100+ questions across energy transition

17 min read
Feb 18, 2022
100+ questions across energy transition

As many of you know, this year is the year of learning for me…and I had to think: what better way to start off this journey than posing some questions I’d like answered?

Deciding Scope
I struggled a bit before writing this post to decide what part of this broader climatetech ecosystem I’d like to cover. I have an energy tech background – which means I looked at technologies that influence what we now consider the energy industry. However, that set of technologies is rapidly changing. Technologies like soil-based sequestration, chemicals manufacturing, waste recycling and WTE, hydrogen jets, HVAC, insulation, etc. have moved into the “don’t care” to “care” bucket very rapidly for traditional energy players (meaning utilities + oil and gas companies). And that’s because carbon is carbon is carbon. What happens downchain or upchain matters…and is increasingly the responsibility of the parties across the whole chain. Selling product into market or buying product from a vendor is no longer a transaction void of responsibility. The energy industry should care where its molecules and electrons are going and how it can help get those molecules and electrons into better places, in addition to producing better molecules and electrons in the first place.

Visualizing FEST
I think Bill Gates does a great job in How to Avoid a Climate Disaster breaking down what we do from an energy usage / emissions perspective. He separates it into making things, plugging in, growing things, getting around, and keeping warm and cool, or in other words:

  • Food and ag (19%)
  • Electricity & heating / cooling (34%)
  • Stuff (31%)
  • Travel and Transport (16%)

I call this the FEST framework. Like a FESTival but for seven billion people. One that needs food, beds, ways to get around, sanitation, a clean up crew, and for everyone to be happy and healthy. But one that also only has a limited amount of time, a rapidly growing number of “attendees,” and a planning committee with zero experience doing this well. Sound familiar?

Which leads to the reason why I like this framework so much. What it does so well is allow us to break down how our everyday activities are affected by what technologies we buy, support, develop, invest in, etc. Other breakdowns separate by energy, industry, agriculture, and other abstract categories that don’t mean much to me immediately…I get especially confused with “Industry.” What the heck does that cover? But I know exactly why I care about access to food, electricity, stuff, and travel. With FEST, the impact of tech on living is clear.

There are of course limitations to breaking things down in this way. The most apparent is that the supply chains are still not clear. For example:

The categories get especially muddling when products with complex supply chains like cars or semiconductors are considered. But overall, FEST is a manageable way to understand and chart emissions impact from various sectors. And sets itself up nicely for a FESTivus-themed conference later this year (if anyone has any desire to fund such a conference, please let me know. I have lots of ideas but no money).

Onto the thoughts and questions...

[su_accordion][su_spoiler title="Food and Ag (19% emissions, 9.7 Gt)" open="no" style="default" icon="plus" anchor="" anchor_in_url="no" class="my-custom-spoiler"]

This is admittedly the category I’m least versed in. I’m a huge foodie and consider eating one of my hobbies. But what I’ve come to appreciate only recently is the power of industrialism that has led to the ability to mass-produce almost anything edible, even things as niche as pumpkin spice cookie butter and pickle-flavored popcorn. In the land of excess, we enjoy only spending 6% of our income on food, a fraction of what other (even developed) nations spend. The hidden cost of course is that our emissions footprint is a lot higher as well.

It seems that the key levers to reducing emissions in this category are:

1. Improving meat production efficiency (shortening distance & # of steps between production and the consumer, replacing livestock with meat alternatives, cleaning up excess waste in meat production)

  • How efficient are current anaerobic digesters (what benchmarks are used)?
  • What technological improvements are in the works for improving digester efficiency?
  • What are the current leakage rates of NO2, biogas, methane and other emissions from farm equipment and systems?
  • How do we incentivize smaller farms to implement good waste management systems?
  • How much of emissions from meat production is from distance to consumer?
  • How is veganism / vegetarianism around the world and how do the adoption trends correspond to livestock emissions?
  • How is veganism / vegetarianism distributed across age groups?
  • How does consumer labeling of emissions impact affect consumer behavior around food purchases?

