Part III — Breakthroughs in Energy and Transportation (2020–2030)
As a clean energy professional, my fiduciary responsibilities include fantasizing about the methods humanity will use to generate and channel energy. When I look into my proverbial crystal ball, some images come to mind — autonomous and electric vertical take-off and landing (eVTOL) vehicles taking-off from building rooftops, intercontinental electrical grids established that pays less regard to national borders but transfer cheap and clean electricity, car fleets lending their batteries as energy sinks to utilities that can support the grid resiliency as we witness a massive explosion of renewables in our day to day lives. Back in my days at college, these so-called disruptions used to fall in the realm of science fiction. 2001: A space Odyssey gathered profound appreciation from the critics back in the 1960s. Fast forward to the present, climate change, alternative sources of energy, artificial intelligence, transforming the space-realm have swiftly made their way into the colloquial dictionary. Since then, the incremental changes have picked up exponentially so much so that today the smartphone in my pocket in functionality is no less than a personal computer. The energy industry is standing at the cusp of a revolution which needs a catalyst to catapult the combined efforts of the visionaries focused on transforming the landscape to which we have grown accustomed. Based on the expected price-performance improvements in renewable energy, storage, and sensors, I believe that a series of disruptions will unfold when these products and services are commercialized for the world’s most destitute.
I enumerate below breakthroughs in electricity and transportation — the two industries that account for 50 percent greenhouse gas emissions — which will transpire in the next decade, render human activities more sustainable and generate wealth in the hundreds of billions if not trillions of dollars. John Doerr declared in 2007, “Going green is bigger than the internet. It could be the biggest economic opportunity of the 21st century.” During the five years between 2006 and 2011, venture capitalists lost half of their $25 billion investments in clean energy. Was Doerr wrong? I do not think so, but his predictions need more time to vindicate themselves.
ENERGY
1) Modernizing Grid through AI-powered Electricity Retail
The invention of the telegraph, radio, and the computer were the stepping stones for building a worldwide broadcasting communications capability that led to the development of the internet in the late 1960s. Since then, the industry has exploded in unimaginable ways. In the years to come, compact hardware systems that could support high computing intensity at low power with easy to navigate interfaces started hitting the markets. New business models cropped up as we saw the processing speed multiply from a few thousand to hundreds of millions of instructions per second. The effects trickled down to the ancillary industries as well. Semiconductors and allied industries saw a boom. Research projects around the design and optimization of legacy designs were heavily funded. And in no time, we had the dot com bubble at our hands.
Why did not the same happen in the energy industry? Since the photovoltaic effect’s discovery in the late 1880s, why has there not been any commendable changes attributed to the broad energy ecosystem?
The energy systems contain great inertia! Decarbonization and energy efficiency have been known to humanity for long. The testimony to the fact can largely be traced back to the United Nations Environment Programme’s foundation, the sustainability wing of the United Nations in 1972. Without hurting my fellow cleantech visionaries’ feelings, I want to subtly note how the subdued proliferation of renewables over the years lies in the fact that “it is not urgent”! There are no demand-side pressures from the consumers desirous of achieving networking capabilities across continents or supply-side tailwinds, which allow differentiation based on the incremental value created and monetizing the same.
There is an uptick in the interest in the sector that started with early-stage venture capital investments in the early 2000s to the formulation of accords of the likes of the Paris Agreement in 2016. Risk capital deployment is always a leading indicator of an opportunity that can potentially disrupt the market dynamics. But even they could not crack the puzzle, let alone blitzscale renewable adoption. The reason that sets apart the energy space from other sectors is that the energy is not valued in its own right, but rather the end products and services are which are highly valued. Electricity or petrol, for instance, is just the carrier of energy. It does not matter to the consumers what the carrier of their energy is as long as the bulbs in their houses can operate at a flick of the switch or fire up the ignition engines of their cars. So the demand side of the equation is actually as stable as it could be. But what is degrading at the alarming rate is the supply side. The utilities are plagued with single-digit margins, face high pricing pressures in this commodity business that has created a substantial drag on their balance sheets. To balance this equation, we either need these entities to let go of their for-profit status or make them dynamic enough to track the changes on the other side and complement the same in “almost real-time.”
