The Energy Transition Ain't Happening: "Clean Fuels"

Come here for the latest news on how the so-called “energy transition” is grinding to a halt. No amount of government handouts can make this ridiculously uneconomic fantasy work. My last post on the subject, on July 20, reported on the collapse of a large “green hydrogen” project in Australia, with the stated loss of an investment of about $2 billion (Australian) (equivalent to about $1.3 billion U.S.).

It seems that that one was just the tip of the iceberg. Today’s Wall Street Journal has a substantial roundup of the financial status of a half-dozen or so so-called “clean fuel” projects. The headlines from the print and online versions tell you what you need to know. In the print edition (page B3) it’s “Clean-Fuel Startups Begin to Fizzle Out.” Online, it’s “Clean Fuel Startups Were Supposed to Be the Next Big Thing. Now They Are Collapsing.” As the headlines indicate, pretty much all of these “clean fuels” ventures are failing. Who could have guessed?

The Journal’s label of “clean fuels” is used to cover two different categories, one being biofuels, and the other being so-called “green hydrogen” (the stuff produced by electrolysis of water using electricity produced by wind or sun). The biofuels category appears to include such genius ideas as making fuel for airplanes or ships out of used cooking grease. Whatever you might think of that idea, these are still carbon-based fuels, and it’s not clear to me at all why they are supposedly “cleaner” than other carbon-based fuels like petroleum or natural gas.

Hydrogen, on the other hand, offers the promise of providing energy for planes, trains, ships and automobiles free of the dreaded “carbon emissions.” Just hook up some solar panels or wind turbines to big electrolyzers and watch the stuff bubble out of the water virtually for free! The badly misnamed “Inflation Reduction Act” made billions upon billions of dollars of subsidies available for these kinds of projects. Surely the successes should be rolling forth one after the other by this time.

It turns out that no matter how many subsidies the government doles out, nobody can make this “green” hydrogen stuff as cheaply as natural gas can be produced by drilling into rock.

One of the big green hydrogen startups is called Plug Power. The Journal quotes its CEO, Andy Marsh:

“The excitement of the early days has not lived up to the hype,” said Andy Marsh, chief executive of Plug Power, a startup that recently opened one of the country’s first plants making green hydrogen, a potential replacement for fossil fuels in industries such as steel making and chemical production. Shares of Plug Power have tumbled more than 90% since the passage of the U.S. climate law two years ago.

Well, at least they’re not bankrupt — yet. You do have to wonder how Mr. Marsh could qualify to be a CEO of such a company and raise hundreds of millions of investor dollars without ever crunching the numbers to realize that green hydrogen could never be economical. Could it be that his business plan all along was to pay himself a big salary out of the investors’ funds and then walk away when the inevitable bankruptcy came?

Here are a couple of paragraphs from the Journal summarizing the overall state of the industry:

Many clean-fuel projects have become money pits, in part because of the great amounts of power they need. High interest rates, supply-chain disruptions and expensive power-grid upgrades have driven up electricity prices. . . . “The only way to fix it is by lowering the cost of green electricity,” said Andrew Forrest, one of the most vocal advocates of hydrogen.

Wait a minute. Andrew Forrest — where have we heard that name? Oh, he is the Australian tycoon who goes by the name “Twiggy.” He’s the head of the company Fortescue, and was the subject of my July 20 post as a result of the collapse of his big Australian green hydrogen project. The Journal goes on to some detail about “Twiggy’s” ongoing green hydrogen plans:

Forrest, the billionaire founder of Australian iron-ore giant Fortescue, said his company’s 2030 hydrogen production target now looks unrealistic. Fortescue is planning to produce its own clean power to make hydrogen in Australia and is considering doing the same in Arizona.

But somehow the Journal fails to mention the failure of Forrest’s big Australian project. Could it be that they interviewed him a month ago, before that happened?

