Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
Episode 2 with Craig Wood
118 Plays2 years ago
Anthony, Karthik, and Mike talk green steel (and Cara Delevingne) and are joined by Craig Wood of Vast Solar to learn about concentrated solar power.
Recommended
Transcript
Introduction to Sustainable Innovation
00:00:12
Speaker
Hello, and welcome to the Innovation Matters podcast. It's the podcast about how sustainable innovation can bring you fossil-free grills, a thing that you definitely needed. And that's not the grill you grill on outside. That's grills for your teeth. I hope we're going to be talking a lot about grills today, but I'm Anthony
Cultural Influence and Ad Campaigns
00:00:34
Speaker
Skiavo. I'm joined by my co-hosts, Mike. Hey, everybody.
00:00:41
Speaker
What's up? What's up? What's up is that the Europeans are attempting to do culture again. Something that hasn't hasn't really worked for them since like, I don't know, maybe like 1875.
00:00:55
Speaker
I would have to go back and double check there, but Vattenfall, they're a sort of major Scandinavian utility company. They've released a couple of different videos, new ad campaign, one in which they partnered with the UK rapper who goes and buys fossil free grills, fossil free steel grills. So the steel is made of
00:01:22
Speaker
Well, it's regular steel, but it's produced presumably via their hydrogen direct reduction of iron process that they're they're partnered with the steel industry in that that a couple couple of Swedish steel mills, I believe. And they also have sort of like gamer girl bathwater 2.0 with this industrial emissions spray, they partnered with
00:01:46
Speaker
Cara, who is this person? Cara Delevingne. So first of all, the way they introduce her is climate activist and model. And I kind of feel like she's more of one of those things than the other. But anyway, I don't know, Mike, this seemed to really get in
Ad Campaign Effectiveness in Non-consumer Products
00:02:08
Speaker
under your skin. So I'll turn it over to you first. What is the deal here?
00:02:12
Speaker
I wouldn't say under my skin, but I do think it's kind of fascinating. We were having an interesting conversation with some of our colleagues about why are they doing this? I mean, I guess technically you can go by the face mist. The steel is not really a consumer product.
00:02:32
Speaker
And they're very kind of strange and funny ad campaigns. So I'd encourage everybody to go watch them. They're on the company's website. It's currently the, if you just go to their homepage, it's like the Cardo Levine's the main banner ad there. And so I think it's, part of it is,
00:02:54
Speaker
Vanfall is, you know, they are a utility, right? They have customers, even though they're not selling these products directly. I think they see some benefit in, you know, being seen by the general consumer as an innovative and eco-friendly sort of company.
00:03:17
Speaker
And I think it's probably also, you know, being in a very highly regulated industry, it's probably politically beneficial for them to to be seen that way. And I'm sure for recruiting and things like that, right? It's always, you know, you want your company to have a good reputation.
00:03:34
Speaker
Um, I'm not sure that these probably fairly expensive advertising campaigns for a product that you're not like really actually selling is, is, is the best way to go about that. But I, um, you know, I think it does reflect sort of the, the uncertainty about that, that a lot of these companies have and maybe the anxiety, but how are we actually going to make money off of these kind of green products?
Economic Challenges of Carbon-free Marketing
00:04:03
Speaker
Because.
00:04:04
Speaker
in carbon free products, because right now that's the reality is that they are more expensive. You're not going to be able to with fossil free steel or, you know, CO2 based chemicals and, and whatnot, you're not going to be able to compete directly on the sort of traditional economic and performance metrics. I mean, Karthik, you were saying that of all, they're already like a very green
00:04:27
Speaker
utility. Why even do this, I guess? Aren't they just going to sell electricity and government's just going to regulate out the emissions? It just seems like, even the point you brought up, which I think is interesting, Mike, about the idea of how we're going to actually make money. It's something I thought a lot about, but that's really abstracted away from the utilities, especially utility like that in fall.
Green Credentials or Greenwashing?
00:04:57
Speaker
Yeah, I mean, for me, the weirdest thing was even before we get into the energy aspect, I didn't even know that face mist was a thing. You just wash your face with water, I guess, but what's a face mist? You've got a natural glow. When we pivot to video, Karthik's going to be our leading guy because he's just naturally beautiful. Naturally. Dewey. Yeah. I guess. But yeah, yeah, I mean, Fattenfall, the name in Swedish literally means waterfall.
