You can’t grow GDP and decarbonise at the same time. It’s one of the key reasons very little change happens and we continue on the same path towards environmental ruin.
As a country, if you want to decarbonise and halt climate change, you likely need to reduce your current energy consumption by ~ 10-20x (assuming you use a lot of fossil derived energy). Assuming you suddenly do that, you’ll likely plunge your economy back into the dark ages towards starvation and poverty. There are no rich low-oil countries. If the USA, today consuming ~16% of the world’s total primary energy, decided to become carbon-neutral overnight, they would only be able to do so by removing the 80% of their 100 quadrillion BTUs consumed in 2022 derived from fossil sources – plunging the country back to energy consumption levels akin to 1935, where a population of 125m people still used horses to plough fields.
This describes the core issue with the “we must reduce energy consumption to fight climate change” argument. This proposed deceleration necessitates the slow down or reversal of longer life expectancy, productive farming, fast travel, industry expansion, increased living standards and a whole host of other benefits that fossil fuels have given us. This low-energy future isn’t just demoralising, it’s also just not the way things work in the real world. The technological innovation that is required here is fundamentally driven by profit. Capitalism doesn’t work by paying more to reduce the use of something. To continue to innovate, evolve, and achieve the dreams of the future we have, we actually need to dramatically increase our energy consumption.
The problem is that if we did that today, with the majority of primary energy sources being heavily carbon intensive, we’ll accelerate even faster to a burning world. Here is the crux of the problem. You can’t increase energy consumption to grow GDP and decarbonise at the same time with current solutions. We need a solution that is both better for the planet and enables GDP to continually rise whilst energy consumption dramatically increases. For that reason, other than just being clean and renewable, the solution must also be dirt-cheap to latch onto the insatiable appetite of capitalism and fuel further innovation, cost-decrease, and ubiquity over time.
Rivan Industries is going to kick-start this solution with synthetic fuels.
Fossil fuels have been the greatest thing that has ever happened to humanity. However, we’ve accrued a debt for the growth we’ve experienced in the form of excess CO2 in the sky. Since the industrial revolution we’ve emitted about 2 trillion tonnes of CO2 carbon dioxide into the atmosphere, heavily front-loaded from the 1950’s onwards. Roughly 50% was quickly captured by earth’s natural carbon sinks like oceans, wetlands, forests and soil, with the remaining excess that stuck around has pushing CO2 levels up from 275ppm in 1800 to 420ppm today. This leaves us with roughly 1 teraton’s of CO2 that we need to pull back down from the sky whilst somehow still enjoying the benefits that created that excess.
What are we at?
The world emits about 50GT of CO2 / year. The majority of which is from energy-use roughly split between Industry, Residential and Transport:
Despite the net-excess in the atmosphere increasing by roughly 30GT each year we continue down the same path, we are seeing an improvement. Electrification of the demand-side (E.g end consumer use in the form of electric vehicles, heating, air conditioning etc) is happening at an incredible pace. EV’s and heat pumps are being deployed considerably faster than forecast and are incentivised, funded and proven. This will slowly wipe out about 1/2th of the emissions above via residential and transport. Another ¼ will also likely be wiped out with better agricultural methods and the decarbonisation of the grid with more efficient batteries and solar.
If we assume both of those continue, we’re largely left with “Heavy Industry”, namely Aviation, (some) Shipping, Manufacturing, Steel, Cement, and Chemicals – and maybe some rockets. These hard-to-abate industries are tricky to electrify away because of their immense energy requirements and fundamental necessity for feedstocks. The plastics, paints, glues, cosmetics and myriad of other products we use everyday can’t be hooked up to a battery – they need physical molecules to be made. These industries are roughly ~ 12GT/year worth of CO2 emissions without clear low-carbon alternatives that work at scale.
How are we solving this?
