This week we turn to technology. I'm talking to Paul Hughes about new applications for batteries. How they can store energy, save energy, save money and cut carbon emissions.
As Paul says, if you're selling your solutions simply on environmental benefits it's a difficult sell. If you can show it pays for itself in two or three years or less and the system lasts much longer than that, it starts to make business sense.
Here's what we discussed.
Shift Clean Energy
So Paul, welcome. You are president and co-founder of Shift Clean Energy, and thank you for talking today to the Sustainable Futures Report.
Thank you very much for the offer.
Charging or Swapping?
A major part of your business is batteries and we're getting more and more familiar with batteries. Now if you've got an electric car, the more powerful they are and the longer range you get, the longer you have to sit at a charging point, especially if you can't find a high speed charging point. So looking at your website, I was intrigued to see that you have come up with the idea of swapping the battery, not for cars, but tell me about these applications that the Swappable Battery is, designed for.
Of course. So batteries in industrial, applications such as marine are, are quite different than applications such as cars. Cars tend to operate two or three hours a day. Vessels, marine applications will operate 24/7, 365. So, you raise a very important point here that, if you are the captain, if you are the vessel owner, you can't afford for your crew to sit there for six hours or 40 minutes and wait for your vessel to charge.
There's a few things to talk about there. One of them is you have a different type of battery for a marine vessel than you would do at a car, and that's, so you can do things like fast charging, but fast charging has some challenges on the amount of infrastructure you need to put in place. Making sure you've got enough energy coming into the port setting or the harbour setting. So really what we developed was an application called Pwr Swäp to kind of deal with the three key problems for marine electrification, and those problems are space, weight, cost.
So what Pwr Swäp allows us to do is, instead of you waiting for your vessel to charge or your car to charge, you do a fast swap. So instead of fast charging, you do fast swapping. Now that brings a whole host of benefits because now you can manage your battery in a better way. You can extend for longer, you can have less infrastructure in place, so you don't need to have all the power electronics for a very high charging. And also you can deploy a different kind of business model which we're all familiar with. If you, if you rent a car or something like that, a hire purchase, you can have a pay as you go model, which is a big driver for change because you turn a capital cost of electrification into an operating cost for electrification. So the savings you can generate through decarbonisation will pay for your ability to decarbonise your vessel.
Okay, so you set up a stock of batteries at a port and you charge them. And when a vessel comes in, you take out the exhausted batteries and you put in fresh batteries and off the vessel goes. What size vessels are we talking about? What sort of range are they achieving?
Yeah, so it's a whole range of different classes of vessels. So they range from crew transfer vessels in Singapore, for example, which will be working continuously to take pilots to their vessels and things like that. Cargo vessels, some of the cargo vessels we're doing, say in the Netherlands, will be operating for eight hours continuously in a day to go to station. So the actual duty cycle of the vessel changes, you know, from application to application. Really the size of the vessel, although it impacts the choice and the size of the power swap cartridge, it doesn't prevent it from pursuing the PwrSwäp solution. So, what we've done is we've developed our application to have very small batteries. So small for our size is about the, we package them into something about the size of an American fridge. So that's kind of visually what it looks like.
So how many kilowatt hours do you get into something like that?
So that's a 70 kilowatt hour system. So a small vessel, like a crew transfer vessel, you would have compartments on the side of each side of the catamaran, it is usually twin holes, and you'd put two of these on each side. So you'd have four e-pods/cartridges providing you with 280 kilowatts of power. In larger vessels, so say a barge, you may just have one epod, but that would be, you know, similar sort of size, but just one epod of 300 kilowatts or something like that. We're doing some pusher vessels. So these push barges around. We're doing some pusher vessels in North America, which will need two 20 foot containers of swappable batteries. So you know, you are talking about four and a half to five megawatts of batteries there.
And depending on the duty cycle, you know, that could keep you going for half a day or a day.
Okay. So you're not up to powering containerships yet then?