00:05:26
Speaker
Uh, hydro is there. Um, I think they're predominant source for energy. So I don't even know why they want to promote themselves as a green company. Uh, I think they just need to focus on deploying more stuff. And even if you look at the energy mix in Europe, I think when I was doing my masters a couple of years ago, uh, I think the, I think the two Scandinavian countries, so Norway and Sweden was sort of like already 52% green and like 48% green, something like that.
00:05:55
Speaker
That was because they have a lot of hydro. If you compare it to the Netherlands, the Netherlands is like at 7% of renewable electricity generation. They don't have to prove anything. I think this will come across more as greenwashing rather than anything else. It's just a botched up marketing ad for me. I didn't even like the video personally.
00:06:18
Speaker
Well, we've already established you're not the target audience for the face mist. Yeah. Oh, yeah, that's also true. But but yeah, I think it's, you know, at the end of the day, if these the or at least not at the end of the day, but at the day right now, the time right now, so to speak, it's it is, you know, something like green steel.
Consumer Willingness to Pay for Green Products
00:06:43
Speaker
The initial success and growth of that industry is going to depend on either
00:06:49
Speaker
customers, the B2B customers, and ultimately consumers being willing to pay some level of a premium for this product to get the carbon-free steel over the conventional one. And I think this ad campaign, while it's maybe a little misguided, reflects the
00:07:14
Speaker
the questions that these companies are having about how are we actually going to make that happen? I'm not completely bought in on this idea. I do think there's an assumption that these things, A, that they'll cost more money, which is true now, and that could go in the future. But I guess a bit more broadly, you see this with plastics a lot.
00:07:40
Speaker
where the chemical company position is, hey, we have to do all this recycling or we have to build all this infrastructure to like change, make our plastics more sustainable. And how are we gonna do that? Who's gonna pay us to do that basically, right? Like how are we gonna get more money to cover our costs here? And the reality is like actually the existing products, the value of those is gonna drop.
00:08:06
Speaker
Like there will be a premium really, but it will be more like, there's a sort of assumption that the prices and the value of the existing products are going to remain static within this. So I don't know. I'm not really convinced. Like I just think a lot of these other things, especially if carbon taxes or like the carbon border adjustment mechanism in Europe comes in.
00:08:32
Speaker
All these other things are just gonna get more expensive. So it's not really about convincing anyone to pay a green premium per se. There will be economic damage or economic hardship, but I always see the distribution of that more as being a question of how it's distributed among companies by different types of public policy.
00:08:56
Speaker
as opposed to like, oh, how do we get consumers to accept this type of like, like opt into purchasing a pricier product? Like, I don't really think that's the mechanism there at all.
Challenges in the Fusion Industry
00:09:14
Speaker
But I guess that brings us to our next point, which is totally unrelated, Fusion. Karthik, you would kind of flag this up when we were doing our prep, but there was an interesting report around Fusion that you wanted to talk about.
00:09:32
Speaker
Yeah, so the Fusion Industry Association, which is let's say a conglomerate of different fusion energy pursuers. It's not much of an industry association. You sort of need an industry to do that, right? Yeah. It's not there yet, but essentially they were highlighting some of the challenges that the
00:09:55
Speaker
the industry faces. They were looking at things like, okay, what's the most, if you would say, challenging aspect if you're a nuclear fusion developer? They had about 38 companies participate.
00:10:15
Speaker
There were some companies who even failed to respond, which is of course not a surprise given they don't want to disclose a lot of stuff. But the most interesting part for me was that pre 2030, which is when companies see themselves actually pushing the commercialization of fusion to the next stage, feel that it's more challenging to get a net energy gain in fusion.
00:10:41
Speaker
more than, you know, facing an integrated systems engineering challenge. So to give some context to our listeners who don't understand how fusion works, uh, you have this reactor. All of that fusion works. I'm confident only the most brilliant people listen to this podcast, but yeah, but just in case. Yeah. So you have this, you know, fuel is injected into this reactor core. This fuel is, you know, combusted produces heat. This heat produces steam.
00:11:08
Speaker
Uh, but you need to, you know, you have so many other aspects, uh, with the heat itself, because, you know, you're essentially fusion reactions take place at millions of degrees of Kelvin Celsius. You know, at that point, it doesn't matter what units you use. It's just very, very hot. And so, uh, you know, it's about maintaining those plasma conditions or those fusion conditions as long as possible and sustaining them so that you can actually extract the energy that's being produced now.