This is where Grid Modernization steps in.
Grid modernization represents a lucrative investment opportunity for investors and will improve the public well being. But what does modernization entail? It includes:
- Decentralization, where generation and energy storage takes place at multiple nodes instead of central
- Miniaturization and modularization of hardware encourages consumers to set up microgrids voiding their utility contracts forcing some to relinquish their going concern status
- Bi-directional flow of electrons enabling households to both buy and sell electricity thereby turning them into prosumers
- Dynamic pricing enabled by grid digitalization where consumers adjust their demand based on costs of generating electricity
The list is inexhaustive but enumerates significant trends investors would be remiss not to buck.
One area where I see tremendous opportunity is applying artificial intelligence (AI) and machine learning (ML) in electricity retail. Specifically, the use of algorithms trained on big data generated from sensors configured in/on everything from the blades of wind turbines to transformers to electrical meters helps businesses with everything from balancing the load, scheduling the maintenance, and wind and solar forecasting.
The U.S. electricity retailers are a phenomenon of deregulated markets and responsible for delivering electricity to end-users. Currently, they operate inefficiently and have lagged in digitizing their operation — everything from procurement, to weather prediction to marketing and pricing personalized electricity plans to implementing demand response. The electricity retailers outsource the development of these capabilities to IT consultants who deliver piecemeal and solutions that are neither economical nor sustainable.
Nascent electricity retailers to the rescue who with their sophisticated analytics and state of the art software can help drive the penetration of renewables across the grid. Companies such as Climate Connect, Jules Energy, Evolve Energy, and Bulb Energy have written stacks of algorithms and trained them on voluminous data replete with edge cases to do all of the operations mentioned above better than the consultants and incumbents. These start-ups have matured to provide services to regulated utilities and model power systems and predict load in India, UK, and Europe, and attempt to tweak these tools to meet Texas residents’ electricity needs. I assess that such start-ups can take the customer book of your average electricity retailer, generate higher profits with fewer employees, reduce churn, decrease customer acquisition costs, and boost EBITDA by 5x or more.
Start-up electricity retailers can build platforms that facilitate more peer to peer transactions. For example, Joe could, when his solar panels fail to generate enough electricity for charging his Tesla overnight, send out a bid in his neighborhood for 100 kilowatt-hours, and have it fulfilled by his neighbor Jean. Sometimes there will be no customers for the excess electricity that Jean’s solar panels generate due to their better tilt or ability to capture a greater solar spectrum. In this case, the electricity retailer blockchain tools can help her sell the power to the local utility for a competitive price.
Australia, the U.K., and the U.S. state of Texas are the pioneer electricity retailer markets in the world today and have the most extensive customer base in the tens of millions. Texas’ electric market is especially interesting to me as someone scouting cleantech opportunities stateside. The electrical grid here is fully deregulated in Lone Star State, unlike other states in the union where the generation, transmission, distribution, and retail are integrated, and publicly chosen commissioners, not markets determine prices. Texas electricity retailers (called retail electricity providers or REPs) compete aggressively, retailing power they purchase from either the utility or DER owners. The jury is still out on whether electricity market deregulation has been a net positive for industries, commercial, and residential customers.
2. Intercontinental Electricity Grid (IEG)—achieving Power for All
Trade is the path to prosperity. Adam Smith, Alexander Hamilton, Deng Xiaoping, and Margaret Thatcher — whether economist or head of state — all rational men and women who have studied the wealth of nations have documented how trade breaks domestic monopolies and raises consumer purchasing power. International and forex platforms are established for efficient global trade in commodities and services. But can it be extended to a commodity like electricity — connecting countries with power lines to build a giant global grid. We have already seen this in the Telecom, Media, and Communications space. There are undersea cables that transport the gigabytes of data from one continent to another. So much so, even we have inter-continental oil pipes transporting oil molecules, stretching as far as 4,000 km. Now it does not seem unfathomable, or does it?
