Energy & Power Takeaways from Cleantech Forum Europe and Cleantech Forum San Francisco

January has certainly been a busy month for Cleantech Group. With back-to-back virtual versions of our Cleantech Forum Europe and Cleantech Forum San Francisco, we are speeding into the new decade. Despite the backdrop of the pandemic, I came away from the two events with is a sense of positivity and optimism for the 2020s, with attendees seeing the past 12 months as an opportunity to rebuild and invest green. In  Energy & Power, major trends brought to light included:

• Deep grid decarbonization
• Energy molecules
• Industrial decarbonization
• Heat and digital utilities.

Here’s a taste of a recent discussion on energy grids from a Cleantech Forum:

Here are some of my key takeaways from the two weeks:

1.  The 2020s are here, and decarbonizing the grid is a priority

It is fair to say people are getting serious about decarbonizing grids. Renewable capacity continues to topple records, but the grids we use need a serious redesign to deal with increasing volatility in the 2020s. The term grid flexibility was used frequently in both the Europe and San Francisco events, a term that embodies the solutions available to deal with imbalances between supply and demand. In Europe, many of the proof-of-concepts around flexibility are now moving towards commercial viability as countries such as the UK stoke the role innovation can play in the next price control period. Opus One Solutions highlighted their emerging opportunity, which is detailed in their flexibility market project. In the US, virtual power plants at scale are now becoming commercially competitive alternatives, creating revenue streams for distributed energy resources across North America. OhmConnect’s $100 million ResiStation Project is a prime example given how distributed energy resources and grid flexibility is here to stay.

For customers, utilities on both sides of the pond are hoping to capitalize on emerging digital trends for customer engagement. Players such as Encevo, a Luxembourg utility, now see innovation partnerships as a core component of their future development strategy. For all corporates in the grid market, innovation is a vital piece of the customer interface strategy for digital utilities.

2. Hydrogen is here to stay, but green does not always mean clean

In both Europe and North America, Hydrogen remains a top trend, and is receiving lots of hype. Those inside the bubble are no doubt enjoying the constant flow of mainstream coverage.  However, they are also trying to bring the conversation back to ground. One example is how the market is currently over-emphasizing the rainbow of colors by which hydrogen can be produced.  This can actually be detrimental to the emerging technologies. Instead of colors, there is a call to focus on efficiency, cost, and carbon intensity. Green hydrogen is commonly used as a catch-all term, which is at risk from oversimplification and can be abused by technologies with high emissions. Hydrogen produced from biomass for example, is 20x more carbon intensive than wind, but is commonly classed as green. As we move into the most important few years of hydrogen technology scaling, there is also a call for a lifecycle approach to hydrogen value chain development. Not all renewables are created equal, and a low-carbon deployment of the new market is vital if it is to play a role in global decarbonization.

While many are citing the 2020s as the decade of the zero-carbon molecule, it is important to mention hydrogen is by no means the end of the road. Hydrogen derivatives such as ammonia and methanol have the potential to play important roles across industry for specific market segments. Ammonia, as we called out here, can play an important role for a large-scale hydrogen export marker, given the molecules high energy density, for example.

3. Immediate action needed to decarbonize industry

Industrial players are increasingly thinking about how their own 2050 decarbonization pathway may play out. Given the long-life cycle of many steel, cement and manufacturing assets, a hefty volume of the capital is needed to drive competitive green commodity markets in these sectors in the coming decade. While energy savings for this investment is not likely to come anytime soon, start-ups in Europe were quick to call out the potential for quicker energy savings AI-based optimization solutions can provide.

Carbon capture, utilization and storage remains a politically heated conversation, but does offer other viable pathways for industrial corporates to address their emissions profiles. With many active pilots underway in Europe, the question is if the technology can get to an attractive price-point. Something Elon Musk is certainly aware off, given his $100M carbon capture price announce last week.

Lastly, heat, across industrial, commercial, or residential segments is starting to get the attention it deserves. Given that 80% of new heating equipment sales remain tied to fossil-fuel based technologies, heat remains inextricably linked to carbon emission growth. From low-cost solar thermal heat production, waste heat recovery to heat system optimization, there is a vast array of entrepreneurs and investors looking to disrupt the space. Heat is an important one to watch for the 2020s.