Tag Archives: Electrolysis

Tesla’s Entry into The Net Zero Game: “Sustainable Energy for All of Earth”

From Manhattan Contrarian

By Francis Menton

One of the core subjects of this site for several years has been doing reality checks on the schemes of Net Zero central planners. Is there any chance that these zero carbon economy schemes might work? Or are they just dreams that ignore obvious physical obstacles in a religious zeal to reach an imagined future utopia?

My prior writings on this subject are summarized in my December 2022 Report “The Energy Storage Conundrum,” and in my recent posts (here and here) on the work of Bill Ponton regarding the UK.

On April 5 Tesla dropped into the debate a big Report of their own, with the title “Sustainable Energy for All of Earth.” Tesla reaches the exact opposite conclusion from me and the people I have cited in my writings on this subject. From the Executive Summary:

This paper finds a sustainable energy economy is technically feasible and requires less investment and less material extraction than continuing today’s unsustainable energy economy. While many prior studies have come to a similar conclusion, this study seeks to push the thinking forward related to material intensity, manufacturing capacity, and manufacturing investment required for a transition across all energy sectors worldwide.

Could that be? After all, this Tesla Report is clearly backed by many millions of dollars of funding, with dozens of smart and highly-paid people beavering away for months or even years on sophisticated computer models to come up with impressive results. By contrast, the people on whose work I have relied — Roger Andrews, Ken Gregory, Bill Ponton — as well as myself, are all unpaid volunteers working on our own and with no resources other than the internet and perhaps an Excel spreadsheet program.

Before getting into some specifics, I should mention that I have a good deal of admiration for Tesla’s CEO, Elon Musk. He is a bona fide creative business genius. However, let’s not lose track of the fact that all of his main pre-Twitter businesses — electric vehicles, batteries, solar panels, space launches — are almost entirely if not entirely dependent for their revenue on the gaming of government subsidy and handout programs. The electric vehicle business, in particular, that underlies the lion’s share of Musk’s net worth, has a valuation that can only be justified by a faith that essentially all vehicles will soon be electrified. So far, the market share of EVs has been almost entirely dependent on a combination of government subsidies and compulsion (e.g., “fuel economy” standards that exempt EVs). If EVs don’t take over the auto market, then Musk may be no wealthier than you or I come 2030. I suggest keeping that in mind when considering the Tesla “Sustainable Energy” Report.

There is a huge amount of detail here, and I only have time for so much. But let’s take a look at how this Report proposes to deal with the energy storage for the U.S. Recall that Ken Gregory calculated that if the U.S. fully converted to wind and solar generation, it would need to store approximately 250,000 GWh (which would be 250 TWh) to make it through a full annual storage and discharge cycle, given the seasonal pattern of wind and solar generation. Try to provide the 250 TWh of storage with lithium ion batteries at $200/KWh, and that will run you about $50 trillion. That would be slightly unaffordable, given current U.S. annual GDP of under $25 trillion.

Here is the chart from the Tesla Report on how they propose to deal with storage for the U.S.:

As you can see, their answer is almost entire hydrogen. The total storage proposed, at 120 TWh, is less than half of what Gregory calculated as needed, but not wildly out of range.

In Tesla’s favor, the idea of using hydrogen for the storage is substantially less insane than relying mostly on batteries. But, as discussed in my energy storage Report, hydrogen produced by electrolysis from water using electricity only from renewables is far from cheap. For my Report, I found a figure of $4-6/kg for producing this “green” hydrogen, which translates to a price of $32 – 48/MMBTUs (the units in which natural gas prices are typically quoted). By contrast, natural gas prices fluctuate, but over the last ten years they have always been under $10/MMBTU, and mostly around $3-5/MMBTU. The current price is more like $2/MMBTU. The Tesla Report cites a price of about $3/kg ($24/MMBTU) just to store the hydrogen on an annual basis.

As also discussed in my energy storage Report, hydrogen is more challenging to deal with than natural gas in every respect. It is less energy dense (meaning, more pipeline capacity needed to transport the same amount of energy), it embrittles steel pipes, it is more explosive and dangerous, it is more prone to leaks, and so forth. To move to hydrogen as the vehicle of energy storage would mean creating an entire national infrastructure of new facilities. Next to none of that currently exists, nor is it under construction or even in the planning stage. I can’t find any effort in the Tesla Report to estimate a cost for any of this.

And private investment will not build it. Why? For the simple reason that natural gas is cheaper and better in every respect. Nobody is going to buy green hydrogen at $40/MMBTU when natural gas can be had for $5, and nobody is going to build the infrastructure to transport and store hydrogen until it is price competitive to do so.

So natural gas can say all they want that their zero carbon energy system “requires less investment and less material extraction,” but the fact is that the market is saying otherwise. The whole “hydrogen economy” thing is completely dependent on a new economy of government central planning and handouts, and is sitting around waiting for the next round of hundreds of billions of dollars of government subsidies to get it going.

Without going into detail on other sections of the Tesla Report, I’ll just say that there are plenty of obvious fantasies. For example, how about air travel? No problem!:

Longer distance flights, estimated as 80% of air travel energy consumption (85B gallons/year of jet fuel globally), can be powered by synthetic fuels generated from excess renewable electricity leveraging the Fischer-Tropsch process, which uses a mixture of carbon monoxide (CO) and hydrogen (H2) to synthesize a wide variety of liquid hydrocarbons, and has been demonstrated as a viable pathway for synthetic jet fuel synthesis.

Just another minor item to be invented new from scratch.

Why would a Tesla put out a Report like this? It doesn’t take much thought to understand the reason. Getting the bureaucrats excited about their utopia coming to pass is the route to the mandates and subsidies for EVs and batteries for decades to come, all of which will maintain Musk as the world’s richest man. And if it all doesn’t work in the end? Somebody else’s problem.

So, Mr. Musk, if all this can be done for “less investment” than our current system, there should be real money to be made by building the demonstration project to show us all how it works. How about taking one of the smaller Hawaiian islands (Maui?), and installing the wind turbines, solar panels, hydrogen electrolyzers, and storage facilities to go 100% carbon free? The Hawaiians will all save money, and you’ll make additional billions. I hereby call your bluff. Put up, or shut up!