The IEG would leverage the time difference between countries and interject surplus energy from one nation’s grid to another. Think about building concentrated solar power plants in the Sahara desert spread over 9.2 million miles of the sovereign lands of Egypt and South Sudan, and transmits the electricity it generates to consumers in Ethiopia and Central African Republican. It would require diplomacies, investment, and standardization of equipment, but it is not impossible. We could even send this electricity across the oceans to Greece and Italy through high-voltage direct-current (HVDC) cables. The ocean floors are a relatively safe place to wire the world, as we already know from the internet fiber optic cables.
The benefits of building IEGs include net carbon dilution in global electricity generation. Indian utilities do not fire up their coal plants as Saudi Arabian solar farms can meet its demand at lower prices, obviating the need for expensive storage solutions and increased access to power for the poor. A recent study published in Fortune India explains how it is not expensive either. The cost of Gulf Co-ordination Committee (GCC) interconnection via a sub-sea cable from Oman to Porbandar in Gujarat is estimated to be $3.5 billion for a 3-gigawatt link. The cost per unit of power transmitted over this link could be lower than 2.5 US cents per unit.
The global giant Softbank had articulated a vision to build power generation and transmission infrastructure spanning all of Northeast Asia. Unfortunately, the Fukushima nuclear disaster in Japan in 2011 spiked the grandiose plans to build a clean Asian Super Grid. To execute its vision, SoftBank signed MoUs with three large power companies from neighboring states: State Grid China Corporation (SGCC), Korea Electric Power Corporation (KEPCO), and Russia’s national transmission system operator Rosetti. After the tragedy, the four entities have continued to study the feasibility of connecting the power infrastructure between their respective countries. And this transnational endeavor is not unique in its scope and goals or its achievements thus far. Europe, for instance, already has a well-established network connecting most of the continent. The European Super Grid is looking to link with countries in North African and Central Asia.
Let us now turn to the U.S. The country is made up of 3 generation transmission distribution (GTD) hubs: a Western section, an Eastern section, and Texas’ network. Combining these interconnections into one could allow surplus wind and solar power to be shared across the United States. The transmission infrastructure, however, as it exists today, is constrained in its ability to carry electrons and desperately needs an upgrade. A U.S. national super grid could save the public more than $50 billion and could be fuelled with an energy mix where 80 percent of the feedstock will not release any emissions.
The startup, Clean Line Energy, tried to connect wind power in Oklahoma to demand in southeastern and MidAtlantic U.S. with 720 miles of HVDC lines (Figure 1). Despite having serial entrepreneur Michael Skelly as CEO, engaging with citizen bodies from the outset, raising $600 million in venture capital, and persuading the Obama administration to invoke eminent domain on the company’s behalf, the political hurdles of what energy analysts considered the first steps of building North American Super Grid proved insuperable.
China also has a take on IEG that State Grid Corporation of China outlined in the Global Energy Interconnection (GEI) proposal. The GEI comprises three main components: an intercontinental backbone network of transmission and distribution grids; large energy bases in the North Pole, on the equator, and on each continent that can integrate distributed generation and renewable power sources; and a smart “comprehensive” platform that enables resource allocation and market trade. China’s ultra-high-voltage (UHV) AC-DC power grid line from Xinjiang to Anhui, built in collaboration with the private sector (ABB, Siemens, etc.), has set world records for transmission distance, power, and voltage, and raised China’s credibility to lead efforts to build IEGs. The UHV line adds to the body of evidence that long-distance transmission can increase renewable resource utilization. China used it to move 161.5 terawatt-hours of hydro, wind, and solar energy in 2017 alone.
India and Singapore are other countries that have floated plans to build power grids — One Sun, One World, One Grid (OSOWOG), and Sun Cable, respectively, latter of which aims to import power from solar farms in Australia via a 3,800-kilometer undersea cable.
As in the case of Clean Line Energy in the U.S. public skepticism, power sector incumbents and regulatory headwinds have stymied other nations’ efforts to build IEGs. For anyone of these to succeed, political ingenuity, technology standardization, and adequate public and private capital are imperatives.