We’re limited in many ways to reduce this net-excess of carbon. Of the potential alternatives being discussed, centred around carbon-capture, hydrogen, electrical, or electrochemical, most are nascent in development, suffer from high-development costs, are problematic at mega-scale, or have little market development. All of this leads to very long maturity timeframes, causing more CO2 to be emitted into the atmosphere, not to mention the untold trillions of dollars that it’ll cost to upgrade current machinery to be compatible with new technologies. Every month we delay, we kick up another 2.5Gt of excess CO2 into the sky, equivalent to an entire year of the Shipping and Aviation industry emissions combined. To operate at the speed and scale we require, whilst also being economically beneficial to incumbents, we require a level of certainty that isn’t yet clear. Therefore, unless we develop a fast, better and cheaper solution, things will continue to move slowly.
Assuming clean electricity is to play a pivotal role in some of the solutions to reduce heavy industry emissions, and we’re able to accelerate some of the technology maturity curve, a key issue we hit is the transmission bottleneck. There is currently >200GW of energy in the queue, some of which has been given time frames of between 10-15 years to connect their supply. This means 100% of UK electrical demand in 2022 (320.7 TWh) is sitting hostage in the queue wasting away. To service that demand and get those projects live, the UK would have to build something like 5x more transmission lines in the next 8-10 years, than it has done since 1980. I personally listened to the Scottish Power CEO describe the grid as “a massive mess” in November October 2023. Better get some more copper, aluminium and cables!
Even if we snapped our fingers and we never again emitted excess CO2 into the atmosphere, this still doesn’t address the current 1Tt excess of CO2 we’ve built up over the last 150 years that we need to pull out of the sky to avoid catastrophe. What are we doing about that?
Carbon Capture
Carbon capture does what it says on the tin – capturing the excess CO2 in the air (in various ways) and aims to get it back underground. Today we capture roughly 50m tonnes / year. Against the backdrop of 1Tt tonnes we need to pull down to level things out, we’re ~3 orders of magnitude out. Whilst it’s not impossible to catch-up, we’re swimming against the tide as current mechanisms for carbon capture suffer from high deployment costs (Climeworks Orca site cost ~ $10m, and captures 4000 tonnes / year), lack of a developed market, and slow iteration cycles. This is hardly becoming the virtuous cycle of increased usage > increased competition > reduced costs > and greater proliferation we need to get things done. The key mechanism that’s missing here to reduce this excess of CO2 in the atmosphere is the cost of capture and what we do once we have it! If we are to capture carbon at a megascale, we need to make it dirt cheap to capture, and then use that captured CO2 to create a gross end-product that is more valuable than the sum of its parts that’s back-compatible with current technology to kick-start the innovation cycle.
This is the mechanism Rivan Industries is going to develop with synthetic fuels, powered by even cheaper solar.
Solar
Solar has been steadily decreasing in cost for 50 years. I recommend “how solar energy became cheap” to take you through the stages. For today, we’ll focus on the last 10 years where solar costs have dropped by 95%. This illustrates how, counter to carbon-capture, fast iteration cycles, increased productivity and increased competition overtime leads to mass deployment scale and low costs for end-consumers.
This dramatic cost decrease can be understood through Wrights Law. Wrights Law states that for every cumulative doubling of units produced, costs will fall by a constant percentage. This drop is called the Learning-rate, which is essentially a wrapper term around the impact of better manufacturing capability, cheaper cost of materials, more efficient labour installation etc, which pulls down costs overtime.
A comprehensive solar learning-rate breakdown is Ramez Naam’s great 2020 article, solar’s future is insanely cheap, describing a constant cost decrease for solar between 30-40% per doubling of cumulative deployment. If we continue deploying at roughly the forecasted figures, we’re looking at around a 1% cost decrease per month. This suggests within the next decade we’ll be heading towards 1p/kWh. Unbelievable!
