Tag Archives: Energy

Curious case of Lithium-ion battery price

By Aditya Chhatre

The beginning of this millennium marked the shift towards institutionalizing energy transition towards renewable energy resources. This transition has largely manifested into the mainstreaming of solar photovoltaics and wind energy in the installed generation capacity. However, the transition would be incomplete without reliable energy storage systems. Within the on-going debate of the best energy storage technology, there are a dozen possible technology options. To achieve the short-term deadlines of 2030, it is important to rely on the existing matured energy storage technology – Lithium-ion (Li-ion) battery. (Read our past article to know the journey of Li-ion batteries). The investments and innovations have got the prices rolling down since 2010. However, since the second half of 2021 the prices are in a slack due to raw material shortages.

In the debate of batteries demand and supply, interestingly this time it is the supply which has caused the imbalance. Portable electronics industry in 1990s established the extensive use Li-ion batteries and now the electric vehicles (EV) market has yet again strengthened the acceptability of lithium-ion batteries since 2010. At present, more than 30 countries have announced ban on manufacturing of internal combustion engine (ICE) vehicles starting from 2029 and with such phase out policies of ICE vehicles, vehicle demands are foreseen to be tilted over to EVs. An additional application of batteries is the large scale battery containers used for grid stability and applications such as energy arbitrage. This has added on to the demand of Li-batteries. In the terms of cell capacity, there are plans to achieve over 3TWh production facilities by 2030 which stands at around 500GWh in 2020. This colossal future demand has induced stress in the supply chains of the raw materials for Li-ion batteries. It is a wakeup call for the battery industry indicating that the prices may not decrease every year henceforth and the mining of the required metals shall be crucial for energy transition.

The uncertainty of supply chains usually is hard to forecast but it is important to categorize these situations. These market dynamics occur in phases and categorizing it provides a better understanding of the scenario.

Effects of supply chain on battery prices

The electrochemical nature of Li-ion batteries and its improvements over decades have resulted in variety of Li-ion battery chemistries. The prices of these Li-ion battery types in such a dynamic market is often hard to predict. A recent study from McKinsey discussed the relation between the raw material shortages and its effect to the market in the form of a flow chart which can also be extended to Li-ion battery market as illustrated in Figure 1.

Fig 1. Flow chart of prices and raw materials

As seen in the flow chart, a new application leads to increase in the raw materials demand. If the supply chains are intact then the technology transition is smooth. On the other hand, if raw materials are not available, a process to enhance the supply chains would be necessary. Now, considering the nature of EVs, the driving range is usually the most important factor for comparison of battery types. This factor is governed by the energy density of the battery, which indicate the energy storage capacity. Batteries consist of mainly 3 components – cathode, anode and the electrolyte. Innovations and research usually have been focused on the cathode level. During the early years of the last decade, the cathode with Nickel-cobalt-aluminium oxide (NCA) and Nickel-manganese-cobalt oxide (NMC) with the metal ratio of 1:1:1 was commonly used. NCA and NMC batteries have an energy density around 200-260 Wh/kg and 250-300 Wh/kg respectively. Amongst them as NCA was a cheaper technology, it had a larger contribution than NMC.

Cobalt is a major material in both of the battery technologies. As of 2020 more than 80% of cobalt is mined in Congo. Depending on just one country for such an important battery metal has strained the supply chains for cobalt for the last 5 years. Moreover, the political instability of the country makes raw material availability prone to unforeseen situations. Due to the high demands along with these constraints, in the month of March 2018 the price of cobalt peaked to 93,750 USD/ton. This shortage of cobalt supply increased the overall NCA and NMC battery prices.

In such situations of raw material storage, concerns increase due to the unsure supply chain modifications. The prices start to soar which can cause instability in the market. These high prices are usually short lived if supply chains are successful to adapt to the new demand. However, an indication of change of market dynamics is when the prices continue to be high. This unstable situation usually follows the cycle in three phases as illustrated in the flow chart.