3. Storage—the ‘Holy Grail’ of the Energy Transition
With the resolution of the “War of Currents” between Tesla and Edison in the 19th century, the world has always known the electricity value chain as comprising three segments — generation, transmission, and distribution. Entering into the 21st century, we have seen batteries augment various industries, primarily as drivers of reliability. This decade will witness energy storage as a critical hub for the entire grid augment resources from renewables and fossil fuels on the supply side to the demand side resources. Apart from assisting in stabilizing intermittent solar and wind energy, they can also help in frequency regulation of the grid apart from other demand-side services. The amount of energy storage capacity deployed in the U.S. annually will increase from 523 megawatts in 2019 to 1,145 megawatts in 2020, before tripling to 3,646 megawatts in 2021. The exponential growth projection is driven in-part by several in-development battery storage projects that are some of the largest ever proposed in the U.S., such as PG&E’s 182 megawatts, 730 megawatt-hour Elkhorn Battery Storage project in northern California, which recently received local regulatory approval. There are chances that we might even see a bigger jump in the projected figures, fueled by the externalities of the likes of the current pandemic when there is an increasing trend of achieving self-sufficiency at the node level in the grid.
Front of the Meter utility-scale storage projects will pick up a large share of the overall market compared to Behind the Meter deployment. Like with any nascent technology, consumer energy storage picked up fast as there was less investment involved, but now it is “sliding into the trough,” considering the benefits of the same are difficult to track at an individual level. On the other hand, grid-scale energy storage is “climbing up the slope” — apart from providing utilities a reservoir to absorb renewable energy produced in surplus in many areas in the U.S., grid-scale energy storage also assists in grid resiliency during peak demand hours. Utility procurements, changing tariffs, and grid service opportunities have hastened the storage installations. Grid-scale energy storage penetration is happening faster than anticipated. Testimony to the same is the project around Megapack batteries of as much as 800 megawatts that gathered the interest from Tesla Energy for battery storage in Nevada.
In Blog 2, I listed configurations and chemistries of batteries to help fulfill the households’ energy storage needs. I want to report now an alternative phenomenon that can be leveraged for utility-scale storage that circumvents the cost and performance constraints of electrochemical modes thereof. The most efficiently engineered Lithium-ion batteries can help power plants store energy for 4 hours at $300 per kilowatt-hours. But, to increase the use of renewables in our electric grids, we need to bring down storage costs by a factor of 10.
Ninety-six percent of the world’s energy storage today comes from water that is driven uphill using pumps. But implementation is limited as “pumped hydroelectric” storage requires earmarking of considerable tracts of land. The start-up Energy Vault that received funding from one of my previous workplaces, SoftBank, also uses a mechanical approach. Instead of pumping water, it uses wind energy to drive motors on cranes to lift 35-ton cinder blocks and store energy gravimetrically. Energy Vaults grid-storage installations can include as many as two dozen towers that can store 400 megawatt-hours of electricity, which is enough to power 50,000 households.
Then there is thermal storage. Concentrated Solar Power (CSP) where solar energy is used to heat molten salts that are insulated in a heat exchanger and subsequently channeled with a certain flexibility to boil water to turn turbines that generate electricity is one example. Cryogenic storage where excess renewable energy is used to liquefy air is another.
Ultimately the storage market is not a winner takes all and allows new entrants to carve out niches for themselves — electrochemical storage for residential neighborhoods, thermal for regions that receive intense sunlight, and gravimetric where energy needs to be stored seasonally and the land is abundant.
4. Dawn of the Hydrogen Economy
Hydrogen is a high-quality energy carrier, though it is not a primary energy source. It can be produced (separated) from various sources, including fossil fuels, water, or biomass. The two most common methods of its production are steam reforming and electrolysis. While steam reforming is used in the industries to process natural gas (methane) and subsequently produce hydrogen, the method entails the production of carbon dioxide emissions — this is called “Brown Hydrogen,” which accounts for about 95 percent of the global production. On the other hand, if the emissions thus released are captured and stored, we have “Blue Hydrogen” at hand. Though the externalities are less in this case, carbon sequestration is still in the very nascent phase. Another alternative is “Green Hydrogen,” produced from electrolysis of water using electricity generated from renewables and carbon neutral.
