Carbon Commentary newsletter. Fortnight ending 3rd August 2025

1, Transatlantic power cable. The UK government recently indicated it would not back a proposed link between Morocco and the south west of England running in the sea around Spain and France. That 3.6 GW link would be about 4,000 km. A similar idea is proposed to take electricity between Canada and northern Europe over the same distance. In this case the five or six hour time difference would help improve the economic attractiveness because high demands in the early evening could be met from sources where prices were at lower levels. A recent analysis looked at the economics of this venture, suggesting that an investment of $20-28 billion could pay for a 6 GW link. (Current interconnectors into the UK, for example, have a capacity of around 10 GW). Would this make financial sense? The numbers look reasonable but not overwhelming, with a rough estimate of profits of $2-4 billion per year. Nevertheless clearly an idea that needs the closest examination. (Thanks to Paul King).

2, Deep geothermal. Very hot water from deep geothermal wells is beginning to creep into forecasts of future sources of electricity. The principal reason is the growing sense that techniques developed in hydrocarbon fracking industries can be employed to drill wells at much lower cost than today. But Houston-based Quaise uses a strikingly different method; it said it had successfully bored 100 metres down into hard basalt using electromagnetic waves that break up the rock. (100 metres is a fraction of the distance that will generally be needed, of course). The fine waste particles are then washed up to the surface. Quaise targets a commercial plant in 2028 bringing hot water to the surface at temperatures equivalent to those used to drive turbines in coal and gas plants. Whether this technique works or not, we going to see inexpensive geothermal energy as a major route to electricity generation.

3, Solar PV in the tropics. Solar panels don’t work as well in high temperatures. So areas of the planet with good irradiance produce less solar power than might be expected. And the panels are also shorter lived because of deterioration caused by heat. Researchers in the US and Saudi Arabia showed that adding a hydroscopic backplate to the panels that absorbs atmospheric water at night which is then evaporated by the heat during the day - thus cooling the panel itself - can markedly improve their efficiency and more than double their useful life. The study suggests an 18% reduction in the cost of electricity is possible in hot and humid countries. (Thanks to Thad Curtz).

4, District heating. The arguments against using hydrogen for the direct heating of homes are overwhelmingly strong. Heat pumps are much better. But there are several schemes for using green hydrogen to provide part of the energy for existing district heating systems. This may make financial sense, particularly in places where imported natural gas is very expensive or the price of the electricity varies substantially, enabling H2 to be made cheaply at some times of day. A dual-fuel boiler will enable the use of hydrogen in part of Tokyo. A similar proposal will see hydrogen used in the Vilnius, Lithuania network where the electrolyser was ordered so that hydrogen can be used from next year.

5, Green steel. Hydrogen is one of two likely routes to low carbon steel, which represents about 8% of global emissions. The other is the use of electricity. The key problem with hydrogen is its impact on the cost of making iron for steel-making. At current levels it might add 50% to the underlying price, depending on the location of the iron works. The Australian company Calix is pushing a variant on iron production that uses electricity rather than the combustion of the hydrogen for much of the heat required. Hydrogen is still needed to strip the oxygen from the ore but much less is used. Calix raised nearly US$30m from an arm of the Australian government for a demonstration plant. This technology looks highly plausible and has the substantial advantage of also being able to operate flexibly and responding to prices in the electricity market. Separately, we saw a symbolic event this week as HBIS, the Chinese steelmaker, announced the export of 10,000 tonnes of ‘green’ steel to Italy claiming a carbon footprint of 50% of the conventional metal. This probably means it was made using a mixture of hydrogen and methane, rather than pure H2. Steel of this type will avoid some of the taxes imposed by the EU’s Carbon Border Adjustment Mechanism.

6, Energy storage using CO2. Energy Dome is an Italian start-up that has designed an 8-24 hour storage system that relies on shifting CO2 between a gas and a liquid. Google bought into the company, saying that the Energy Dome system can be more rapidly implemented than other long duration storage technologies it is assessing. When power is abundant, stored CO2 is compressed into a liquid. The liquid is allowed to expand and drive turbines when electricity is needed. Energy Dome has had a working example of its technology on the Italian grid for 3 years. It claims 85% round trip efficiency and says its storage system can be quickly implemented because it only uses widely available parts. One other significant advantage is that because the Energy Dome approach uses turbines to regenerate electricity it offers what is called ‘inertia’, an important feature that adds stability to grids. (And which is not possessed by batteries, such as those in note 9).

7, Green ammonia. Enthusiasm for big hydrogen investments around the world is fading, largely because many of the initial backers hadn’t properly assessed who would buy the gas. But some sectors seem relatively immune. Ammonia made from green hydrogen is an example. In India, renewables developer Acme won a 75,000 tonne a year contract to supply ammonia to a fertiliser manufacturer. The price offered was approximately $640 a tonne, or little more than half the figure set in a similar Indian auction last year. One source commented that this year’s auction resulted in a price not much higher than the open market grey ammonia price in India of about $515/tonne. In other ventures, Polish-Indian company JKSH said it would develop an ammonia plant in Andhra Pradesh and the EIB committed to back Atome’s ammonia project in Paraguay.

8, Growth in solar vs other sources of electricity. Goldman Sachs published a note showing that the growth rate of solar energy has far exceeded other sources of electricity in their early stages of development. After reaching an output of 100 TWh in 2014 (about 0.5% of global generation), solar provided about 8% of the world’s needs last year, or around 2,100 TWh. This is an impressive surge but only marginally faster than the absolute growth in gas power, which increased from about 5,200 TWh to around 6,800 TWh in the same period. Rapid solar growth will continue but some signs of deceleration may be apparent; solar power installations in Europe will probably fall slightly this year, some forecasts show slowing in China after the extraordinary growth of early 2025 and recent legislative changes in the US will eventually pare back PV.

9, Iron-air batteries. Dutch start-up Ore Energy said it had installed the world’s first operational battery that uses iron, water and air to store electricity. When discharging, the iron turns to iron oxide (‘rust’). When being charged, the rust reverts to metallic iron. This is not a new approach to electricity storage but few companies have pursued the technology because of the weight of the batteries, their relatively slow responsiveness and lower round-trip efficiency. However the batteries can discharge over periods of up to 4 days, a significant improvement over the four hours that conventional LFP units might provide. And costs might be as low as $20 a kWh, far better than the $60 or so that Chinese LFP batteries are said to be trading at today. (The $20 figure comes from Form Energy, the US company that has been considered the world leader in iron-air technologies).

10, Durability of T-shirts. By 2030 the world will have to dispose of around a hundred million tonnes of clothing a year. More durable clothes reduce this? A study looked at whether the retail price is a good predictor of the useful life of clothes by subjecting 47 T-shirts to 50 cycles of washing and drying. Perhaps unsurprisingly, the analysis showed no correlation between the price of a T-shirt and its durability. The most expensive, sold for an eye-watering £395 ($520), came 28^th on the list. What does matter is whether the cotton garment contains plastics to strengthen it (but unfortunately make it more difficult to recycle) and how heavy it is (and therefore how much material the T-shirt contains). This demonstrates the underlying challenge for clothing sustainability: a durable item made with current materials is likely to be less recyclable and use far more textiles.