2. Improving fertilizers and their usage (using less excess fertilizer via smart fertilizer systems & soil sensing, creating and using new fertilizers that can actually fix nitrogen or release nitrogen gradually, creating plants / “climate crops” that can capture excess fertilizer and/or excess emissions)

  • What kinds of “climate crops” exist today? What prevents them from scaling in the market?
  • What kinds of smart fertilizer systems are in use today and how prevalent are they? How much more expensive do they make the end crops?
  • How scalable are “climate crops” and will there be consumer appetite to pay for more carbon negative crops?
  • Are there naturally more carbon negative food products we can encourage consumer consumption of?
  • What is the average time to adoption of a new fertilizer? What testing and certification processes does a new fertilizer have to go through?
  • How are advances in microbiology influencing fertilizer production?
  • What is the rate of nitrogen fixation by new fertilizers and how much of an ultimate emissions impact would they be able to make at scale?
  • How much interest is there by fertilizer producers in sourcing clean ammonia and how much of a premium would they be willing to pay?

3. Reducing land usage (vertical farming / hydroponics, regen farming, reforestation to build land back up)

  • How much potential do nature-based carbon solution projects have to offset the land usage from our agricultural systems?
  • How much of a time lag is there between release and offset if both projects are started at the same time?
  • How much of farming will move towards urban environments with vertical farming?
  • How distributed will vertical farming be (households, neighborhoods, districts, etc.) and how will food purchasing behavior change with this shift?
  • What are the different flavors of soil restoration / regeneration and their relative impact?
  • How will climate change and unpredictable weather patterns affect fixed-site farming? Will there be a push towards more mobile farming practices?
  • How can the world better insure farmers against crop devastation due to climate change?
  • What mechanisms exist to incentivize regen farming practices?
  • How much of the market are regen farming offsets and how are they priced relative to other offsets?
[/su_spoiler] [/su_accordion] [su_accordion][su_spoiler title="Electricity & Heating/Cooling (34% emissions, 17.3 Gt)" open="no" style="default" icon="plus" anchor="" anchor_in_url="no" class="my-custom-spoiler"]

Electricity and indoor climate control forms the backbone of much of the energy transition discussion. The trend towards mass electrification is a huge benefit for transition because it concentrates the points of potential emissions reduction to the supply side, which is much more controllable than the demand/consumer side. Imagine if we had little generators that powered our phones instead of plugging them into the wall…and imagine how much of a pain it would be to switch out each consumer’s generator for a more efficient generator every few years.

Instead, we have the electrical grid, which, outside of transmission and distribution losses, is a virtually emissions-less form of power delivery. This standardization of energy consumption has allowed us to focus our efforts on generation improvements and make huge improvements to the overall power footprint without massive consumer disruption (well, outside of the occasional power outage…).

It seems that the key levers to reducing emissions in this category are:

1. Improving power generation (making existing clean power sources like onshore solar or wind more efficient, lowering the cost curve for not yet commercial clean power sources like geothermal, offshore wind, nat gas + CCUS, etc.)

  • What new wind turbine technologies not yet at scale (HTS turbines, VAWT, counter-rotating blades, etc.) and how much land / resources can we save by accelerating scale up of these technologies?
  • What retrofit opportunities are available for both solar and wind farms for new technologies?
  • What recycling opportunities currently exist for solar and wind parts and at what cost?  
  • How much value can be captured by the secondary market for solar and wind parts?
  • What is the practical limit for deploying EGS at scale (e.g. how many wells can be drilled across what timeline, step up from supercritical fluid, etc.) and how does that compare to the current development timeline for solar and wind?
  • What retrofit opportunities exist for current oil and gas wells to transition to geothermal wells (e.g. transforming into closed loop)? And how quickly can this be deployed?
  • What are the current technological limitations for deploying ocean / wave energy at scale? How do costs at the theoretical level compare to offshore wind at the theoretical level?
  • How do the different forms of marine power generation (offshore wind, offshore solar, wave energy) compare in suitability for certain water regions and impact (measured by emissions + biodiversity impact)?
  • How much can CCUS turn existing thermal power generation clean?
  • What ongoing resources are needed to keep CCUS on thermal power gen (coal and nat gas) net negative or neutral carbon? How will the lifetime cost (both financial and environmental) of these resources compare to retirement and replacement by renewable energy sources (and both of their lifetime costs)?