The flexibility of hydrogen as a resource empowers it to play a significant role in our low carbon future. Imagine an alternate reality where you have pipes carrying pressurized hydrogen running all around the town that can be tapped to supplement the domestic natural gas supply, plucked into gas stations to refuel hydrogen tanks for Fuel Cell Electric Vehicles (FCEV), used by industries for their fertilizer production and can be fed through a gas turbine or fuel cell to generate electricity. As unbelievable as it sounds, Japan is one country that has already accepted that the radical answer to the energy conundrum entails hydrogen. Post the Fukushima disaster in 2011, the country set for itself the target of progressing towards the “Hydrogen Society” by 2050. The declaration of support by EU energy ministers in 2018 further aims to tap into the enormous potential of sustainable hydrogen technology. The Hydrogen Council has estimated that a $2.5 trillion opportunity could emerge by 2025.
With a tremendous upside potential, we need to address the imminent challenges that will encompass the crux of the research studies in this decade. The energy transition is not as easy as it seems. We need to fix the supply side and build an infrastructure to support the technologies to produce and transport the gas safely (Hydrogen is highly flammable because of reactivity theory — the reaction between hydrogen and oxygen is very energetically favored (branching chain reaction), and atomic theory — moves fast being the lightest atom allowing them to run into something else with which to react quickly.) We also need to fix the demand side, which means the devices that can provide useful work from the same need to undergo a fundamental transformation. This has not seen previously with any of the other renewables, be it solar or wind, where only the supply side had to be managed. But still, I believe that market forces will start taking shape at the end of the decade, promoting the replacement of the legacy networked energy infrastructure. For what its worth, it will begin before the intervention of the Governments’ attempts, as is seen in the case of other alternative fuels.
The transition from hydrogen’s use at present in industrial markets to a broader hydrogen economy is suspected to be led by oil and gas (O&G) majors. The current crisis has yet again exposed the inherent weakness in the global oil commodity markets. Many economists believe that oil remains the most critical commodity in the world, as it is the primary source of energy. But the kind of volatility the market has seen in the oil prices over the past two decades negates the demand elasticity expected in a commodity by virtue of its properties. The industry has yet not been able to determine a price floor over centuries of its existence. So much so, that big oil companies had to take write-offs in billions to account for the demand destruction and impairment due to the impending behavioral impact on account of climate change. The majority of these companies are debt-laden, and this directly poses a threat to their existence.
Hydrogen is not new to the O&G majors. There is an existing demand in the industrial clusters that they have to meet. Why can they not expand this capacity while building a plant for carbon capture and storage off-shore next to the oil well? For green hydrogen to be a mass phenomenon, the unit economics need to pan out favorably, i.e., the electricity prices have to be near zero coupled with high electrolyzer utilization rates. None of this is expected to happen soon enough, and this is where the O&G majors command an advantage. Pivoting their businesses at the right time — indulging in the much-needed investments — apart from taking care of business continuity, will position them early in the industry to replicate what Lithium-ion has done to other battery chemistries.
TRANSPORTATION
5. Autonomous Vehicles: The next revolution
Mobility analysts have coined the acronym ACES to encapsulate the Future of Mobility. It unabbreviates as Autonomous, Connected, Electronic, and Shared. Let us take a closer look at what those terms mean.
Full autonomy is defined as the cars’ ability to drive through any obstacle course efficiently while keeping the vehicles and its passengers safe without any intervention from the driver. Society of Automotive Engineers believes cars will achieve full autonomy through 5 systems iterations (Figure 2) where they go from driver assistance (ADAS) to full automation. Some like me believe the ADAS cars can be circumvented as an evolutionary step towards Level 5 autonomy. But roboticists and ML scientists must write better algorithms for AV proprioception and perception.
