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Power generation for the next generation

Andreas Goertz outlines the evolving energy of engines in a time where the energy transition’s focus on clean energy is taking centre stage.
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This article was originally published by Power Engineering International

Andreas Goertz outlines the evolving energy of engines.

While today’s power generation equipment is powered predominantly by fossil fuels, the outlook for the future of power generation is overwhelmingly clear.

In the not-so-distant future, these systems must produce clean energy from sustainable sources to comply with the target of the Paris Agreement to keep global warming below 1.5 degrees Celsius.

We believe the way humans use power must become climate neutral. For us, that transition is both a societal imperative and the greatest commercial opportunity of our time.

This article was originally published in Power Engineering International 4-2021.

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That is why we, the Power Systems business unit of Rolls-Royce, are positioning ourselves and our products for a more climate-neutral future by aiming to cut greenhouse gas emissions by 35% compared to our 2019 level by using new net zero products and technologies.

This near-term target plays a significant role in the overall Rolls-Royce Group ambition to achieve net zero by 2050 at the latest.

Key to this mission is our strategy to boost sales of eco-friendly energy and propulsion systems, which we view as growth opportunities for our business.

To make as big an impact as possible in the fight against climate change, the first priority of Power Systems is to realign our mtu product portfolio towards sustainability, which is where we currently see the largest potential for reducing emissions.

Fuel efficiency improvements and exhaust

emission reductions of ICE have made

significant steps over the past few years and

will continue to do so

Our teams have already made considerable progress by testing lower carbon alternative fuels and developing advanced engine designs to further increase fuel efficiency.

We are also pioneering breakthrough technologies to decarbonize the complex, carbon-intensive sectors in which we operate and power sustainable economic growth.

Decarbonizing the powertrain

Rolls-Royce’s mtu liquid-fuelled engine portfolio in power generation, which will be able to run on sustainable synthetic fuels from as early as 2022, plays a large part in reaching our goal.

In the past, the development focus for traditional internal combustion engines (ICE) was on improving efficiency and increasing power density. In recent years, the focus has changed to the decarbonization of the powertrain.

While many propulsion-related discussions of today’s engines are centred on the high volume of engines produced for the automotive industry, certain technology advances in the on-highway market have been and will be transferred and innovated into the off-highway market.

Fuel efficiency improvements and exhaust emission reductions of ICE have made significant steps over the past few years and will continue to do so.

However, those alone will not be enough to reach our 2030 goal, which is why new technologies must be developed and deployed, which will gradually replace conventional fossil-fuelled ICE.

Besides continuous fuel efficiency and emissions reduction efforts for fossil-fuelled ICE, we feel the following technological principles have the most leverage for emissions reduction:

  • Usage of combustion engines with sustainable, non-fossil fuels, such as synthetic fuels or e-fuels often referred to as Power-to-X; fuels like eDiesel, eHydrogen and HVO; and also second generation bio-fuels.
  • Enable our mtu natural gas engine fleet to run on hydrogen blending in a transition period and to be modified to run on 100% green hydrogen as soon as it is available. This is also a sustainable solution for CHP applications. Additionally, fuel cells running on 100% green hydrogen can play an important role in combination with renewables and Power-to-X.
  • Hybrid, decentralized power stations with a combination of the aforesaid green energy producing units, renewable energies such as solar power and battery storage systems. These microgrid solutions can be operated on or off-grid and play a significant role in the energy transition with a very decentralized and autonomous approach.

For a specific example, new generations of our mtu Series 2000 and Series 4000 engines will be qualified to run on second generation bio-fuels and on e-fuels.

These engines are used in energy supply, as well as in commercial shipping, heavy land vehicles, passenger trains and in yachts.

Development engineers are also working on engines powered by hydrogen and methanol, as well as on concepts for decentralized Power-to-X systems.

Sustainable solutions

Beginning in 2025, new technologies that Rolls-Royce’s Power Systems division has been developing, such as CO2-free fuel cell systems, will be used in power generation solutions – from balancing energy for compensating fluctuations in the public grid to continuous power and the provision of emergency power in locations such as hospitals and data centres.

Sustainable solutions that are already featured in our portfolio for decentralized, environment-friendly power solutions – such as battery energy storage systems, hybrid propulsion systems for marine and rail applications, and microgrids – will continue to advance.