2. Building grid dynamism and resiliency (optimizing the grid for more distributed, intermittent power sources + changing weather patterns, improving utility scale and long duration storage, upgrading transmission and distribution networks)

  • Where are the tightest bottlenecks created by lack of sufficient transmission / distribution for new power generation projects?
  • What upgrades are possible to accomplish with current transmission / distribution infrastructure and RoW?
  • How much new land is needed for new transmission / distribution assuming rapid deployment of conventional renewable energy?
  • What current hardware limitations are there for deploying grid optimization software?
  • How much of grid optimization will be done behind the meter vs. in front of the meter?
  • How do load forecasting models interact with weather forecasting models?
  • How do new development needs currently get forecasted and what types of models are industry standard?
  • How does storage need to upgrade with a continuously upgrading set of renewables assets?
  • How does the cost of deploying non-battery storage (like thermal, gravity, compressed air, and pumped hydro) compare when scalability is given time value (i.e. scaling faster is worth more from a “net zero by x” standpoint)?
  • How does the cost of new non-battery storage compare to non-battery storage retrofits compared to the forecasted cost of batteries?
  • How important will modularity be in deploying storage, especially in the face of a continuously changing energy generation picture?

3. Decentralizing energy to improve resiliency and access (developing and deploying microgrids, transforming building-level access to power, improving building energy efficiency via new cooling/heating and smart devices)

  • How will the value of real estate fluctuate with microgrid potential?
  • What new financial mechanisms can be used to incentivize the adoption of energy efficiency devices and improvements?
  • What new financial mechanisms can be used to incentivize connections between private microgrids and/or private clean energy assets?
  • How will the ownership of clean energy evolve between leaseholder and landlord as the differences in energy savings becomes more significant, especially in older properties?
  • How will consumer-to-consumer energy trading evolve and what is preventing mass deployment?
[/su_spoiler] [/su_accordion] [su_accordion][su_spoiler title="Stuff (31% emissions, 15.8 Gt)" open="no" style="default" icon="plus" anchor="" anchor_in_url="no" class="my-custom-spoiler"]

“Stuff” is by far the most complicated category, as it encompasses manufacturing, construction, and production of everything we use in our day-to-day lives. This includes household goods, packaging, fuels, chemicals, clothes, furniture, vehicles, machines, electronics, houses, offices, bridges, roads, etc.

In terms of accounting for emissions, this category has three distinct sources of emissions: electricity* (22% of industrial energy use, ~34% of emissions or 5.2 Gt CO2e), heating (66% of industrial energy use, ~34% of emissions or 5.3 Gt CO2e), and feedstock (remaining 12% of industrial energy use, ~32% of emissions or 4.9 Gt CO2e). If you break that down by sector instead, iron & steel, cement, chemicals and fuels (including oil and gas), and mining make up ~65-72% of emissions. For those top “heavier” industries, heating makes up even more of the equation, 42% of emissions by some estimates.

Because of this concentration of emissions around electricity and heating, industrial decarbonization has been closely linked to new ways of producing electricity and heating in the “E” sector. We see this prominently in the emergent use of renewables in hydrogen production and “lighter” industries like paper and pulp.

There continue to be challenges in using intermittent renewables for heavier industries though. Industries like steel and cement require high amounts of continuous heat and need it reliably available in order to maintain process efficiency and reduce downtime. Because of this, the practical alternative energy sources for industry are more so dependent on the development of alternative fuels, hydrogen, and biomass.