Today’s cars rely on GPS for the proprioception, which can be off about the car’s location versus its environment by a few feet, which works when it has a human driver, but for an AV, that inaccuracy could mean the difference between a pedestrians life and death. For perception, today’s semi-autonomous vehicles use cameras, among other things, which are very poor at perceiving depth, and it is an industry imperative to invent ones that can help AVs build rich 3D models of the world.
The shift towards AV has also created opportunities for start-ups working on disparate products like maps — the reason why Apple acquired MapSense in 2015 — and infotainment for passengers as they get unburdened from the task of chauffeuring. Think discount on the fare to the airport if you were to agree to stop by clothing store en route to your destination!
For AVs to win mainstream acceptance, they must have the cognitive wherewithal to deal with edge cases one encounters while driving: animals, jaywalking teenagers, loose freight coming undone, etc. While one man in a garage can help make AVs 99 percent reliable, the percentage of driving scenarios where they can operate in safety is still unacceptable. For AV, nothing less than 99.99 percent reliability, which covers edge cases will suffice before regulators are comfortable at the sight of cars without steering wheels. Telecommunications (5G) and IoT players will be instrumental in breaching the 99.99 percent threshold. Verizon will build networks that allow AVs to connect to the cloud even when it drives through tunnels with historically poor reception. On the other hand, Cisco will embed sensors in everything from the vests of construction workers to the wheels of a stroller to the legs of a road sign. The alphabet C in the ACES acronym refers to these same Vehicle to Vehicle (V2V) and Vehicle to Everything (V2E) connections.
For my thoughts on vehicle electrification and sharing, please refer to my Blog 2 on storage. Lithium-ion batteries will be ascendant for the next thirty years and will be manufactured at a scale that is unlikely to be emulated by entities working on alternative anode-cathode-electrolyte combinations. Incidentally, Lithium-ion batteries have a lot of scope for price-performance improvement. Start-ups like Voltaiq and Feasible are developing software, algorithms, and meteorological inspections tools that will improve manufacturing yields, performance, and repurposing potential thereof.
6. Battery Swapping: A complementary service to EV charging infrastructures
Traditional battery charging takes anywhere between 2–6 hours. Gas-powered vehicles can refuel in minutes, which severely disadvantages EV against their ICE peers as car-makers, governments, work to electrify transportation. One innovation — albeit operational — that entrepreneurs conceive to help EVs refuel swiftly was battery swapping. However, the rise and fall of battery-swapping company Better Place in 2013, has turned investors off. Tesla abandoned the idea a few years later. In the U.S., the hurdle to democratizing swappable batteries was a lack of standards across multiple transportation OEMs. Battery packs need to be the same size and shape. But what failed in the U.S. could succeed in China and India, where an omnipotent state can dictate standards, and the markets are dominated by small vehicles.
The Chinese government is mandating its EV companies to make their batteries interoperable insofar batteries from one model could be inserted in another in under three minutes. The state intends to make the process uniform for drivers across any car and facilities. Take the example of Chinese automaker NIO, which is a well-known proponent of battery swapping. NIO allows consumers to rent an EV battery pack for the day — potentially a big pack for a long trip — for as little as $10 a day. The company has about 125 battery-swap stations for its owners. Secondly, BAIC Group, the top 3 sellers of EVs in China, has set up 187 battery-swap stations in 15 Chinese cities for 16,000 electric-powered taxis. In 2019, it announced plans for 3,000 swap stations to supply a half-million electric vehicles (EV) by the end of 2022. BAIC is experimenting with different business models. In 2018, the company sold its EV300 compact car for about $12,000. It included an all-you-can-swap deal for about $60 a month. Another example is the recent strategic investment announced by SB Energy in Shanghai-headquartered energy service internet platform Aulton New Energy Automotive Technology. The company provides a one-stop battery swap solution for EV transportation through smart internet technology. It has served the 2008 Beijing Olympic Games, 2010 Shanghai World Expo, and 2020 Guangzhou Asian Games. The current round of funding comes after an investment from NIO Capital in 2018, which speaks about the businesses’ synergies.
