Geothermal: the hot choice for data centers

Google announces data centers powered by Fervo’s advanced geothermal project in Nevada

(Link to overview video in case your email client blocks it)

• Google has announced the operation of an advanced geothermal project in Nevada that is providing carbon-free electricity to power its data centers.

• The project is a result of Google’s partnership with Houston-based Fervo Energy, which specializes in geothermal technology.

• The International Energy Agency has long recognized geothermal energy’s potential, with projections suggesting it could contribute 3.5% of global electricity generation by 2050, reducing carbon emissions significantly.

• Fervo Energy is using this pilot project in Nevada as a stepping stone to launch larger projects, including a 400-megawatt project in southwest Utah.

• Google is actively pursuing carbon-free energy solutions, including geothermal, for its data centers around the world.

• The United States has significant geothermal potential, with advancements in enhanced geothermal systems making it feasible in regions previously thought impractical.

• Drilling technology developed during the shale boom in the oil and gas industry is being adapted for geothermal projects, improving efficiency and reducing costs.

• Fervo Energy uses horizontal drilling in geothermal reservoirs to maximize the utilization of heat reservoirs.

• The process involves injecting cold water down an injection well, passing it over hot rock underground, creating steam that drives a turbine to produce electricity.

• Fervo is looking to replicate its successful well tests in many locations to transition away from fossil fuels and reduce greenhouse gas emissions.

• Venture capital firm DCVC invested $31 million in Fervo, recognizing its readiness to contribute power to the grid.

• Geothermal energy is considered valuable as an “always-on” clean technology that can be scaled up to meet clean energy goals by 2030.

• Fervo’s next project in Beaver County, Utah, is expected to deliver clean power to the grid by 2026 and reach full production by 2028, further advancing the use of geothermal energy.

WSJ report on the future of carbon capture tech

• There is a debate about the importance of carbon capture technology in addressing emissions-reduction goals.

• Carbon capture involves capturing carbon dioxide from fossil fuels before it is released into the atmosphere and storing it underground.

• Some experts argue that carbon capture is necessary to meet carbon-reduction goals, while others view it as a distraction from transitioning to renewable energy.

• The discussion features insights from three experts: Charles Harvey, a professor at MIT; Benjamin Longstreth, global director of carbon capture at Clean Air Task Force; and Naomi Oreskes, a professor at Harvard University.

• Naomi Oreskes expresses concern that carbon capture subsidies are benefitting the fossil-fuel industry instead of facilitating a transition away from fossil fuels.

• Benjamin Longstreth contends that carbon capture incentives are not subsidies but rather a means to advance carbon reduction technologies alongside renewables and nuclear.

• Charles Harvey highlights that the cost-effectiveness of carbon capture has been challenged by the declining costs of renewable energy and energy storage.

• The experts discuss the potential need for carbon capture in industries like cement, steel, and chemical processing, where emissions are challenging to eliminate through other means.

• They also debate the safety and permanence of storing captured carbon dioxide underground, with differing views on the effectiveness of geologic storage.

• The discussion touches on the need for pipelines to transport captured carbon dioxide and addresses concerns about costs, community resistance, and funding sources.

• Federal funding for carbon capture in recent legislation is seen as a potential driver for the development of carbon capture technology, but some express concerns about its impact on the fossil-fuel industry.

• The experts discuss the viability of direct-air capture technology, which removes carbon dioxide directly from the atmosphere, with varying opinions on its cost-effectiveness.

• The consensus is that while carbon-dioxide removal is viable, it is generally more cost-effective to capture carbon from industrial emissions sources due to higher concentration levels.

IEA releases controversial Oil and Gas Industry in Net Zero transition report leading into COP28

• A special report from the IEA, released ahead of COP28, highlights the industry’s responsibility and potential positive contribution to the new energy economy.

• Even with current policies, global oil and gas demand is projected to peak by 2030, with stronger climate action leading to significant declines.

• The report emphasizes the need for the industry to align its operations with the goals of the Paris Agreement.

