airlines won’t buy SAF, and instead will continue to by normal fuel (Jet A Fuel).

GCT’s potential solution to the SAF supply: cheap and distributed SAF.

This is where GCT’s technology also comes into play. They plan on capturing CO2 and converting it into SAF. Imagine a shipping container beside a New Jersey power plant. It captures the CO2 from the power plant and converts the CO2 to SAF for delivery to Newark Airport. GCT claims that one shipping container can produce around 20 barrels of SAF per day – about enough fuel to fly from New York to Phoenix and back (a 4-hour flight each way). Containers could be stacked or located across different sites to scale production. And this is all at under $140/barrel (even without accounting for Government incentives). Government incentives can lower this potentially to below ‘normal’ Jet A fuel prices.

Look, there are many things to focus on, and GCT’s technology is one of the more exciting things I have seen in the last few years. So, I couldn’t help myself but to mention them.

GCT is raising capital from individuals to hire some team members and to develop a small-scale demonstration plant. If you would like to speak to them, please reach out to info@grimescarbontech.com.

For the avoidance of doubt, we don’t provide investment advice, and we are not a registered broker dealer. This blog is entirely for interest and general education purposes only!

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