The final third of emissions comes from feedstock and process – the emissions from using fossil fuels in an “imperfect” reaction (like how steam methane reforming produces a mixture of waste products that aren’t well managed) or from leakage in the system. Attaching CCS onto a flue gas stream with a dependable concentration and pressure of CO2 and implementing some good leakage detection/prevention practices can clean up existing systems. Replacing feedstock with something else is a tougher challenge, but one that may be the easier route for industries where CCS is not cost effective.

Which brings us to the final twist in the “stuff” category: the potential to be able to actually store or sequester carbon in things, creating useful objects from a harmful waste product + replacing an existing emissions positive manufacturing process with a neutral or negative one – two birds with one stone. CO2 is already being stored in the form of carbonates in cement, chemicals like ethanol, carbon black, and plastics.  Although elegant, the time and resources needed to scale up completely new manufacturing processes will mean that these solutions will face a harder pathway to capturing market than comparable retrofit solutions, unless there is a distinct financial advantage.

It seems that the key levers to reducing emissions in this category are:

1. Developing dense and reliable alternative sources of energy to provide industrial electricity and heating (co-locating renewable energy with industrial centers where it can be practically used, commercializing biomass, hydrogen, nuclear SMRs, and biofuel solutions for industrial energy)

  • How will energy startups and industrial companies partner to finance the colocation of technologies likes CCUS, hydrogen, etc. onto existing industrial sites?
  • Can industrial waste be used for on-site heating and how prevalent is this practice?
  • How much lead time is necessary to change out a blast furnace?
  • How much biomass is available to provide industrial heating and will the dependence on biomass or other non-traditional heating sources move industrial sites closer to these locations?
  • How do biomass, hydrogen, SMRs, and biofuel solutions for industrial heating compare from a cost, modularity, interchangeability, environmental impact, and scalability perspective?
  • What’s the proximity of industrial sites to grid energy and what bottlenecks exist to use electricity for industrial heating (or in high heat processes, is it the efficiency of electricity to heat itself)?
  • How much electricity is purchased vs. produced on-site for industrial operations and how much does this vary by product produced?
  • What is the frequency of plant downtime due to lack of electricity or heating and how much does this cost the operator?

2. Making process adjustments to reduce energy usage or capture emissions (replacing energy-intensive parts of the process like separations with lower energy versions, pursuing energy efficiency initiatives, implementing CCUS and good waste management / product handling practices to reduce unwanted leakage)

  • What incentives do industrial companies have to continuously improve energy usage?
  • How much can energy efficiency reduce the need for electricity in industry?
  • What possible alternative processes for products that require heavy heat (like iron / steel) can reduce the need for heating and energy altogether?
  • How much emissions reduction can we achieve by locating industrial production closer to demand centers?
  • Does it make more sense to move industrial production closer to energy sources?
  • What public and private financial mechanisms can give credit for lower-CI pathways to produce industrial products (like LCFS for fuels)?
  • How much of emissions is due to poor waste management across different industrial sectors?
  • How much of emissions is due to product / fuel leakage across different industrial sectors?
  • What is the definitive environmental impact of mining for additional clean energy components and what new extraction technologies can help alleviate some of this impact?
  • What is the potential emissions reduction associated with relocating more manufacturing and industrial production to first world countries?

3. Aggressively pursuing the use of “clean” feedstocks like CO2 or H2 in creating products and materials

  • How much can developing CO2 to value pathways drive up the value of carbon?
  • Are there enough products (now and under development) that utilize carbon black to drive CO2 pricing?
  • What breakevens do these future products require in order to scale?
  • What industrial processes could benefit from clean hydrogen (either liquid and gaseous)?
  • What chemicals depend on ethanol and methanol as feedstocks and how do certain products change in price with a green premium?
  • How much of a premium does the use of clean ethylene and other petchem feedstocks add to critical-to-life plastics?
  • What kinds of marketplaces can help facilitate more transparent feedstock selection and enable CI-aware pricing?