00:11:37
Speaker
For me personally speaking, because of these challenges, the systems engineering aspect is tougher. I think you can still get a net energy gain of whatever is required, but maybe for a nanosecond or a millisecond for durations that frankly do not make any sense to the industry or to us. But I think it is possible, but sustaining those conditions are the challenge for me.
00:11:59
Speaker
Um, maybe you see that differently, uh, uh, maybe the fusion industry does, but I mean, I think the systems engineering challenges are always sort of. Under underrepresented or underappreciated by startups by early stage developers. We see that all the time, especially in materials. Um, you know, just like so many people fail to anticipate all the logistics necessary to do any of these circular sustainable things. And, uh,
00:12:29
Speaker
So I think it's going to be a big wake up call and maybe a decade for people. Yeah. I think it's not even, I mean, I don't even think a decade is necessary. I think most of these fusion startups have deadlines for 20, 27. So I think within the next five years, we will know whether fusion is actually going to impact the energy transition or not. Yeah. And I think that, you know, we're.
00:12:59
Speaker
Our next segment is with Craig Wood, and he's the CEO of a concentrated solar power startup that, like you sort of mentioned, has been grappling with a lot of these engineering challenges.
Vast Energy's CSP Technology
00:13:13
Speaker
And really sort of, there's this very basic or more simple implementation of the technology that actually works quite well and has been deployed in a lot of different places. But the big promise of the technology
00:13:25
Speaker
has been in a lot of ways stymied by these sorts of engineering challenges. So, you know, not to peel back the layers, but we have a really interesting conversation coming up in the second half to kind of dig more into that in a real sense. Yeah. Yeah. And infusion is going to be, you know, if it ever succeeds is going to be very much like CSP or a lot of renewable technologies. It's very high upfront capital costs.
00:13:55
Speaker
to get it started, but relatively compared to fossil fuels, relatively low operating costs. So you're going to see the sensitivity to things like interest rates, which are obviously much higher now than they've been for a lot of the past decade plus that's going to affect a lot of those.
00:14:16
Speaker
Fusion interest rates right now is the least of their worries, right? But once they get to that point of actually if and when they actually solve all these engineering challenges to get it scaled up, that's the kind of dynamic that they're going to face. So I think that conversation will be sort of illuminating for that as well. Yeah, we should definitely get a fusion person, a fusion CEO on the startup and ask them about interest rates. I think that would be an extremely good use of their time.
00:14:47
Speaker
Well, look, when that happens, you'll hear about it here first on the Innovation Network podcast. So now we're going to head to our interview with Craig Wood. We're back now with our guest, Craig Wood, the CEO of Vast Energy.
00:15:04
Speaker
Craig is a pretty experienced leader. He's done a lot of things. The company, he joined Vast in 2015. They are an Australia based company and they're working on a really interesting type of energy technology that is concentrated solar power.
00:15:21
Speaker
Concentrated solar has a really long history. I think the first examples of it actually date to the 1800s, but it's been a technology that's had kind of a changing role within the future of the energy transition. So we've got Craig on today to talk to us about it, how it works, what it does, and really what the future holds for concentrated solar power. Craig, thanks so much for joining us. Thanks very much for the opportunity, Anthony. Great to speak with you.
00:15:50
Speaker
Yeah, absolutely. So can you start by just giving us a little background about Vast and yourself and maybe a little bit on the history of CSP as well? Yeah, sure. So Vast, as you mentioned, is an Australian company that's been around for over 13 years.
00:16:08
Speaker
Pretty early on, the founders of our business realized that PV was going to become very cheap, but that the challenge would be dispatchability, basically how to take energy particularly from the sun that arrives during the day and make that available overnight. When you go and look at what you can use to make dispatchable energy at scale,
00:16:32
Speaker
There are really only two options that emerge. One of those is pumped hydro and if you're in a place that's suitable for that then absolutely that's an important part of the transition. The other option is concentrating solar thermal power and that's really the technology of choice if you're in hot dry climates.
00:16:54
Speaker
So as I said, our founders in our business realized that and we really spent the first 10 years in business developing what we believe to be the world's best concentrating solar thermal technology. Ultimately, that technology was awarded the International Energy Agency's Technical Innovation Award in 2019, which was a very nice end to a decade of tech development.
00:17:17
Speaker
And really since then we've been spending our time developing projects initially in Australia but increasingly looking at offshore markets to deploy our technology at utility scale and really start making a difference in the transition.