• Oil and gas companies currently account for only 1% of global clean energy investment, and 60% of that comes from just four major companies.

• To address the climate crisis, the industry should focus on reducing emissions from its own operations, which contribute nearly 15% of global energy-related greenhouse gas emissions.

• In a 1.5°C scenario, the industry’s own emissions need to decrease by 60% by 2030.

• While oil and gas production will decrease in net-zero transitions, some investment is necessary for energy supply security and sectors with challenging emissions reductions.

• The industry needs to reallocate financial resources to invest in clean energy technologies, with a target of 50% of capital expenditures going to clean energy projects by 2030.

• Carbon capture, while important, cannot maintain the status quo, and achieving a 1.5°C scenario would require an enormous amount of carbon capture technology.

• The report highlights that the industry must make decisions now, with consequences for decades to come, and that clean energy progress will continue with or without its full participation.

Don’t think it’s much of a coincidence that this report drops leading into COP28. The majority of IEA reports rely on the premise that globally we’ll hit peak oil and gas demand this decade. An assumption that feels pretty ungrounded and unlikely.

GE Vernova and Next Hydrogen team up on electrolysis tech

• GE Vernova’s Power Conversion business and Next Hydrogen Solutions Inc. have signed an MoU to integrate Next Hydrogen’s electrolysis technology with GE Vernova’s power systems to produce green hydrogen.

• Electrolysis is crucial for generating green hydrogen, a clean energy source.

• The collaboration enhances GE Vernova’s efforts in decarbonization.

• Green hydrogen is produced through electrolysis, which splits water molecules into hydrogen and oxygen, requiring efficient and reliable electricity.

• Green hydrogen is an environmentally friendly gas used in eFuels and ammonia production.

• GE Vernova’s power conversion technology will provide Next Hydrogen’s water electrolyzers with direct current (DC) power from renewable sources like solar, wind, and hydro.

• GE Vernova’s Power Conversion will integrate DC power supplies, power quality enhancements, energy storage, motors, drives, and controls with Energy Management.

• The partnership aims to drive the hydrogen revolution and contribute to decarbonization in various industries such as industrial gas, power, marine, and oil and gas.

• The collaboration will focus on advanced power systems aligned with Next Hydrogen’s upcoming electrolyzers set to launch in 2024.

• It will involve installation, testing, and integration of Next Hydrogen’s electrolyzer with a power supply designed by GE Vernova.

• Future phases will include market demonstrations and deployments to support large-scale commercial green hydrogen initiatives.

Northvolt claims breakthrough in sodium-ion battery technology

• Northvolt, a Swedish industrial start-up backed by Volkswagen, BlackRock, and Goldman Sachs, has achieved a breakthrough in sodium-ion battery technology.

• This new battery technology does not rely on critical metals such as lithium, cobalt, or nickel, reducing dependence on China for these materials.

• Sodium-ion batteries are considered cheaper and safer alternatives to lithium-based batteries, as they perform well at extreme temperatures.

• Northvolt’s CEO, Peter Carlsson, estimates that the technology could open up opportunities in regions like the Middle East, Africa, and India for battery-powered energy storage.

• The company believes that in 10 years, the demand for energy storage could rival or exceed that of electric vehicle batteries, which they have received $55 billion in orders for.

• Northvolt is seen as Europe’s potential competitor against dominant battery players from China, Korea, and Japan.

• The company has already begun manufacturing lithium-ion batteries in Sweden and plans to establish additional plants in Canada, Germany, and Sweden.

• Northvolt has achieved an energy density of 160 watt hours per kilogramme with its sodium-ion battery, making it competitive with lithium batteries used in energy storage.

• Northvolt believes that sodium-ion batteries will be about 25% cheaper than typical lithium batteries for energy storage.

• Northvolt is considering a stock market listing that could value the company at approximately $20 billion, with plans to raise over $5 billion in debt financing for its Swedish factory.

• The success of sodium-ion batteries will depend on factors like lithium battery prices and the ability to scale up the technology.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.