Not, not with a Pwr Swäp solution. Those kind of blue sea vessels, where you're continuously operating, I mean, they may be at sea for 300 days a year. They're idealized for electrification, but in a slightly different way. So instead of making them a hundred percent electric, what you do is hybridize the systems. So in the first instance, you may install a system, which would look at how do I make the engines more efficient? So if I step back a little bit, really the objective of batteries is to optimize the system that you put it into. So if I go back to your car analogy, when you buy a car, you buy a car based on its fuel efficiency. It may be 55 miles an hour, and that's based on going, uh, yeah, 40 miles per gallon at 55 miles an hour on, on a test track. So what batteries try and do is create that optimization by allowing your engine to run constant speed, constant power, so you get the optimal fuel efficiency.
Fuel Savings - Less Emissions
The battery does all of the heavy lifting. So if you need more power, it uses its reserves of power. If you don't need so much power, you store it in the battery and in that way, you can drive a huge efficiency. So, what do I mean by that? So a small hybrid system with a large vessel that's hybrid, you would typically see emission reductions of between 20 and 30%. You would see fuel cost savings of about 20 to 25%, and you would see operational maintenance cost of, a reduction of about 55%. So it's very big impact for a hybrid system, which is what you would focus on for some of the biggest vessels.
Right. Now, going back to the smaller vessels you were talking about earlier, are they pure electric or do they have a backup diesel engine or something?
Yeah, it varies, I mean, quite often. We're heading towards more and more electrification. Now some vessel classes, safety always comes first. So for tugboats, for example, you know, typically, even if you can operate a hundred percent electric, you would have a small generator on board, just in case you needed to. But you know, what we are seeing is the movement from, diesel to small hybrid, small hybrid to large hybrid, large hybrid to all electric. So in Singapore to, to come back to Singapore again, we're doing an all electric tugboat for a company called Valliance. So that'll be the first of his kind, whereas, you know, also in the Netherlands, we are doing a fully electric pusher vessel, but that has the ability to also call upon different energy sources if it needs to.
So is this new build or is it retrofit?
Those two are new build. Typically as a business we're doing 50% retrofit and 50% new build. One of the, probably the hardest work in batteries, certainly in Europe, probably the world is a ferry that carries 7 million passengers a year. And we did that about six years ago and we converted that from a hundred percent diesel to a hundred percent electric. It operates 23 hours a day and it saves about 1.3 million tons of carbon a year.
Well, I'm going to Ireland next year, sorry, next month. From Holyhead across to Dublin. Do you foresee that route ever being electrified?
Yeah, absolutely. I mean, the UK government is very much committed to meeting its carbon pledges. What we're finding is, part of what I do is an educational role. Many, many different asset classes have been electrified in different parts of the world, but, you know, that haven't necessarily been done in the uk. So the uk, you know, we're pushing hard to hybridise or fully electrify these routes, and the choices will be dependent upon how far the vessel has to go, how many trips it does a day, what the charging capabilities are at port. So, yeah, in a matter of years, I think the majority of these larger routes will be electrified in some shape or form.
Okay, now I can see two constraints. One is the availability of lithium, unless we change battery technology. And of course the other one is the availability of power to charge them, because as we electrify the transport fleet of all sorts, as we move to heat pumps, the demand for electricity is going up and up and up. How do you see the future with those in mind?
Yeah, I mean I've been involved with the same cell manufacturer for over 10 years, so I've seen certain developments over those years. Power density is one of them, the same looking cell can get you 30 to 40% further than it used to 10 years ago, and the price of those batteries have come down very significantly. And that's, you know, a variety of different reasons behind that. Some of it is scale of production, which is sort of a major force for the price changes. Now to speak to your point about sort of lithium, I mean lithium typically makes up about 12% of the components that go into a lithium cell, so there's a whole basket of other metals and components that go into them.
What I would say about it is, that there's a lot of reserves of lithium that are continuously discovered, and there's a lot of different techniques that are being utilised. For example, this company in San Diego that's developed a method of extracting lithium from mud when it mines. As well as there's recycling technology coming out, which we use actually for recycling our cells, which allows us to extract the lithium and all the other components as well at cell manufacturing grade. So there is a bigger demand. Absolutely. But there's also a very big supply of lithium, which is allowing prices to continuously come down as we recycle, et cetera.