How long can this continue? Since the pricing is mostly correlated to demand, we can fairly safely assume the demand for solar will continue based on the continued cost decreases opening up ever larger markets. That said, the real lynchpin for solar’s slide down the cost curve is in its inherent modularity and simplicity. For other technologies (like the Ford model T, genome sequencing or semiconductors), the cost decrease per doubling of scale is around 10-20%. Solar’s almost double that because of its ability to churn through iteration cycles faster and cheaper than almost any other technology. Panels have no moving parts and their main material is silicon, making up ~30% of earth’s crust and the second most abundant element on earth – just pipped by Oxygen. Based on the increased demand and improvement through iteration, it’s likely solar’s cost decrease accelerates from here on out.
Solar’s simplicity and speed of iteration is also one of the key reasons nuclear energy will never overtake solar total gross energy production. Whilst nuclear deployment will increase, the cost per iteration cycle is simply too large to ever pull down the cost quick enough to compete on a per £/kWh vs solar. In the decade it may take to deploy a nuclear plant, solar cost will decrease >70% with hundreds of small interaction cycles continuously accelerating that decrease. Although, might want to keep the pace with Nuclear north of Manchester, UK.
Based on where we are now, solar has reached a pricing threshold that opens up entirely new use-cases that were previously cost prohibitive based on their extreme energy requirements. Mass desalination, space exploration, and climate engineering will all benefit and accelerate from the abundance of solar energy. Another key area that will benefit and scale with decreasing solar costs, and one that Rivan Industries is bettering on, is the mass-scale production of synthetic fuels.
Rivan Industries will use extremely cheap solar to pull CO2 from the sky, generate green hydrogen, and combine them both to form valuable, clean, abundant synthetic fuels, thus creating a process to continually decrease the cost of carbon capture whilst concurrently providing a pathway to fulfil the clean energy requirements of the future.
How it works
The building blocks of synthetic fuels are carbon dioxide and hydrogen. With these, you can fairly easily create Methane (Natural gas), Ethanol, Methanol, Kerosene and a host of others. However, the process of obtaining clean CO2 and H2 is pretty energy intensive.
To produce clean and cheap hydrogen, you either need a hyper efficient machine or extremely cheap energy supply (or both) to split 1 mole of water into H2 and O2:
2H2O(l) + 237.2kJ → 2H2(g) + O2(g)
For carbon dioxide, there are 2 main steps. Firstly, capturing carbon dioxide from the atmosphere using some sort of sorbent (like Calcium hydroxide), isn’t very energy intensive and throws off some heat:
Ca(OH)2(s) + CO2(g) → CaCO3(s) +H2O (l) + (−113kJ/mol)
The second step, to split the calcium carbonate to give us the CO2, is far more energy intensive and requires extremely high temperatures to regenerate the sorbent to give up the captured CO2:
CaCO3(s) + 178kJ/mol→ CaO (s) + CO2(g)
These processes have previously been prohibitively expensive, as near unlimited supplies of cheap fossil gas and oil saturated created the market price. However, that’s now set to change as we hook up hydrogen production and carbon-capture to ever-cheaper solar and challenge the dominance of their fossil fuel alternatives.
Historically, the machinery and infrastructure to produce green hydrogen and capture carbon dioxide has focused on high-efficiency based on the high cost of energy to run them. If efficiency of conversion wasn’t >90%, there wouldn’t be margin to sell the end-products for a profit based on the costs to produce them.
At its core, high efficiency means high costs. Solid Oxide hydrogen electrolysis can achieve near 99% efficiency using yttria-stabilised zirconia electrodes, but will set you back ~$2m/MW. You can capture carbon dioxide with Amine-based absorbents or zeolites with >90% efficiency, but at a cost of ~$500/tonne. These processes at the vanguard of innovation are ever increasing in efficiency, but equally accompanied with ever larger cost bases.
Because of this, these complex systems rarely scale significantly past FOAK (first of a kind) plants. Huge capex on unproven techniques or business models isn’t exactly the easiest sell to a bank. With such high cost of deployment, mass markets either aren’t created or penetrated, and as such these technologies struggle to cross the chasm and change the status quo.