Image credit: Rolls-Royce

For our standby power applications, which can encompass several hundred gigawatts of installed capacity around the globe, a sustainable solution must include the installed fleet. This is where eco-friendly fuels will be essential.

For new standby power installations, ultra-fast-start hydrogen engines or fuel cells will be an option, once the hydrogen infrastructure is in place.

For continuous power generation and peak shaving, the use of natural gas units with a transition from hydrogen blending to 100% hydrogen, even for combined heat and power, are reliable options. Plus, hybrid offerings and microgrids can reduce greenhouse gas emissions following the same transition into hydrogen power.

Even today, natural gas-powered combined heat and power/combined cooling heat and power units can reduce greenhouse gas emissions significantly compared to actual power generation by coal, HVO or single-cycle natural gas power stations.

Of course, to what extent these efforts will become reality depends on several drivers to be in place, such as sustainable finance standards, market framework regulations such as CO2 price or CO2 emissions limits, a global alignment on standards, and the energy supply chain, including the availability of infrastructure.

We are preparing for a technology mix of ICEs and electrical and strongly believe that battery systems will play an increasingly important role in all our applications. Especially in combined technology solutions, batteries will allow us to cope with the inherent peak demands in the public grids.

Impactful milestones

As a specialist for propulsion and energy solutions, Rolls-Royce is aiming for impactful milestones with its efforts.

To put things in perspective, our Power Systems products sold in 2019 before the pandemic will generate some 109 million tonnes of greenhouse gases over their service life in the field – almost double that emitted by the Greater London region every year. That results in our company having a lot of leverage in terms of lowering emissions.

Image credit: Rolls-Royce

Beyond ourselves, however, policymakers play a vital part here as well: to put in place stable framework conditions for sustainable energy solutions in the areas of industry in which we operate, thereby providing clear incentives to participate in the changeover to sustainable products.

And no individual company, sector or technology has all the answers. While we see a momentum in the market and our customer base, the willingness to deploy new sustainable technologies is very different across different customer groups.

Regulatory frameworks and policies are major drivers, but equally important is the individual interest of major industry players.

Therefore, technological change will not happen simultaneously across all segments – it will occur at various rates as each industry grapples with its own energy transition.

There is no doubt that there will be several twists and turn on the path to net zero. It may not even be that everyone takes the same path. Regardless of the route, we are committed to support the society to move into a greener future for all of us.

ABOUT THE AUTHOR

Andreas Goertz is Vice President of Power Generation at Rolls-Royce Power Systems.

The post Power generation for the next generation appeared first on Power Engineering International.



Energy & Critical Metals

‘Pragmatic approach’ needed for energy transition – Italgas chief

The chief executive of Italgas called for a “pragmatic approach to the energy transition involving policymakers, regulators and system operators”.
The…

The chief executive of Italgas today called for a “pragmatic approach to the energy transition involving policymakers, regulators and system operators”.

Paulo Gallo said that while all these actors agreed in principle on the main characteristics that the transition should have – such as fairness, cost-effectiveness, resilience, and an ability to support the development of a circular economy model – he said their recipes for success differ significantly.

Delivering one of the keynote speeches on the opening morning of Enlit Europe in Milan, Gallo said there was a need to evaluate sectoral policies in the light of the general framework.

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He said that the approach followed in European legislation is often focused on the local and immediate effect of selected policies, with little consideration for their systemic impact.

As an example, he cited the debate around the greening of gas. He said there was consensus that delivering increasingly cleaner gas was an imperative and that, as such, gas infrastructure is recognised as having a key role in the energy transition up to and beyond 2050.

And yet he said: “legislation is not always aligned with such vision.” He said individual pieces of legislation seemed to go in different directions and limit the potential contribution of these renewable gases.

“We should approach the problem from a holistic perspective. We have seen sometimes a simplistic approach.”

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Meanwhile, gas DSOs are alive to the potential of gas and are investing in both digitalisation and in connecting locally-produced renewable gas and green hydrogen to their grids.

He warned this disconnect between policymakers and industry meant there was a risk of under-exploiting the considerable potential of such gases and in turn the opportunity offered by the gas system to provide flexibility and security of supply to the European energy system would be lost.