00:17:33
Speaker
So Craig, you touched on something there which is the thermal aspect of concentrated solar power that I think is really important because for us the question of heat has come up so much in the last year to 18 months as this sort of unsolved problem of decarbonization in the energy sector.
00:17:55
Speaker
Before we get into that, though, you mentioned this decade of tech development, and I mean, there were a number of CSP efforts as far back in the US in 2010.
Evolution and Innovation in CSP
00:18:08
Speaker
There were a lot of people trying to develop CSP at that time. Why did it fail? What's different about your technology that makes it positioned to succeed now?
00:18:19
Speaker
Yeah, look, it's an excellent question. And actually, the history, particularly in the US, goes back to the 80s. There's been, we sort of look at our technology as a third generation of CSP. The first generation initially in the US in the 80s was what's called parabolic trough systems.
00:18:35
Speaker
They were a modular design that used large parabola-shaped mirrors that basically tracked the sun east to west to gather energy from the sun, and then they stored that energy in the form of heat in molten salt.
00:18:51
Speaker
That technology is well proven. In the 2010s, there was many, many gigawatts of it built in Spain, for example. And really at the moment, if you walk around the world anywhere where it's hot and sunny, you see parabolic trough technology deployed to the tune of about six and a half gigawatts in total.
00:19:14
Speaker
The modularity of that tech was terrific. Bankability is great. The only real limitation of the technology was temperature and the reason for that was the fluid that the technology used to gather the energy from the sun was a mineral oil and was limited to 400 degrees Celsius.
00:19:36
Speaker
And once you take that heat at 400C, put it into some storage, and then use it to create steam to spin a turbine, ultimately you end up with a relatively inefficient power cycle. And so you end up with, at the end of the day, electrons that are quite expensive. What people tried to do was to simplify things and move to what are called central tower designs, generation two of the technology. They did away with the mineral oil, so they just used the salt for both storage as well as from energy gathering from the sun.
00:20:05
Speaker
And what that allowed was an increase in the temperature up to 550 degrees Celsius in the storage, which meant that power cycles could be run at 538 Celsius, and that starts to become an efficient steam cycle.
00:20:22
Speaker
So those plants, they're the current state of the art. They're a plant just recently been commissioned in Dubai. The Chinese are building a number of these projects. As you mentioned, there were some projects that were built in the early 2010s in the US of this sort. And so that's where the world is at at the moment. The challenge with that technology is that there have been significant availability issues.
00:20:50
Speaker
In short, the problem is that the sun, because it's so concentrated, when you have clouds that come and go, you can get very large changes in the solar flux very quickly. And at a fundamental level, the salt is, it's an excellent storage medium, but it's actually not particularly good as a heat transfer medium because its thermal conductivity is relatively limited.
00:21:14
Speaker
And ultimately that mismatch between the very rapid flux changes and the ability of the system to respond has led to equipment failures that have taken those plants offline for extended periods of time.
00:21:29
Speaker
What we've done with our technology is essentially combine the best of V1 and V2 to create a new V3 of the technology. So our system is actually modular and we use a fluid, a third fluid, so we have a separate heat transfer fluid. And in our case, we've opted to use liquid sodium metal, so elemental sodium in the liquid state.
00:21:53
Speaker
We use the sodium to link the solar receivers together, and that allows us to have, as I said, that modular front end. But the other important thing that we've done is created a system that allows us to have the high concentration factors of the tower morphology. So we call it a modular tower CSP system, and it's really the sodium as the heat transfer fluid that enables that system to work well.
00:22:20
Speaker
Sodium is a, it's quite a reactive element. Many people might remember their high school science when you drop sodium into water. The reality is whilst it's reactive, it's in fact, it's very easy to use and to operate safely in an industrial setting. Certainly if you compare it to the mineral oil that's already used in six and a half gigawatts of CSP plants, it's materially easier than that.
00:22:48
Speaker
And, you know, as another comparison point, if you had a sodium fire and a diesel fire, the diesel fire would burn four times as quickly and produce four times as much energy. So sodium has this bad reputation, but the reality is it's really quite undeserved.
00:23:05
Speaker
The other thing to note about sodium is that it has been used as a heat transfer fluid in the nuclear industry for more than seven decades. And so a lot of the work that we've done in designing our system to be right spec for a renewable application has been standing on the shoulders of the work that's been done over many decades by
00:23:28
Speaker
some very clever people in the global nuclear industry. So it's, as I said, it's the sodium that's important. The sodium, you know, it has a bad reputation, but between the nuclear work and then also the demonstration plant that we have built, operated for nearly three years and decommissioned, we're quite confident that the system will deliver the benefits that we expect.