So the odds are that nobody will ever be able to make these “clean fuels” economically. The consequence:

Without clean fuels, emissions at many companies are expected to keep climbing, threatening U.S. and global climate targets. Industries including aviation and shipping are counting on the new fuels because wind and solar power and batteries can’t meet their huge energy needs.

UPDATE, August 20: Commenter Pablo Honey suggests that it might be interesting to look at the financials for one of these “clean fuels” companies. Here is the 2Q 24 earnings release for Plug Power, just out on August 8. Some key figures: revenue — $143.4 million; “earnings” — net loss of $262.3 million.

Margins: “The Georgia plant's increased production capacity and strategic price increases across the hydrogen product portfolio have significantly improved hydrogen margins.” So they are increasing prices from levels that were already a multiple of the price of natural gas for equivalent energy content. Good for them if they can get someone to pay, but that inherently means that their market is limited to buyers who either need hydrogen for its non-energy properties (i.e., fertilizer) or ones who are willing to forego profit out of religious devotion to “decarbonization.”

Government handouts: “Plug Power became one of the first companies to leverage the PTC [Production Tax Credit] for its liquid hydrogen plant in Georgia, optimizing financial performance and enhancing shareholder value. . . . Plug Power is progressing with the DOE loan, which aims to support the expansion of its green hydrogen initiatives and infrastructure for up to six sites.” Great — it’s another Solyndra in the works.

This guy doesn’t or refuses to grasp the basic reason humans need to move as rapidly as possible to forever energy sources. I will use small words there are 8 BILLION humans and climbing on this planet. There is more middle class in China than the whole population of North America, with India having a growing and similar number. Every one of them is demanding access to middle class EU or better energy consumption levels. Africa is another billion plus people all of them demanding energy as well.

It is mathematically impossible for all 8+ billion to live at even EU levels given our current energy systems. No you cannot drill baby drill , nor is coal going to work for anything longer than a few decades if all 8 billion are allowed to burn like drunken sailors.

Humans have been blessed with 400+ million years worth of fossil sunshine that we as a species well 5% of the population has burnt out half of that endowment in just under 200 years. Clearly that is not sustainable. It is the very definition of unsustainable. Do not let the very real issue of resource depletion and resource management be hijacked by the climate commies as co2 they are not the same. Climate commies see a means to take political power. That has nothing to do with a vastly overpopulated planet that doesn’t have the resources for anything longer than a few decades to support 6 billion let alone 8+ at EU levels of energy consumption.

What political leaders are afraid to admit the fact that in order too raise billions up in energy consumption the developed world has to use less a lot less so the other billions can use those sources it’s not AND it’s OR with our current energy systems. This is political suicide so the world powers the people really in charge the lens with actual money and power have all gotten into bed and go along with the co2 angle because it is a very effective means to limit developed world consumption while shifting those to the other billions. This was don’t to avoid nuclear war over resources that is what has decided.

The alternative is to use the blessings of fossil sunshine to move to energy that multiply those by 100s up too thousands of times the initial energy investment. Case in point natural gas you can burn it once via a turbine to the sky and it’s gone forever. The alternative is to take the same BTUs of natural gas and fire up a steel mill and concrete plant. You then use those materials which you invested one unit of fossil sunshine into and build a nuclear power plant with those. Then those one unit of fossil sunshine will over the next 80 YEARS make 24/7 power to the tune of nearly 2000 times the energy invested vs energy produced. So the choice is burn once and it’s gone forever or spend more and get 2000+ times back. Steel and concrete can be recycled so the EROI goes up not down in that case. Same natural gas can be used to refine Silicon for solar panels that will return 25 to 50 times as much energy invested in them 100+ in the Sahara, wind is 40 to 100 to one depending on the wind class. Humans must use our energy reserves to move as rapidly as possible to nuclear,geothermal,solar,wind and biomass or the crash and die off is going to be biblical when not if 8 billion burn out every last scrap of coal,oil and gas to the sky without the infrastructure to replace it.