Phase 1: Reduce critical materials

Phase 1 of the scenario involves efforts put in to reduce the contribution of the vulnerable materials. The tension in cobalt supplies led to high nickel content battery technologies to gain market share post 2018. Nickel which was extensively used in steel production facilities was readily available and this got the high nickel batteries to be economical. The NMC batteries have also seen a technological shift towards less cobalt content from 1:1:1 metal ratio to 8:1:1. NMC Li-ion battery market share increased and as of 2020 stands at more than 60% of the Li-ion industry. But nickel being just 3 times more available than cobalt, the supply chains were strained to match the increased demands. These effects could be seen in the prices of nickel since the mid of 2021. The cost of nickel in Jan 2022 stands at 22,570 USD/ton which is the highest in last 10 years. The mining industry is currently in search of more nickel sources and also building refining plants to improve its supply chain. This has forced the Li-ion market to move to the phase 2.

Phase 2: Find trade-offs

The second phase starts with the change of technology away from the rare materials. The shortage of NMC batteries brought in the Lithium-iron-phosphate (LFP) batteries back in action. LFP batteries co-existed in the battery market. Even though LFP batteries were cheaper than NMC batteries, due to its lower energy density (150-200 Wh/kg) they were not used greatly in the EV market. Most importantly, to avoid supply shortages the markets started to rely on LFP batteries which consists iron and phosphorous which are comparatively abundant materials. Many automobile players such as Tesla declare in October 2021 to shift from NMC technology to use of LFP batteries in their standard models. Another application where energy density is not critical is the stationary storage grid applications and LFP batteries are quite dependable for such an application as well. Fig 2. Depicts the expected market share of these prevalent Li-ion batteries.

Fig 2. NMC, LFP, NCA Li-ion batteries production capacity

Even though, it seems that the LFP batteries have finally found its place, there are some concerns which should not be overlooked. Most of the phosphorous refining facilities are energy intensive and these refineries are highly concentrated in China. Knowing the electricity mix in China, the phosphorous refining could be an issue with high carbon intensive production. Additionally, the dwelling concerns of vinylene carbonate availability (an additive to the electrolyte) possesses risks for LFP batteries. If adequate measures are not taken in due time, these factors can cause LFP batteries prices to increase too and push the Li-battery market scenario in phase 3.

Phase 3: Alternate technologies

This is the phase wherein all sub technologies have been exhausted. A new technology shall be introduced to fulfil the application. In the case of Li-ion batteries, this would mean that new batteries such as sodium ion, solid state, silicon or air-based battery technologies shall evolve and come into effect. This shall start the loop of the phases again although with different raw materials.

Conclusion and path ahead

The erratic nature of Li-ion material availabilities is ought to affect the prices of batteries in the near future. The prices of NMC Li-ion batteries in 2022 are expected to remain high and be governed by the raw material availability. The focus of the investments has always been in supporting downstream activities such as EVs and their manufacturing facilities. Now, it is the need for the investors and OEMs, to divert investments upstream towards mining and refining activities.  

The supply chain has also suffered labour shortages due to COVID in western Australia. As Australia produces nearly half of the global lithium, COVID has delayed the supply chains improvement activities by 6 months. Also, as China holds the patents for LFP batteries, 95% of LFP batteries manufacturing has been confined in China and in the short term the prices of LFP batteries depends on China and its policies. However, in 2022, the patents held by China on LFP batteries expire. This allows more manufacturers from other countries to invest and contribute to the economy of scale of LFP batteries. These could lead to possible reduction of LFP battery prices from 2023 onwards.

These factors of technology, prices and raw materials, interact in a cyclic flow chart which test the technologies and ramp up the supply chains.

(Vidushi Dembi contributed in editing this article)

Why Bitcoin is energy intensive

By Aditya Chhatre

Humans have specific beliefs and subjective ideologies. Historically, there are very few things which have unanimously wired large number of humans in the world. Yuval Noah Harari explains in his book “Sapiens”, that monetary, imperial and religious orders are the three constructions that have successfully unified humankind. The definition of a financial systems has evolved from brass, silver or gold coins to the newest form of notes with national leaders and symbols printed on it. Money in the form of gold, notes, coins or whichever prevalent form, is a platform to value an object or a service. It is only valued because humans as a community accept commodities in the form of ‘money’ and believe the exchanged commodity shall be valued. With cryptocurrencies around the corner for a decade, do we have another structural shift in its form?