00:23:53
Speaker
Yeah, Craig, it's interesting you talk about sodium and innovations in CSP. This is, of course, the Innovation Matters podcast.
CSP Innovations and Geographic Suitability
00:24:01
Speaker
And as you mentioned, if you go talk to any person about CSP, the first thing that comes to their mind is a solar tower that occupies a large amount of area. You have a large solar field with a very tall tower in the middle of it. So my question to you is sort of,
00:24:19
Speaker
What are you seeing in terms of innovations in CSP from other developers as well? Is it just solely focused on the heat transfer medium, or are you seeing maybe rewinding the clock and going back to parabolic troughs or other modular systems? And where do you see innovations in CSP going in the future? That's an excellent question, Karthik. We could be here for hours. We've got to be careful.
00:24:50
Speaker
Look, at its core, CSP is relatively straightforward. You're effectively taking mirrors in some configuration, concentrating the sun's energy, gathering and storing that as heat. What's really occurring in terms of the innovation are variations on how you do that at each of those stages. So a good example would be our use of sodium on the front end of the plant to enable that modular tower morphology.
00:25:15
Speaker
There are certain programs that are operating around the world that are trying to push the power cycle into being a supercritical CO2 power cycle. That has a couple of theoretical advantages. Number one, at high temperatures those power cycles become extremely efficient.
00:25:36
Speaker
So to give you some numbers, our utility scale plants are somewhere between 42 and 45% efficient on the steam cycle. By the time you put a big SCO2 power cycle in, you might be able to push that up to 55 plus percent. So that's a material increase in what ends up being the largest inefficiency in the CSP system.
00:25:58
Speaker
People are also, in order to try and support higher temperature operation in SCO2 turbines, people are working on what are called particle receiver and storage systems. So instead of using liquids, in our case, sodium and molten salt, people are trying to use small engineered particles, typically ceramics, that they fall as a curtain through the sun beam, and then they're able to store those.
00:26:27
Speaker
A lot of that work has been going on for many years in laboratories and there are starting to be demonstration projects that are emerging, but that's still some years off being commercially mature. So there's a variety of different options that people are pursuing.
00:26:44
Speaker
The other thing that I think is interesting in CSP, and perhaps this is a nice leading to a discussion about some of the more thermally driven aspects, but CSP works best in hot sunny places. So if in simple terms you get your Google Maps, or in fact whichever map in software you like, put it on satellite view and look at the world. Anywhere that's orange, red or yellow by and large is suitable for CSP.
00:27:12
Speaker
anywhere that's green, blue, or white is typically not suitable for CSP. In the places where CSP is suitable, it is a clear winner. There is actually no other primary energy source that gets close, apart from, obviously, PV and wind, but they're intermittent, so they fulfill a different role in the energy stack.
00:27:35
Speaker
By contrast, if you go to somewhere that is green, CSP will typically not be the cheapest form of generation. But what we can do with CSP is actually dispense with the solar collector piece, so essentially put the mirrors in the bin.
00:27:53
Speaker
And then what we're able to do instead is actually put basically a giant heater on the salt tank that allows excess renewable energy from, let's say, PV and wind that might have been overbuilt in a particular location to be converted into thermal energy installed in a salt.
00:28:15
Speaker
So this idea of resistive heating of the salt is something that a number of organisations around the world are working on, particularly in places where you might have excess intermittent renewable generation that's been built, but no effective way to store that for long durations.
00:28:36
Speaker
I should say, obviously, batteries are great. We love batteries. We're, in fact, developing a 104-meter battery project in Australia.
CSP vs. Battery Storage
00:28:45
Speaker
I was just going to ask you about that because I think there's a parallel. The reality is batteries are only good for two to four hours. After that, there are no economies of scale in batteries. They're just much more expensive because there's nothing that drives the cost down. If you want eight hours of battery storage, you buy two times four hours of battery storage.
00:29:06
Speaker
by contrast, solar thermal and pumped hydro for that matter have very significant scale economies.
00:29:13
Speaker
In terms of the energy mix and the transition, if you're looking for something that fills that 12 to 20 hours of storage requirement, basically the overnight energy once the thermal generation drops out, that's the role that CSP and pump hydro will play. So again, to repeat, we are fans of batteries, they absolutely have a role, but we actually don't view them as particularly competitive to the product that we have.