On the energy production side, yeah if you choose, pretty much any sector, it is growing. I mean, the solar sector in the UK is, I think it's got a threefold increase projected, over the next eight or so years. In the offshore wind sector in the uk, which is one of the world leaders in offshore wind, we are projecting a fivefold increase in wind farm generation by 2030. In the offshore wind side of things, there's obviously a huge amount of vessels that get involved in the building of that infrastructure and the maintenance of that infrastructure. And batteries have a part to play, obviously in that. So we are, for example, we are doing heavy lift vessels for a client and we're doing CTVs for, uh, for the building of wind farms as well as CTVs for other clients for the maintenance of those wind farms.
Oh, sorry. Crew Transfer Vessel.
Yeah. So these carry, you know, anywhere up to sort of 20 or so people out from shore to the offshore wind farm to service and maintain them. Now batteries have a part to play as the energy mix changes, because obviously we are building a lot more renewables and you know, I'm sure you've, sort of spoken to other people over many years, you end up with some issues. You know, the demand for power may not dovetail into the supply of power. For example, you know, the wind typically blows very strongly at night and yet people are in bed and you don't have the demand for power cuz people work during the day. Batteries have a part to play in that, in that they can peak shave unused or unwanted power during the night, and then deliver that power in a safe and secure way during the day to reduce the peakiness of price fluctuations during the day, and it does that the opposite way round for, for solar charge during the day and release during the night or for different applications.
Electricity Generation Mix
Yes. We're still relying in this country on about 50% gas for our electricity generation in other parts of the world. It's not gas, it's coal. So we have a long, long way to go before renewables are actually doing the major part of the heavy lifting. Do you not see that as a problem, balancing that against the desire to achieve net zero 2050?
Yeah, I mean, it is a challenge. I mean, because you're having to, you know, look at the infrastructure that's been invested in over the last 70 years. And, you know, I think when the grid was put in, no one foresaw that we'd have turn our houses into power generators with solar in the roof, or need to turn our houses into petrol stations equivalently by charging, you know, your car at home. So there's a lot of change that's happening, but the pace of change, the amount of technology that's been developed and is now commercial and is ready for prime time has also sort of, is allowing that transition to take place. So I think we're in an exciting period where we, you know, a lot of these things are now more, at least as cost effective as the carbon equivalent, but there's no silver bullet to any of those things. You know, solar's not the answer, wind's not the answer, the battery's not the answer. But how they work collaboratively together to create part of the mix is really super important. As you pointed out, different countries have different strengths. We're typically not a very big solar nation, but we are a very strong wind nation. And so you couple that with batteries, for example, to even out the supply/demand side of things. And we will be switching off gas-fire power stations gradually over time to ensure that we at home and we at the office have continuation of lights staying on and heating staying on.
We've spoken about your swappable batteries and in particular your marine applications, but you also provide stationary batteries as well. What sort of applications are they for?
Yeah, so the batteries we've designed are very focused on industrial applications. So they're not really designed to be retail products, so for people's houses.
So the focus for land based applications has been, port settings for example. So you asked about the container ships, you know, once we can hybridise those or hybridise components of those, another key part that batteries have to play is when these large vessels come from their movements from China into the uk with containers, for example, when they're at port. Typically, you know, ports will, in a port city, typically 40 to 60% of the pollution that's caused in a port city is caused by that port. You know the fumes that are going up the stacks of those vessels when they're stationary. So what we do is we work with the ports, we work with the fleet owners to effectively provide what we call cold ironing to those vessels when they're ashore. Now what that means, is plugging them into batteries or the grid, to allow, instead of running diesel gen sets or the house load, the air conditioning, things like that, of these vessels, we put them onto electric power.
Now to do that, you either need a huge amount of spare capacity of generation at the port, and that generation as you pointed out, maybe gas. So that's not the cleanest thing to put, you know, you're not gonna decarbonise things overnight if you’re using gas-fired power stations. But batteries have a part to play because you can store the spare energy or the cheaper energy at night and provide capacity to plug that boat into those batteries, and I'm talking, you know, container loads of these batteries, not little pods that we talked about with PwrSwäp.
