Reducing emissions over the next decades is currently fashionable and everyone talks about it. Despite that, electric power can never be the sole remedy if we want to reach our set climate goals.
Not just since Fridays for Future, climate change is on everyone’s lips. By 2050, our government is aiming at net-zero emissions. Given Germany reduced its CO2-emissions per capita by only 13% within the last ten years, that intent is widely regarded as ambitious. One not so recent technology may receive new momentum in all of this and turn out to be a key contributor to meeting our aspiring goals.
Power-to-X – a conversion of electric power
Power to X, P2X or PtX for short, describes the conversion of electric power into another form of energy, kerosine for your long-distance flight for instance, in order to make it readily storable, portable, and consumable for various industries. You are likely familiar with Tesla and other car manufacturers working on electric cars to replace the omnipresent fossil-fuel-based automobiles. So what is the point of converting power to gas? Why can’t we just charge a huge battery to lift the plane into the air? A battery for long-distance travel would not simply be too heavy, it would also deter airlines that would be put off by the charging times in between journeys. Hydrogen, however, can be stored much more compactly and quickly and, as an added benefit, does not leave any harmful residue when consumed. Why then have we not yet shifted to hydrogen completely?
A binding prerequisite for “green hydrogen” is the use of equally green inputs in its production (as opposed to those won from fossil fuels), which necessitates massive amounts of renewable energy. It should come as no surprise that the expansion of renewable energy in Germany has come to a halt. In fact, in the long run, the mineral oil industry sees no possibility to cover demand merely nationally. “At this point, green energy accounts for a single-digit percentage of our energy consumption. […] The German industry, in particular, will need tremendous amounts of renewables, which, in light of the far better conditions [for the generation of renewable power] abroad, may only be achieved practically and feasibly by long-distance imports of green molecules [i.e., molecules created through the use of renewable electric energy],” says one spokesperson of the Power to X Alliance.
Thus, the easy solution to efficiency losses on the home market is shifting production to other countries or continents, including developing countries; hydrogen is portable and renewable energy is far more accessible. However, in reality, it is a bit more complex, entailing ulterior questions: To produce liquid fuels, for example, we need to add large quantities of water; another resource that can be rather scarce and stressed in some of the poorer nations in the south.
Power-to-X as the best alternative
Even if we could hypothetically overcome geopolitical issues, for the lack of awareness among the general public, P2X has not yet received the push that it needs to flourish. A secretariat by the BMU for international collaboration on the topic has been slow in coming, says the organization that has been entrusted with the setup, while not being conducive to the extent that Federal Minister of the Environment Svenja Schulze’s wording in her speech at the “Power-to-X conference” suggests, say spokespeople of the industry. Ultimately, though, the research toward market maturity and scale, above all, requires time – experts talk of decades, at least.
As such, to reach our climate goals, Power-to-X is one crucial technology in the mix that we need to pursue with full force today to benefit from it tomorrow and reach climate goals by 2050. People continue to expect economic growth as a driver for the ongoing rise of living standards. We live in a globalized society, in which people and products will keep circling the earth. Simultaneously, we gradually acknowledge the consequences of relying too heavily on fossil fuels. For those industries in which the electrification of inputs has so far either been inefficient or technologically impossible, Power to X plays a decisive role in feasibly reaching their targets and remaining competitive on the global markets. These industries account for the bulk of our energy consumption. P2X makes electric power compatible and applicable. With a lack of better alternatives, it becomes a key technology of the future that can harmonize the opposing forces; we can continue to profit from growing economically while keeping the planet healthy. The experts and politicians know it; what’s missing is greater awareness within the general public to drive support and funding.
In-depth analysis by Clevis Research
Over the years, Clevis Research has acquired industry expertise within the energy market. In our latest project, we supported our partner, a European Chamber of Commerce, to gain deeper insights into market developments in the Power to X field. Clevis Research has developed an in-depth understanding of market potentials by means of primary and secondary research and were able to learn a lot on the situation in the renewable energy sector, which we would like to share in this article with all interested parties.
We hope to actively contribute in raising awareness on this publicly-relevant market and thereby to a more sustainable future. By opening up key insights with regard to market entry strategies, we are proud to say that our efforts will be utilized to find ways for practical, solution-oriented collaborations among international corporations and institutions and to strengthen the market as a whole.
by Daniel Wiehoff
Clevis Research is a market research and advisory boutique. We support clients to pursue global business development opportunities and spark new growth.
David Aberspach, Head of Sales / Team Lead Market & Strategy