00:29:38
Speaker
I think that's an important point because so many, it's easy to look at the history of CSP and you mentioned there was this sort of time where the costs of solar PV dropped precipitously and that forced to sort of, I think, change or a pivot in how
00:29:58
Speaker
the CSP developers position themselves. And one of the things we've heard, and Karthik, I know you were talking about this, is what if battery storage, again, just really precipitously drops in terms of cost? And it seems like you're making the argument that it's really a different category of demand response, really a different category of storage altogether.
00:30:22
Speaker
Look, I'm not a battery expert. And if some magical battery chemistry or configuration for the anodes and the cathodes emerges that's very low cost, then frankly, that'd be great for all of us. What you tend to find, though, is that chemistry, physics, and economics really haven't changed very much for quite a long time, with a few exceptions.
00:30:47
Speaker
And the reality is a lot of the battery options that are being explored have been around for a very long time, and the progress is incremental, not necessarily revolutionary. The other thing that's important to understand is that CSP, when done properly, in the right locations at the right scale, is extremely cheap.
00:31:13
Speaker
said that it's those scale economies once you start building plants north of, at least north of 100 megawatts, but typically, you know, two to 250 megawatts.
00:31:22
Speaker
You get very cheap energy because the raw materials to make those plants are actually relatively inexpensive. We're talking about, yes, there's some stainless steels, but a lot of it's glass insulation. It's pretty low tech stuff when you compare it to some of the more exotic requirements for PV and batteries.
00:31:45
Speaker
I'm not a futurist, but I have spent quite a lot of time looking at the underlying drivers of the technologies. And there's a reason why we continue to prosecute the case for CSP or particularly for thermal storage in those long duration applications.
00:32:03
Speaker
Yeah, looking at the long duration aspect as well, as you said, none of us on this call are battery experts, but we are also seeing a lot of interest in redox flow batteries and these next generation chemistries that could maybe economically trump CSP. My question was more so down to the energy density part of CSP because now, I know this might be a touchy topic maybe in Australia to talk about nuclear, but
00:32:32
Speaker
I know that a lot of interest in nuclear has come up recently because of incidents in Ukraine and gas prices and whatnot, which is, of course, a whole other discussion.
CSP for Industrial Heat
00:32:48
Speaker
But do you see sort of nuclear coming back up? I know Australia is still anti-nuclear, but do you see that sort of trend changing and maybe also dent efforts in CSP?
00:33:07
Speaker
So I do see nuclear playing an important role, not necessarily because of its energy density. So if we have the good fortune here in Australia of having really substantial solar, wind, mineral resources, we've got basically, not to be too blunt, but we don't need nuclear because we've got many other less expensive sources of energy. And that's, I think, the important distinction. If I contrast
00:33:23
Speaker
Just because of its energy density, you know?
00:33:36
Speaker
you know, somewhere like Australia to let's say one of the Southeast Asian nations where there's a lot less land where the renewable resources are not as good. Obviously there still needs to be significant energy provision and in a world where you are fossil free, I believe there's really only a couple of options. You're either importing fuels in much the same way as a lot of those economies currently do
00:34:03
Speaker
I think over time obviously that'll move to hydrogen and derivatives.
00:34:09
Speaker
personal view is I think there'll actually be quite a bit of gas that gets burned in the meantime, or it's nuclear or it's a combination of both. And so the place where I believe nuclear will have a renaissance is in a lot of those markets where there's not an abundance of renewable resources, but there's still obviously energy security requirements.
00:34:34
Speaker
The other thing about nuclear that's interesting is obviously the ability to generate thermal energy. Anthony, I think you mentioned it in your introduction. There's a real issue that I think people are only just starting to wake up to around how we actually provide green heat for industrial processes and increasingly for the emergence of the fuels industry.
00:34:57
Speaker
And so that's the other place where I think nuclear may have a role, albeit it is still more expensive than what we're able to do from Sunshine. Yeah. So that's a good segue. I mean, we've seen companies like Dow in the chemical space invest in nuclear with the ostensible purpose of creating, among other things, high temperature steam for processes like steam cracking. So how do you see something like CSP playing and competing there? I mean, there is, of course,
00:35:25
Speaker
geographical limitation as you mentioned, but there is plenty of oil and chemical production in the Middle East, which is also a place where there's been historically plenty of deployment of CSP. So is there an opportunity in terms of the right sizes and scales to bring CSP to those types of high temperature applications?