India’s population is growing and is commuting more within and between cities. The increased mobility has created multiple socio-economic and environmental challenges for the Indians. It, therefore, needs to make all modes of transportation electric. More than 80 percent of Indian vehicles are two-wheelers (2Ws), which is very different from the vehicle fleet in the developed world. Consequently, the path to the electrification of Indian transport will be unique. Multi-modal e-mobility pilot like ones conducted by ridesharing giant OlaCabs in Nagpur has given us some insight into the total cost of ownership (TCO) for four-wheelers (4Ws) EV relative to ICE vehicles. Although 4W EVs are cheaper to operate, realizing these savings requires significant infrastructure investments.
On the other hand, smaller vehicles should be much easier to electrify. 0.75 million EVs were sold in India in 2019, and more than 99 percent of it was from 2Ws and three-wheelers (3Ws). This subset of the Indian EV market represents a very compelling investment opportunity.
Battery swapping will drive the adoption of in 2W and 3W in India as it is doing in China and South East Asia. It will eliminate wait time for charging, make better use of land, reduce the size of batteries in vehicles, and increase available run time. Taiwan-based Gogoro is a leading player in the battery swapping technology in two-wheelers. Figure 3 is a thumbnail for a video that shows how Gogoro swapping stations work:
Players like SmartE are collaborating with Delhi Metro, Sun Mobility, Panasonic, Exicom, and Amara Raja batteries to emulate Gogoro technology-operating model in Delhi NCR. Ola also has a battery-swapping station in Gurgaon for e-rickshaws equipped with 14 units, each with 20 battery packs sufficient to power 100+ e-rickshaws.
7. Simple Electric Flights
Another disruption set to take place in the next decade and often ignored in debates on modes of transportation is electric aviation. Electric aircraft technology is rapidly developing to reduce emissions and operate costs by over 75 percent. The U.S., Europe, and Australia are already planning for 100 percent electric short-haul plane fleets within a couple of decades. Norway is among the frontrunners to have publicly expressed an interest around electric propulsion. The country wants all its short-haul flights to be powered by electric motors by 2040.
There are two main types of electric aircraft: short-haul planes and vertical take-off and landing (VTOL) vehicles, including drones. The gnarly physics affecting the uptake of electric aviation is low battery energy density to support commercial flights. Despite these impediments, we will see short-haul electric flights before 2030 with breakthrough technologies like solid-state batteries. Even Norway’s aviation chiefs were skeptical of electric aviation a few years ago. But their program to electrify the flights took shape post their visit to Airbus and Boeing facilities. Boeing was extensively involved with the aircraft maker Zunum Aero while working with NASA — this caught their attention, and they decided to have aircraft makers tender for a 25–30 seater all-electric airliner in a few years as a lot of the flights in Norway are 15–30 minutes long.
A review of aviation trends reveals the myriad sizes of electric aircraft being prototyped. By 2025, nine-seat planes could be doing short-haul (500–1,000 kilometers) flights, before 2030, small-to-medium 150-seat planes could be flying up to 500 kilometers. Short-range (100–250 kilometers) VTOL aircraft could also become viable in the late 2020s. A company that will mark service entry in 2025 with eVTOL aircraft for inter-city and short regional flights is Lilium. The aircraft is projected to have a top speed of 300 km/ hr and a range of 300km. If these models “cross the chasm,” we will see small electric aircraft operating on new, cost-effective short routes worldwide. They could open new export and logistics opportunities, as has been illustrated by MagniX.
Why? The two primary components of current airline costs are fuel (27 percent) and maintenance (11 percent). Electric aircraft with their energy efficiency, simplicity, and longevity of the battery-powered motor and drivetrain could deliver significant savings on each. Contrast this with fossil fuel planes, where a high-passenger, the high-frequency business model, comes at an exorbitant environmental cost.
Incidentally, air transport is generally organized in combinations of hub-and-spoke or point-to-point models. Smaller, more energy-efficient planes encourage point-to-point flights; in other words, connect the spokes of the hub-and-spoke operating model. Electric aircraft could lead to higher-frequency services to increase the dispersion of air services to smaller airports and alleviate burdens on larger airports. For example, Australia’s largest airport, Sydney Airport, is efficient in both operations and costs. Yet physical and regulatory constraints, mainly aircraft movement caps and a curfew can leave it congested. It also generates audible and environmental pollution to the chagrin of the locals. With more sub-1,000 km flights originating from Sydney, electric aircraft could overcome some of these constraints.