Most of the cost-base of a complex system is therefore wrapped up in the infrastructure (e.g the cost of the machinery, the materials, the buildings etc) vs the opex (e.g the running costs and energy required to run these systems or processes). Since the capex is high and the opex is low, these complex systems are fairly insulated from energy costs changing. For example, if you wired up a state-of-the-art electrolyser to intermittent solar, the cost per unit of H2 generated wouldn’t really change all that much vs more expensive electricity straight from the grid, as most of the cost base has already been sunk on the equipment. The opposite however, extremely low capex and high opex, is extremely sensitive to the cost of energy changing.
The mechanics of Rivan Industries
Rivan Industries will take the opposite stance to traditional technology deployment, by focusing on extremely low-cost, low-efficiency machines to benefit from the sliding solar input cost to capture gigatonnes of carbon dioxide and produce valuable synthetic fuel, creating a chemical battery that can store energy through space and time.
The capex of one of our machines is designed to benefit from the super-linear cost relationship with efficiency. As an example, let’s assume some of the highly efficient techniques to capture carbon or generate hydrogen mentioned earlier are near 100%, but also come at a cost of £100. If we were to drop that efficiency down to 90%, the cost to produce the new lower-efficiency machine drops down towards £70. 10% efficiency drop, 30% cost drop. If we continue to drop efficiency down towards 50%, the equivalent cost decrease will slow-down in absolute rate but head towards ~ £20. Therefore, meaning a machine that is 2 x less efficiency vs the state of the art, is ⅕ of the price. Simply, capex decreases at a faster rate than the equivalent efficiency decrease, thus meaning that achieving higher levels of efficiency requires disproportionately higher costs. No wonder those high efficiency machines haven’t scaled very far!
Similarly, the flip side of low-capex is high-opex based on the lower efficiency. Since our belief is that the learning-rate of solar is going to continue to accelerate down the cost-curve, our machines will be well positioned to benefit from lower energy costs overtime. The faster the solar cost decreases, the lower the opex, the more cash flow is freed up from each machine to reinvest in further deployment, and so on and so forth. Deployment begets deployment, with the added push from ever decreasing opex.
The Rivan RNG Generator
Our first product, The Rivan RNG (renewable natural gas) generator is split into 3 core modules. Direct hydrogen electrolysis via an alkaline electrolyser to produce green hydrogen, a direct-air-capture mechanism to capture carbon dioxide via calcium oxide looping, and CH4 synthesis through a sabatier reactor. It looks like the below, just less shiny.
Our electrolyser is split down to its core elements. No rare-earth metals, no complex electrode manufacturing techniques, and no high temperatures or pressure. We instead utilise simple electrodes and a common material membrane to harvest 99% pure hydrogen.
Our DAC (direct-air-capture) module follows the same path. No zeolites in sight. We use the age-old limestone cycle to capture tonnes of CO2 from the sky. Big surface area and air flow required! Being thermodynamically unfavourable is a benefit with energy abundance.
Our Sabatier reactor is hardly changed from the process pioneered by Sabatier and Senderens in 1897. We inject the aforementioned CO2 and H2 into our reactor to produce 99% pure CH4, ready for all manner of useful jobs across the globe. We’re focused on production of CH4 because of its ubiquity across heavy industry, but will expand across other fuels as deployment expands.
Each Rivan RNG Generator connects to a utility scale solar array, with the majority of power being diverted to split water into hydrogen.
The business model
If we are to remove 12Gt of CO2 being emitted into the atmosphere each year by heavy industry, we’re going to need a lot of RNG generators, and a lot of solar panels.
Distribution
We’re going to utilise the current pipeline infrastructure around Europe to distribute our carbon-neutral CH4. Despite some of the regulatory process required for this, it offers almost unlimited scale of distribution. No expensive additional pipelines required.
If pipeline entry isn’t available in certain areas, we will compress our gas and distribute to customers in-situ or into other established GEU (Grid entry units).
Synthetic fuels are also back-compatible with the current fossil fleet requiring no modifications. Imagine a large scale industrial plant that could feasibly turn their entire production carbon-neutral overnight, with no capex (and once pricing parity is met, no opex either) requirements?