The spend more part is the issue. Someone is going to have to fund the transition to forever energy sources and the boomers and late GenX just want to kick the can down the road while benefiting the most from all the already burnt fossil sunshine. Some generation/s is going to have to lower their standard of living until the transition is complete and then everyone benefits. Same for liquid hydrocarbons you can burn them once to the sky or use them to make chemicals ,fertilizer ,lubricants. 8 billion needs lots of food, chemicals and plastics.

There is a transition coming like it or not it will happen by choice with a good enough standard of living for 8+ billion or by force when the resources run low not out but low once that happens wars are inevitable they will be nuclear as the only way for a people of 350 + 500 million to take on 3 billion is with nukes. Great way to remove some eaters from the biosphere though. Doesn’t have to be that way we have more than enough resources left right now to massively build out nuclear power, with huge amounts of solar everywhere there is decent sunshine. The global North has huge wind fields there is no shortage of energy there is only the technical issue of capture and storage. Synthetic fuels or chemicals make sense. You can make ammonia from water and air plus electrons. Ammonia has three times as much hydrogen vs liquid H2 and it stores in metal tanks for years. Plus it’s already moved and used worldwide by the billions of pounds per year so it’s a widely handled chemical. Co2 can be pulled from the air there is a company that just got it down to $20 per tonne with bipolar cells and draino NaOH as the absorbent. Co2+ water plus electrons= methanol the base ingredient to thousands of chemicals ,plastics and even food there are yeast and bacteria that eat methanol into protein , starch,lipids or sugars aka food. Methanol stores in plastic tanks also for years. Cost is the hold up it’s coming down but it will likely never be as cheap as burning once to the sky the external costs are not accounted for in that case. So the transition that must happen will need to be either subsidized or taxed to shift the playing field. Yes people’s lifestyle will have to change that is just cold reality of allowing humans to overpopulate our home. To bring billions up the top 5% who use 80% of the world’s resources will have to reduce use until there is so much nuclear and other non combustion energy sources to then bring everyone up. The Sun hits earth’s landmass with a million times what humans use we only need a few percentages of surface area that includes roofs to give every one 12000 plus kWh per year or more. It’s never been a energy sources issue it always is a capture store and transport issue. Humans have the technology for all three of those.

France is a perfect example they build out one state financed design and they get 75% power from nukes. The US has sent 175 billion to Ukraine at a wholesale cost of 18 cents per kw and 1000 kw to the megawatt. We could have bought 972,222,222 megawatts worth of solar panels that’s 972,222 gigawatts or 972 one gigawatt reactors worth. Look at those numbers again that’s what we could have invested in our country. Even at a capacity factor of 25 percent that is between the long term average for Texas at 24.6 and California 28.4 on a yearly basis. @25% you still end up with 243 gigawatt years of power equal to 243 large nuclear plants. 243 gigawatt years of power is 2129 Twh....

Texas uses Electric Power: 365.1 TWh (10% total U.S.)

That’s just what we gave to Ukraine. Subsidy to the fossil fuels industry is 20 billion more per year in direct and tax subsidy.

What if we instead asked the Koreans to build us CANDU reactors they can build them for $2800kw in 60 months on time and on budget. 175 billion builds 62,500 megawatts worth of nukes. Those have 90% capacity factors over a year. 56.2 gigawatt years worth of power. That s 492.5 Twh. The takeaway is that solar is much cheaper than nukes but it’s not on demand nukes are that’s the trade off. If you had large demand that could be turned off and on at will like ammonia production cells or hydrogen electrolysis cells you turn the grid from demand oriented to supply orientated. That fundamentally changes the grid no more curtailment every electron is used that is made and you can massively over supply cheap solar and wind where it’s class 5 or better wind zones. Ammonia ,methanol and hydrogen store energy for later use it’s elegant. Have enough nukes to cover your cannot turn off loads like hospitals, residential ect.

The numbers get better if you just put solar in the desert capacity factors up and you are not using farmland. Every roof in the sunbelt should be covered in solar. That s millions of square meters of roofline. Make the grid supply based not demand based and the equation turns 180 degrees.

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