Electric aviation could also complement existing freight services, including road, sea, and air services. International air freight volumes have increased by 80 percent in the last 20 years. Electric aircraft provides an opportunity to transport high-value products to regional hubs cost-effectively and subsequently to consumers via VTOLs or drones.
8. Lightweight Vehicle Materials
By interviewing leaders of vehicle manufacturers and conducting literature reviews, I have been able to identify immutable trends that will ascertain materials we use to assemble cars of the future, and the most overarching ones are electrification, autonomy, and manufacturing. I have elaborated on them in the ensuing passages:
Electrification: Hydrogen vehicles are a pipe dream and might take a couple of decades for mass adoption like EV, and this has numerous implications for materials used to build the cars prime mover — the powertrain and its fuel source — batteries. While EVs have fewer moving parts, unlike the internal combustion engine (ICE) vehicles, they are heavier because of batteries’ weight. Therefore, fastening/adhesion/bonding of components becomes less critical, whereas lightweighting becomes more critical. Today’s cars use a lot of steel, but cars, in the future, will use more aluminum and magnesium, which are relatively lighter metals, have respectable strength to weight ratios, and are environmentally friendly. Another lightweighting strategy includes replacing cathode-anode in Lithium-ion batteries from expensive metals to metal fluorides. Cobalt is a critical raw material for Lithium-ion batteries, as I discussed in Blog 2, and like other rare earth metals, it has an unethical-precarious supply chain both reasons for material scientists to suggest alternatives.
Autonomy: As algorithms supplant drivers, less material will be required to protect drivers from frontal crashes, side crashes, and rollovers. But autonomous vehicles will be used for infotainment as much as transportation and will house large television screens and be embedded with hundreds of sensors. This will increase the environmental toll it takes to manufacture cars as well as its mass. For instance, Vaclav Smil pointed out that while the vehicle fuel efficiency increased from 13 to 27 miles per gallon from 1970 to 2020, the positive GHG impact of the increase in mileage was offset by an increase in weight — 1.1 to 1.7 tons during the same time. Materials substitutions like steel with carbon-reinforced composites, bio-resigns, and fibers will pare the environmental toll of the design upgrades.
Manufacturing: Materials used in cars in the future will be a function of current fabrication processes. Conversely, future fabrication processes will be determined by the materials adopted today. For example, devout practitioners of stamping and injection molding might offer vigorous resistance to greater use of plastics and composites. Whereas the use of carbon fiber-reinforced polymer might lead to the extinction of warm form aluminum but ascendance of additive manufacturing.
Smart factories that manufacture cars will be full of sensors, robots, and analytics platforms to optimize their performance and personalize the end product to users’ specifications. To quote Elon Musk: “The Gigafactories are the innovation more so than the Teslas and batteries they assemble.”
Final Thoughts
In the next 10 years, we will witness combinatorial innovation when entrepreneurs cross-pollinate IoT, telecommunications, battery chemistries, EVs, and power generation technologies to leave a radically transformed heat, electricity, and transportation infrastructure — virtual and physical. There is no greater case study of this phenomenon than Tesla’s, which has built utility-scale and residential storage solutions, electric vehicles, solar roofs, and recently filed for a license to provide electricity in the UK. No wonder the company’s market valuation exceeds that of Disney ($237 billion), Coke ($206 billion), Toyota ($204 billion), PayPal ($225 billion), and ExxonMobil ($193 billion). Who will help discover the next Tesla, the next Nest, the next Vivint, the next Vestas? The clean energy investors who recognize/create will deliver market-beating returns John Doerr predicted in 2007.
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Disclaimer: I wrote this article myself, and it expresses my own opinions. The assessment of energy and transportation breakthroughs is based on my experience and latest available data and announcements by governments and companies, as of August 20, 2020.