Zero Emissions in Port
Big banks of these batteries to allow those vessels to be zero emission when they're at port. So that's one application. Trains another application that I think we'll be moving into over time, but we're not actively doing now. And mining and drilling. We do offshore drilling, but there's lots of applications on on-shore drilling as well.
So you could foresee trains operating on batteries so we wouldn't have to put in overhead wires on the remaining unelectrified lines.
Indeed. Indeed. Yeah. As with the Swapable batteries, you know you can swap those batteries out at certain stations to allow you to have that range. The things that people have experienced with their cars, you know, you can think about that in all these applications. PwrSwäp in the marine world, it's about having PwrSwäp stations, so vessels can go from Rotterdam to Hamburg, for example. With trains, again, there's gonna be small stations and large stations that those trains go through, sort of the larger size stations, you'll be able to do fast swapping, you know, the space of a minute, you can take an empty battery out and put a new battery in.
Okay. As quickly as that?
Yeah, Yeah. Yeah.
Of course one of the key questions about this is investment and nobody's going to change from burning, dirty diesel or whatever it is that you burn in, in vessels or even in factories, if it's not cost effective. So how does it stack up from a cost effective point of view?
No, you're absolutely right. I mean, if all you're doing is providing environmental benefits, then you know, you're dealing with very fringe activities that people do this for, for non-profit reasons. For us and for our clients, typically, you can deal with systems that have an immediate payback, a day one payback, so it's very cost effective. With other clients, typically, we don't touch projects unless they have a payback of between three and four years, latest, and these are batteries that have a 10, 11, 12 year life. So you're getting, you know, from a customer's perspective, a fleet owner's perspective, you're getting two or three times your money back with the investment. So they're very cost effective.
Now, they are cost effective for a number of reasons. One of them is, you're saving fuel. If you're doing a high hybrid system, you're saving a lot of fuel. If you're doing an electric system, the cost of electricity typically is 25% of the cost of carbon fuels, so you're saving a lot of fuel costs there.
You are also saving a lot of maintenance. Again, think about your electric car comparison with an existing kind of car, you would have, you know, you got liquids to service. You’ve got lots of moving parts. With an electric car, you don't have liquids. You have motors which last, seemingly forever. So the cost of maintenance will be reduced by at least 50%, when you convert from diesel to electric. And then you have the rising costs of carbon, you know people are being nudged by government in different ways.
Cost of Carbon Emissions
I mean, cost of carbon isn't the same across the world and that's nudging people to realise there's a cost of emitting carbon that you have to pay for, so you have a choice. Do I want to pay for the carbon that I'm emitting, or do I want to invest in infrastructure that will reduce that cost? As I say, some projects have an immediate payback, some have usually no more than three or four years. PwrSwäp is a part technology solution to this and to extend and broaden the range of vessels that can electrify, but it's also part commercial. By turning a capital cost into an operational cost from day one, customers are saving money, so there's really, from a commercial standpoint, there is no reason not to do it. And the added benefit is you as a company are meeting your ESG targets, you are differentiating yourself by demonstrating to your client base, your customer base, that you’re a company that cares about the environment.
Well, Paul that is fascinating. It's a new perspective on the future. Thank you very much for sharing all these ideas with us at the Sustainable Futures Report.
It's a pleasure to be here and thank you very much for the opportunity to speak you today.
Paul Hughes, president and co-founder of Shift Clean Energy. Paul says, batteries are not the solution, wind power is not the solution, solar power is not the solution,. The solution lies with using all of these and other sources of energy together.
The corporate website is https://shift-cleanenergy.com and there’s a YouTube video you should watch:
Robert Llewellyn - Fully Charged Show
When he takes a trip on the world’s largest battery-powered ferry.
Next week we turn to trees. Hank Dearden’s objective is reforestation on a global scale. He tells us how he hopes to achieve that, and how we can help.
Thanks for listening this time. Thanks for being a patron if you are, and of course all the details are at patreon.com/SFR if you're not.
I'm Anthony Day.
That was the Sustainable Futures Report.
Until next time.