Our lives revolve around digital systems and finance systems are not far off. Governments have implemented policies to make financial systems digital and cashless. This has raised speculations on hard cash gradually might decelerate and go extinct. The centralized financial system has an alternative now to be decentralized in the form of cryptocurrencies. The first cryptocurrency was Bitcoin developed in 2008-09 by Satoshi Nakamoto. Within the last decade many such cryptocurrencies were created and the concept of decentralized financial system has been put in use. Although, in recent times, as bitcoin got popular, there are discussions that the working of these cryptocurrencies is energy intensive and with more users it will make things worse. It is essential to unfold this big debate to understand the energy consumptions of cryptocurrencies and figure out a way to find the electricity consumption of bitcoin.

Understanding bitcoin mining in 4 setups

The energy consumption of any cryptocurrency lies in the way a cryptocurrency works with its algorithm. This algorithm which runs in a processor, consumes energy for creating the blockchain. Cryptocurrencies(crypto) have mainly 2 components – its algorithm which creates a block for the blockchain. It is important to understand the structural concept behind creating a blockchain. In these decentralized systems users have individual ledgers and all transactions for that specific cryptocurrency are updated in every user’s ledger. Each transaction is converted in a block after its verification. This verification and creation of a block is the role of a miner and this is popularly known as mining. In return miners are rewarded with transaction fees in the form of crypto coins.

4 steps of bitcoin mining can be classified as:

  1. Transaction of the payment
  2. Digital signature
  3. Miner verifies and creates a block
  4. Adding the block to the Blockchain
Figure 1. Blockchain and bitcoin mining

Algorithms and its energy consumption

Algorithms for creating the blockchain are termed as consensus mechanisms. The most prominent algorithm for mining the bitcoin is ‘proof-of-work’ which is also the algorithm used by bitcoin. This algorithm is a method where every miner gets the transaction and starts with a premutation to find the number to achieve a specific output. Large number of processors are required to carry out these combinations. The one who gets it first creates the blocks and earns coins. This algorithm is energy intensive because it is designed such that all miners need to run their processors simultaneously for creating a block and only one of them is incentivized with coins. This is more of a processing competition which accounts for a lot of energy waste. Recent debates about bitcoin being energy intensive is mainly because of this nature of its algorithm.

There are many such consensus algorithms which are gaining some space within cryptocurrencies. An alternative approach which has been popular to counter the energy intensive approach of bitcoin is ‘proof-of-stake’. In this method every miner has to bid currencies at the beginning to take part. The one bidding higher has better chances to get the opportunity to create the block and earn rewards. The main difference between these two types is the one following proof-of-stake algorithm only needs a single processor to work which reduces the electricity required. Comparing based on the electricity requirements, ‘proof-of-stake’ clearly consumes way too less energy than ‘proof-of-work’ mainly because of the structure of its algorithm.

Figure 2. Proof of work vs Proof of stake

What do miner’s say?

The electricity consumption of bitcoin mining is a central issue which miners have to face. Although, miners believe that the energy needed for mining has advantages and it is worth the amount of electricity it consumes. Miners claim that the mining facilities have a supplementary role in energy transition and utilizing the excess generation from the renewable energy resources. Renewable energy resources such solar and wind are highly dependent on weather conditions which makes them volatile. There are instances of excess electricity generation wherein these plants have to be shut down. Generation from hydro power plants also face the same issue of excess electricity generation. Miners affirm that this shut down of plants and electricity waste can be avoided by using the excess electricity for mining which makes these plants more efficient and improves grid stability. Also, they claim a high share of renewables in the electricity used for mining. For this reason, recently, the bitcoin mining council has agreed to publish the renewable energy share in the electricity used for bitcoin mining globally.

To figure out the electricity needed by the mining pools globally, we need a brief understanding of various elements affecting bitcoin mining. As we discussed, energy consumption of the bitcoin is majorly dependent on its blockchain algorithm. The speed of the transaction depends on the processing power of the miner to make permutations as fast as possible. Every permutation or attempt to create a block is termed as a hash and the speed of a processor is measured in hash rate. So, the hash rate could give a clearer picture about the amount of energy consumed at any given moment. The highest electricity demand of global bitcoin mining in the past has been 125 TWh. In Fig.3 we see a strong co-relation between the hash rate and the energy consumption of bitcoin.