*It’s not clear to me how much of electricity here overlaps with the E in FEST and if we are double accounting by including it here as well. From what I can tell from Bill Gates’ numbers, it includes the electricity used in industry even though, at least in the US, the vast majority of manufacturing electricity is purchased. Please let me know if anyone has a definitive breakdown of this…

[/su_spoiler] [/su_accordion] [su_accordion][su_spoiler title="Travel & Transport (16% emissions, 8.2 Gt)" open="no" style="default" icon="plus" anchor="" anchor_in_url="no" class="my-custom-spoiler"]

Travel and transport, as the most dependent category on oil and the most ostensibly emitting consumer-facing portion of the pie, has been at the crux of the energy transition debate since cleantech 1.0. Electric vehicles have come a long way from being an eccentric consumer choice to actually being the sexier transport option for most of the younger generation. And of course, with Tesla paving the way for mass production, the consensus is that transport disruption is almost inevitable. It’s not a matter of “if” but “when” and even the most stringent of forecasts have EVs taking more than 1/3 of EV sales by 2050.

Travel emissions can be divided into four main categories: passengers on the road (45-53% of emissions), freight on the road (25-29%), aviation (9-12%), and maritime (11%). EVs remain the dominant solution for passengers on the road, while a mixture of EVs and hydrogen FCEVs can cover road freight. Aviation and maritime each have a spectrum of solutions between electric, hydrogen / ammonia, and sustainable fuels.

I’m not a car geek…and I suspect I will never be a car geek. I drive a 14-year old Acura with a stuck passenger side window and side mirrors that refuse to adjust properly. But even I was excited to test drive a Tesla earlier last year. The constraining factor to purchasing one was (and still is) lack of charging infrastructure in my apartment. Which brings us to the root of the issue with road travel disruption: the infrastructure bottleneck.

Because of current charging times (a few hours to 20 minutes depending on charger type), charging infrastructure must go where consumers spend a significant portion of their time, which means more deployment to homes, offices, and grocery stores. Charging infra will be way more distributed than our current fueling network, with deployment dependent on individual building and business owners and their policies. There’s also just going to be a lot more of them. There’s an estimated 20 million chargers needed in the US by 2030 vs. est 640,000 today vs. est. 1.2 million gas pump connections. That’s a lot of installation, maintenance, and potential points of failure that I suspect will be a growing annoyance for EV owners. As anyone who has spent time with chargers knows, there’s wide variability between charger quality. It’s not uncommon to drive up to a supercharger to find that a few of the ports are non-functioning. We’ll solve that problem with quality control and better maintenance networks, but it’ll take time and experimentation.

Outside of EVs, hydrogen and sustainable fuels drive a large part of the technology conversation in this category.  Finding dense (either on a volumetric or gravimetric basis or both) sources of energy that can be easily stored and transported is especially critical for ships and planes. I’m very long hydrogen for two main reasons: 1) as the simplest molecule in the universe, hydrogen lends itself to being produced in dozens of ways from many different inputs and it’s only a matter of (short) time before clean hydrogen production becomes cost-effective and widespread 2) fixing the volumetric density issue will not take an unforeseeable technological breakthrough – many companies are already lowering the cost of liquefaction, new metal hydrides, and on-site production.

It seems that the key levers to reducing emissions in this category are:

1. Deploying charging infrastructure safely and effectively (developing new fast chargers, building better maintenance and monitoring systems around chargers, creating new incentive structures for building owners, optimizing load and charging schedules for charging networks and EV fleets)

  • How will decentralized charging affect consumer travel behavior?
  • What incentives will real estate and commercial business owners have to install charging stations?
  • How will charging stations get retrofit (or will they) with new charging technology?
  • How will the installation of charging stations affect the need and sizing of microgrids in the area?
  • Will chargers continue to be owned by building owners or will they get consolidated in the future?
  • What business models for charging infrastructure companies will be prominent 5 years from now (e.g. direct sales, charger financing, owner-operator)?
  • How can state and local codes get standardized to better implement charging infrastructure?
  • How will electricity trading between buildings affect the deployment of charging stations?
  • How will the need for charging stations require upgrades to electrical infrastructure within buildings?
  • How will fleet charging systems work in conjunction with charger networks to dynamically distribute electricity load?
  • How will service networks develop to effectively maintain charging infrastructure and how much of it will be handled and paid for by the building owner, charging network, or customers?