00:35:49
Speaker
So in a word, yes, but it doesn't necessarily have to be high temperature applications. So if you think about most chemical processes, what you're in essence doing is providing energy, ideally in the cheapest way possible. Historically, that's been done by more often than not burning fossil fuels, and that allows you to get to the required temperatures.
00:36:11
Speaker
We're working on a couple of things with some partners where we're looking at using CSP. We store heat at 550 Celsius, but even if you need heat that's a high temperature than that, there are options to preheat up to 550 and then use electricity to finish the rest of the job.
00:36:30
Speaker
What we find when we look at the economics of those opportunities is that because we're able to produce very cheap heat, it actually makes sense to maximise the amount of preheating that's able to be done using the CSP systems because it just ends up with cheaper products at the end of the day.
00:36:47
Speaker
So do we see opportunities? Absolutely, we do. I think one of the big limitations is, well, you can either view it as the geographic limitation of CSP, i.e. our energy's cheapest when we're in the desert. But there's another thing that plays into it, which is a lot of these existing facilities that people are very keen to continue to use for obvious reasons, skilled workforces,
00:37:15
Speaker
environmental, cleanup liabilities, all of those things. A lot of those are not in places that are suitable for the deployment of CSP. We are currently working on one project with a major global FMCG company, where we're in fact retrofitting using a parabolic trough technology in direct steam. So for various reasons, it wasn't appropriate to use the VAR system.
00:37:40
Speaker
but we're working with them to install a CSP system to displace in the order of 51% of their gas. Now that'll be a terrific deployment, but it's quite uncommon to find the combination of solar resource available land and a brownfield application where that can make sense.
00:37:59
Speaker
So in our view, CSP will play a role in process heat, but we think it will be more often than not on new build opportunities. And we're working on a number of those, particularly where we're able to provide heat on a continuous or nearly continuous basis, plus dispatchable electricity that's then able to complement PV and wind and batteries in larger off-grid systems.
00:38:30
Speaker
Yeah, and it's interesting you talk about even new build opportunities. My question was more so down to the economics of it. So when do you see that tipping point where CSP for heat becomes cheaper than incumbent sources for heat?
00:38:50
Speaker
or to put it this way, do you see CSP or by when do you see CSP becoming cheaper than let's say burning fossil fuel when combined with carbon capture?
00:39:02
Speaker
Karthik, it is today. So if you go back 12 months when the fossil fuel price spiked because of the Ukraine situation, CSP was a complete no-brainer. With prices where they are today, even without carbon priced or sequestered, CSP is still, in this application that we're looking at in Australia, is still going to be cheaper than burning gas.
00:39:29
Speaker
If you look at situations where the solar resource is better, and we've got a couple of these that we're developing at the moment here in Australia, CSP is materially cheaper than gas at virtually any price, where you've got situations where the sunshine is very good. So the limitation, I think, on the deployment of CSP
00:39:52
Speaker
really has been, it's almost knowledge, I'd say, at this point. The existing technologies, trough technologies, the vast system, they're proven. It just comes down to people actually changing the way they think about their industrial system, because the reality is there are significant upfront CAPEX requirements in any renewable technology.
00:40:13
Speaker
those are paid back over time because you don't have to buy fuel to run the system over the years. So it's really, I think, more of a deployment question. That said, if you start pricing carbon or sequestering and putting the cost of that on the users of the fossil fuels, CSP will be a no-brainer. So that's the situation at the moment.
00:40:39
Speaker
All right.
Podcast Conclusion and Farewell
00:40:40
Speaker
Well, Craig, it's only for us to thank you for coming on and sharing your knowledge with us on CSP. We really appreciate it. And I'm sure you're going to be hearing more from us about this topic as we go forward. And if big changes do happen, we get the, uh, the magical breakthrough battery that Craig mentioned, but, uh, thanks again so much for your time. We really appreciate it. Thanks so much, Anthony. Great to speak.
00:41:08
Speaker
Yeah, great to speak and I wish Australia good luck in the ashes. Thank you. Only one match to go until we win it. Yeah, absolutely. Yeah, that's right. Any UK listeners of this podcast will be truly, I think, truly devastated. We'll leave it there. Innovation Matters is a production of Lux Research. For more, visit www.luxresearchinc.com.