August 2023 Cleantech Roundup: DAC Hubs | Climate lawsuits | GM’s Home Invasion
This month, we explore the giant tube of money going to direct air capture projects, some kids suing the government, bidirectional charging, Proterra’s bankruptcy, and more!
These Projects Suck
The Department of Energy announced it was providing $1.2 billion in funding for new direct air capture hubs to suck carbon dioxide out of the air. One of these will be in Texas between carbon removal company Carbon Engineering and Occidental Petroleum (who have been collaborating for several years via a subsidiary, 1PointFive), and another will be in Louisiana between applied research mega company Batelle and carbon removal companies Climeworks and Heirloom.
These projects will both aim to capture a million metric tons of CO2 per year initially and would be the first commercial scale direct air capture projects in the United States (there is one in Iceland, built by Climeworks). The south has the humidity, geology, and pipeline infrastructure to make these selections a good fit for these projects. Essentially this will be some large scale expensive deployment projects, to help advance direct air capture technology.
There tends to be some consternation around direct air capture on several fronts including opportunity cost and legacy industry support. It should not be an either/or of course — we need to decarbonize rapidly, but we also know that we’re going to need a bunch of carbon removal by mid-century to stabilize things, so we need to get moving on scaling things up. This is exactly the sort of thing the Department of Energy should be putting money towards.
Another complicating factor is the interest from the oil and gas sector. Occidental, for example, is primarily interested in direct air capture so they can use it to offset the footprint of new oil production. That doesn’t really jive with getting to net zero, so freaks some folks out.
My perspective on this is that we should get everyone and their mother involved in carbon removal that is motivated and has something to add to the effort. It is complicated, but I think we can sort out what we’re using it for once we have a cost effective solution — it doesn’t bother me that excel spreadsheets weren’t created to be used for my household budget or to keep track of event registrations — its still super useful even if that wasn’t its original intent. At the end of the day, developing cost effective carbon removal is crazy important, and it is still crazy early — we should be willing to fund a variety of projects, even if we can’t all agree what the end goal is.
On a related note, a week after this funding was announced, Occidental Petroleum announced it was buying Carbon Engineering for $1.5 billion — the first billion dollar carbon removal company (to the best of my knowledge) but not the last).
The Children Are Our Future
In a trial related to climate policy, a Montana judge sided with the youth who brought the suit and concluded that Montana was not considering climate change in its policymaking, but was required to do so. This was at the state level, so doesn’t have immediate implications for the country as a whole, but is considered a bellwether for similar types of suits from children who are contending their constitutional rights are being violated by not addressing climate change.
A potential corollary for climate policy here might be pursuing the mob: famous mobster Al Capone was ultimately sent to prison for tax evasion, not for being a murdery gangster. It’ll be interesting to see if the way that comprehensive climate policy ends up getting enacted in the United States ends up being settlements with little kids who don’t want their towns to melt.
Thrown Under the Bus
Electric bus firm Proterra filed for bankruptcy, despite a commanding market share in the United States. This one seems a bit different than a lot of the other EV SPAC failures (many of which I think were doomed from the outset) — it sounds like supply chain complexity and city-specific customizations drove up costs led them to burn through cash too quickly. Given the tailwinds for the sector I am still optimistic about its long term prospects.
Come for the Electric SUV, Stay for the Home Battery Backup
GM announced that new electric vehicles would support bidirectional charging by 2026. I think this could end up as a significant buying factor down the road. As extreme weather events increase, battery costs decrease, and Americans keep buying large SUVs and trucks, there is going to bunch of folks for whom it is intriguing to install a home backup system using the enormous batteries in their vehicles (especially in suburban and rural areas which tend to have larger garages and slightly less reliable power).
Bidirectional chargers are more expensive than traditional chargers and the overall installation is significantly more expensive, but the value prop could be an interesting premium offering, especially with solar. It is a trend that could have major implications for the grid. Peak demand occurs when folks come home from work, which is past peak solar for the day. But, if those same vehicles that carry many people home from work can be used as a grid asset, it could enable our grid to function much more efficiently and limit the amount of new generation needed to be added (in addition to serving as multi-day backup when extreme weather hits).
Corruption = Bad
The Ohio energy policy bribery scandal we’ve discussed for years is not over yet — recently released information included the current head of the utility commission in Ohio sharing a number that he didn’t think the FBI had access to, after the FBI searched his home. Related: the law that passed as part of this corruption gutted energy efficiency standards in the state, so the state unsurprisingly now has some of the worst energy efficiency programs in the country.
The Commerce department put tariffs on 4 major suppliers of solar panels to the United States. This could create some real deployment bumps in the road over the next few years. As the Canary Media article highlights:
“The Inflation Reduction Act is driving unprecedented investment in domestic solar manufacturing from First Solar, Maxeon, Qcells and many other firms. But the U.S. likely won’t be able to satisfy its own demand for a decade, and it certainly won’t be able to ramp up to meet the country’s solar demand in the 12-month pause before Biden’s Commerce Department begins imposing the tariff. Even optimistic forecasts expect it to take years for the U.S. to attain solar self-sufficiency.”
Autonomous shuttles from Baidu started running at the Wuhan airport in China recently. Stateside, Detroit is going to roll out a pilot of autonomous shuttles for seniors from May Mobility. And in the republic of California, Waymo and Cruise are expanding the hours of their robotaxi fleet operations. Although then Cruise had an accident and had to cut back their fleet size — 2 steps forward, 1 step back.
Reilly Brennan highlighted in his weekly newsletter how the Ego cordless power tools company was introducing a minibike/moped that uses its modular battery packs (so the same battery pack could power your hedge trimmer, and your lawnmower, and your moped).
The New York Times highlights the rapid rate at which the US is depleting groundwater aquifers.
Automaker Stellantis invested $100 million into a geothermal lithium project to help solidify their battery materials supply chain.
Chicago is putting $15 million to work to fund residential building electrification projects for lower income residents.
A nuclear plant in Georgia that had been under construction since 2009 is finally done and started producing power (first in the US in 7 years)
The Biden Administration announced an increase to fuel economy standards for passenger vehicles.
Illinois utility ComEd is rolling out a new commercial/industrial rate to better enable EV charging.
FERC is trying to whip interconnection queues into shape.