“The gas system can be an incredible tool and an incredible lever for the energy transition.” Gallo, who is also Chairman of GD4S, said there needed to be a step forward on “true sector coupling”. “We have talked for 20 years in a theoretical way about sector coupling. We need to have a clear legislative framework and a viable solution that should not indulge in the self-interest of short-sightedness.”

We can’t wait to see you in Milan

Enlit Europe will bring the energy community together during the live event in Milan (30 November – 2 December 2021). Register here

The post ‘Pragmatic approach’ needed for energy transition – Italgas chief appeared first on Power Engineering International.

Author: Kelvin Ross

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Energy & Critical Metals

All Bets Are Off Whether the Lucid Stock Rally Can Continue

After prematurely calling a near-term top in Lucid Group (NASDAQ:LCID) stock on Nov. 11, I’ll admit so far, I’ve made the wrong call with Lucid.
Source:…

After prematurely calling a near-term top in Lucid Group (NASDAQ:LCID) stock on Nov. 11, I’ll admit so far, I’ve made the wrong call with Lucid.

Source: ggTravelDiary / Shutterstock.com

The electric vehicle maker’s turbocharged surge in price (kicked off by it making its first customer deliveries) has carried on.

Renewed hype for EV stocks, and growing optimism that this upstart will one day beat out established rival Tesla (NASDAQ:TSLA), has pushed Lucid higher. Market-wide uncertainty is knocking it back as of this writing. But it’s up for debate whether it can carry on with its incredible run.

On one hand, investor confidence in its “Tesla killer” abilities could continue to grow. In turn, shares could re-hit the highs last hit back when the deal that took it public was first announced. Or make their way to new highs.

On the other hand, the latest wave of EV mania may be fading. More analysts are pointing to EV offerings from the incumbent automakers, plus Apple’s (NASDAQ:AAPL) EV plans, as to where you should place your bets. On top of this, overarching uncertainties could still seriously weigh on LCID stock. Put it all together, and Lucid may be at risk of soon giving back a large chunk of its recent gains.

If you believe bullish sentiment will carry on in the short term, you may believe my concerns are overblown. Nevertheless, keep them in mind, as investors may take their foot off the accelerator sooner than you think.

LCID Stock and its Runaway Run-Up in Price

Even for an early-stage EV stock, Lucid’s surge in price has been staggering. In the past month, another aspiring Tesla killer, Fisker (NYSE:FSR), is up around 37%. Rivian (NASDAQ:RIVN), which wants to take on not just Tesla, but mass market automakers as well, is also up around 52% since it went public at $78 per share on Nov. 10.

During the same time frame, LCID stock is up nearly 50%. Sentiment is definitely with EV names like LCID stock.

Better yet (at least for investors already long Lucid), this mentality may carry on in the weeks/months ahead. Hitting new milestones could do the trick. So too, could updates on reservation numbers and production targets.

Then again, we could see far fewer big developments out of the company in the next few months. That could lead to a snap-back in sentiment, and a move back to the $30s or $40s per share.

There’s Still Plenty in Play to Knock it Back Down

Fears of yet another Covid-19 variant are putting pressure on stocks across the board, including LCID stock. But while this latest bit of uncertainty could prove to be short-lived, this isn’t the only thing that could stop this high-flier in its tracks.

There’s still plenty in play specific to the company that could cause Lucid to experience a further dive in price. First, there’s the possibility of no news being bad news. In other words, if over the next few months, there’s little in terms of game-changing news out of the company, more investors could opt to take profit, causing a further reversal in its latest run-up.

Second, sentiment could snap back from the bullishness seen lately, back to the on the fence view the market took on shares throughout mid-2021. What could fuel this? The release of more sell-side commentary that states there are much better EV plays out there from a risk/return standpoint. For instance, like Morgan Stanley analyst Adam Jonas’ latest take on Lucid gave shares the equivalent to a “sell” rating.

Jonas believes not just Tesla, but incumbent automaker General Motors (NYSE:GM), along with auto parts maker Aptiv (NYSE:APTV), are better opportunities. In separate commentary, Jonas has also discussed how Apple’s plans to develop a self-driving EV is bad news for automotive names across the board. If other analysts follow suit, it could drive a further retreat out of its shares.

The Verdict on Lucid Stock

Calling a near-term top in a particular stock is by-and-large a fool’s errand. Your bearish call could prove true in time. But in the interim, shares could still shoot up, thanks to the market’s exuberance lasting longer than expected.