2. Creating energy dense alternatives for heavy freight, maritime, and aviation (producing cheap and clean hydrogen with logistics considered, developing neutral or negative sustainable aviation fuels)

  • What retrofit opportunities are there for older ships and planes?
  • What recycling opportunities are there for older ships and planes in first world countries?
  • How will the need for drop in fuels compete with the need for emissions-free fuel use (e.g. replacing engines with fuel cells)?
  • How will hydrogen production be optimally located to serve the needs of maritime, aviation, and heavy trucking?
  • How will the ability to move certain operations into smaller, electric vehicles (moving from vessels to AUVs or jets to drones) affect the need for bulk transport (and thus the need for fuels)?
  • How will the hydrogen/ammonia pricing for marine fuel compete with the pricing for land freight, chemical feedstock, and industrial heating?
  • How will airlines and shipping companies be incentivized to pay for lower CI fuel?
  • How much differentiation will there be between SAFs and how much will the market tolerate in terms of differentiated pricing?

3. Transitioning vehicles that don’t burn cleanly to EVs or clean-burning setups (retrofitting cars and trucks with fuel cells or electric drivetrains / powertrains, incentivizing early retirement of older, dirtier forms of transport with clear plan for recycling parts)

  • What’s the emissions reduction associated with preventing mass retirement of older vehicles?
  • What recycling opportunities are there for older cars and trucks in first world countries?
  • How much will retrofit be part of the transportation decarbonization picture and who will be performing the retrofits (OEMs, third party specialists, local maintenance shops)?
  • What is the lifespan of an electric vehicle excluding battery replacements?
  • How many consumers will eschew a car altogether in the future in favor of bikes / scooters (and how much of a dent will that make on emissions from this category)?
  • How will desired consumer features like autonomy be affected by choice of fuel / fuel consumption setup?
[/su_spoiler] [/su_accordion] [su_accordion][su_spoiler title="Bonus thoughts and questions" open="no" style="default" icon="plus" anchor="" anchor_in_url="no" class="my-custom-spoiler2"]

Several questions that affect all four of these areas:

  • How will the relationship between startups and strategics continue to develop?
    1. Will strategics need to invest earlier and how much of the portfolio should be dedicated to venture vs. traditional corp dev?
    1. Will there be more standardization of partnerships between strategics and startups?
  • What kinds of creative capital are available for startups in this area?
  • How will our definition of “energy” change?
  • How will companies recategorize in the face of a more interdisciplinary universe?
  • How much of recycling should be localized to maximize reductions benefit and prevent carbon leakage?
  • How will companies manage Scope 3 emissions and how much will that management influence supply chain choices?
  • How will offset trading manifest and how many marketplaces or exchanges will the market need? How will they differentiate themselves?
  • How will the time value of the offset be used to price the offset?
  • How will carbon pricing develop to reward consumer behavior as well as corporate behavior?
  • How will the implementation of smart contracts drive supply chain transparency and vice versa?
  • At what scale and using what scenario analysis in offset qualification does additionality become immaterial?
  • Will we have complete standardization of carbon accounting up to a certain point and what will differentiate certain carbon accounting software packages?
  • What will be the impact on energy consumption of technologies like metaverse, quantum computing, autonomy, etc.?
[/su_spoiler] [/su_accordion]

Would love any thoughts / comments / answers / more questions to add to the list 😊

To see a larger version of the FEST map, please click here.