Deployment
For us to get anywhere near the scale needed to capture enough CO2, we’re going to have to deploy solar at an unprecedented rate. There are 2 mechanisms that will allow us to do this. Firstly, we aren’t constrained by the electrical grid capacity, which we already know is a massive issue that causes delays. We deliberately target arid, unproductive land that farmers don’t have many other options to generate income from and traditional solar developers aren’t interested in.
Secondly, since our machines consume in-situ DC power, we can remove any expensive inversion equipment required for traditional solar. Cheaper panels, cheaper racking, cheaper cabling.
Where the panels are situated is ultimately down to where the sun is. The utility factor (the ratio of how much of energy is produced against total possible output during a specific period of time) in some areas of the UK is ~ 18%, whereas areas of Spain and France are nearer to 25%. At the limit, this equates to millions of extra cubic metres of CH4 generated from the same capex per machine. As such, we’ll continually deploy our machines in sunnier areas to maximise the cashflow cycles to fuel further deployment.
Customers
Our main focus is to own and operate our machines and distribute directly to the gas grid. However, we will also explore selling and leasing our machines directly to other operators. Overtime, synthetic fuel production via a Rivan RNG generator will offer current solar developers, and current oil & gas producers, a clean, scalable, long-term revenue stream compared to their current modes of production or operation. This approach will also accelerate our progress towards total CO2 captured.
Financial
Our machines are designed for extremely quick amortisation and cashflow cycles. A Rivan RNG generator will start to produce profit from month 1 of operation. An entire array of Rivan RNG generators will be amortised in ~ 2-3 years, freeing up additional capital to reinvest into further deployment. To put this in perspective, a traditional LNG plant may have a payback period of >20 years.
After financing our machines, the only marginal cost is then the solar power. Since we expect solar to drop to almost nothing, it will soon be cheaper to synthesise fuels from the air and water than from the ground, going head to head with traditional big Oil & Gas.
Impact
The Iron and Steel industries in the UK consumed 5TWh of Natural Gas in 2023. Assuming a ~1.8KG of carbon dioxide is emitted per m^3 of Natural Gas used, this equates to just shy of 1,000,000 tonnes of CO2. By switching to supply from Rivan Industries, we could remove the entirety of the CO2 emissions produced from those industries in the UK with just over 5000 machines, requiring roughly an area about half of what James Dyson currently owns in the UK.
The Rivan RNG generators, and synthetic fuel production in general, will also create other second-order impact of energy security (no more Russian leverage) via local production, and increased productivity and biodiversity of previously barren land.
Conclusion
Our goal is to make life on earth sustainable, which requires the removal of 12GT of CO2 being emitted into the atmosphere each year by heavy industry. The only way we believe that can happen is via the mass production of synthetic fuels hooked up to cheap solar.
Our core assumptions that underpin that belief:
- ~30% of emissions are almost impossible to remove or reduce with current constraints. The longer we wait, the worse this problem becomes.
- To capture carbon dioxide at the gigatonne scale required we must do so in a way that is both extremely cheap, and creates a valuable by-product
- To deploy at the mega-scale required, low-capex simple machines will enable fast cashflow cycles to aid further deployment, paired with high-opex that will continually decrease as solar advances
Our plan in a nutshell:
- Manufacture and deploy the Rivan RNG generator at TW scale to slow down and reverse the CO2 excess in our atmosphere
- Use that cashflow to continually reduce the marginal cost of fuel production with ever greater deployment
- Create the cheapest, cleanest fuel on earth to force Oil & Gas into action
Where are we today?
- We have a operating pilot plant proving our technology at ever larger scales
- We are funded to kick-start the manufacturing of our RNG generator
- We have a ridiculous amount of work to do
Come and work with us to built the machines that create a sustainable future! We’re on the lookout for a solar planning lead, electrolyser engineer, reactor engineer, DAC engineer and mechanical engineer! See our open roles here.
rivan.com 