That could still be the case here with Lucid. Or will it? More positive news could help reverse its latest pullback, enabling it to zoom past its past high water mark of nearly $65. However, a lack of news, or the release of further bearish commentary, may keep shares moving in reverse.

So, what’s the best move with LCID stock today? Wait for more indication which direction the market will send this EV play from here.

On the date of publication, Thomas Niel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.

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Lucid Stock Could Actually Benefit from the Omicron Variant

All things considered, the loss that electric vehicle manufacturer Lucid (NASDAQ:LCID) stock incurred on Black Friday wasn’t too terrible.
Source: Around…

All things considered, the loss that electric vehicle manufacturer Lucid (NASDAQ:LCID) stock incurred on Black Friday wasn’t too terrible.

Source: Around the World Photos / Shutterstock.com

As you know, the global equity markets provided their own discount, with several top names shedding serious red ink. But the usual hesitation that accompanies such widespread volatility might not affect LCID stock over the long run.

Don’t get me wrong — Lucid isn’t running on some magic fuel. After soaring over 91% in the trailing month and 160% over the trailing half-year period, LCID stock might be due for a correction.

But should shares trip up, it might have less to do with the omicron variant of the novel coronavirus and more to do with general profit-taking motivations.

To be sure, the latest drama of the Covid-19 pandemic is not something to be ignored. As the Washington Post reported, the Dow Jones tumbled more than 900 points on the day that typically marks the start of the winter holiday shopping season.

Among analysts, fears have heightened that the new strain of the SARS-CoV-2 virus could derail the global economy.

On the surface, that wouldn’t be too hot for LCID stock nor any other automotive manufacturer, electric or otherwise.

According to the U.S. Bureau of Transportation Statistics, between February and April of 2020, vehicle miles traveled hemorrhaged a staggering 42%. Even at the latest read of August 2021, the metric is down 6% from its pre-pandemic peak.

Unless you’re buying a vehicle purely for fun or for showboating, making a new purchase against potentially another low-driving-miles environment isn’t sensible.

Sure, the underlying premium EVs of LCID stock cater to the rich, but rich people usually don’t become that way by committing silly money mistakes.

Still, there’s a chance that omicron could be good for Lucid.

LCID Stock Is Built for the Pandemic

When the Covid-19 pandemic first upturned society, all of us learned quite a bit about the little mundane details we took for granted.

As far as combustion cars were concerned, I personally learned that they can be an incredible pain in the hind end when it comes to maintenance.

Like a human being, you need to keep the juices flowing in a regular car for it to operate properly. If it sits around for too long, components start to corrode or shed capacity in a surprisingly rapid manner.

For instance, if you leave a combustion car sitting for a month or two, incremental parasitic loss could drain your battery completely.

That’s why some car experts caution that a low-mileage vehicle might not always be the most reliable, especially if it was used intermittently. In that case, a higher-mileage vehicle was frequently used but well taken care of might be the better option.

However, with EVs, you just don’t have this issue, at least not to the same magnitude. An EV can sit for months without charging, which will be beneficial if we enter a lockdown to mitigate the omicron variant.

Other nations are taking a proactive stance, locking down their borders.

We still don’t know how bad this omicron variant is. However, if our worst fears are realized, the U.S. government could potentially take some drastic measures. If so, that would be a cynical catalyst for LCID stock.

Additionally, EVs feature far fewer moving parts than combustion cars. Ordinarily, this makes electric transportation more reliable than its combustion-based counterpart. But in the new normal, this advantage also makes EVs much more livable.

Drivers won’t have to deal with as many maintenance items in EVs as with combustion cars, further bolstering the case for LCID stock.

A Word of Caution

Although a return to lockdowns or strong mitigation measures might help LCID stock, investors shouldn’t bank on it.

True, the omicron variant presents serious concerns for the international community. Yet as the AP noted, “Some previous variants, like the beta variant, initially concerned scientists but did not spread very far.”

That’s not to say you should ignore this strain. Obviously, it was enough to spook the markets so there might be something to this possible threat.

Nevertheless, LCID stock could potentially be sitting on a best-of-both-worlds scenario. If the pandemic worsens, EVs have proven to be the superior urban platform. But if the omicron variant turns out to be a false alarm, Lucid could resume its compelling business narrative.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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