The technological shift in the processors for mining has been drastic within the years 2009-2012. The energy needed for central processing units (CPUs) in 2009 for mining was huge and its improvement in 4 years to Application-specific integrated circuit (ASIC), made mining a realistic option. Since then, there are improvements in the speed of ASIC processors but there has not been a significant technological change. If bitcoin is intended to grow the proof-of-work algorithm inherently would need higher hash rates and this would result in higher energy consumptions. This is a concern, especially now when discussions in all fields are about reducing energy consumption and moving towards greener sources.

Figure 3. Bitcoin Hash rates and energy consumption

Incentives of cheap electricity

The mining pools are sensitive to the cost of electricity. Following monetary incentives, geographically the mining of bitcoin has been concentrated in the regions where the electricity is cheaper. China has one of the cheapest markets of electricity which and helped to have a share of 65% of bitcoin mining in 2020. Germany, on the other hand, has the highest electricity prices in the world and has only 3% of bitcoin mining. Fig. 4 shows a clear trend wherein the share of bitcoin mining is inversely proportional to the average electricity prices. The prices of electricity are found to be low where the markets have higher percentage of electricity from fossil fuels and low contribution from renewable energy resources. The price has been low in China because the grid still has 71% of its electricity generated through fossil fuels.   A group of universities, examined that 40% of the electricity used by mining of bitcoin in China is from coal power plants. Although, in China, the mining share has dropped to from 65% in 2020 to 50% in 2021. This drop in the share is because Chinese authorities speculated power concerns in the last couple of months and regulated to shut down some of the mining pools. Similarly, in Iran, during summer months the power department was overburdened and the additional burden was concluded to be caused by bitcoin mining. As a result, all bitcoin mining facilities were shut down for 4 months in the country till the summer ends. The claim of renewables as a source for mining brings up a question about how the electricity prices vary with the increasing share of renewables in the energy market.

Figure 4. Bitcoin mining and average electricity price

Paradox of low-cost renewables and high electricity prices

With the reducing cost of solar panels and wind turbine blades, one can surely be misled to conclude that the electricity prices would drop with higher share of renewables in the grid. Apparently, the increasing share of renewables has been found to cause rise in the electricity costs in the market. This paradox of renewable energy getting cheaper and the electricity prices getting higher is critical to understand. According to the analysis by Forbes,  the transmission and the ancillary costs in this phase of transition accounts for more than 50% which makes the price higher than expected. The energy to land ratio of solar and wind plants is low compared to conventional resources. So, as energy transition needs high number of renewable power plants, it also needs grid expansion to access the electricity from power plants. The costs of grid expansion has been included in the electricity prices. This effect of higher prices of electricity due to higher share of renewables is expected to be play a significant role to decide electricity prices till the grid connects all renewable power plants in the future. Germany, with high share of solar and wind installations, has reached a 45% share of renewables in its electricity mix. With the effect discussed, the grid expansion has made the electricity price in Germany to be highest in the world. So, the high prices do not appeal bitcoin miners and this reflects with just 3% of the bitcoin mining done in Germany.

Figure 5. Annual electricity consumption (in TWh)


Through these energy debates, the conventional ‘proof-of-work’ strategy, has faced a lot of criticism. The coins working with ‘proof-of-stake’, an alternate less energy intensive approach, have become popular. Some established coins such as Ethereum have officially decide to migrate from proof-of-work to a proof-of-stake consensus mechanism mainly to reduce the electricity consumption in mining the cryptocurrency. Although, at the moment it is difficult for Bitcoin to migrate to ‘proof-of-stake’ considering the imposed cost and the risks on individual miners by the changes in the ecosystem.

Energy use of the bitcoin mining is a function of inter-related factors such as mining hardware, hash rates, complexity of blocks and electricity prices. There are published graphs (Fig. 5) depicting extreme scenarios of bitcoin consuming electricity more than some of the countries. Even though bitcoin mining needs a lot of electricity, comparing a technology to countries electricity consumption might not be a fair comparison. A better approach would be to compare the bitcoin mining energy use to the energy consumption of our current financial system. The electricity use of data centers, as shown in the figure, is higher than bitcoin, which means we consider data centers worth the energy it uses. A collective belief in these decentralized solutions in the form of cryptocurrency could be another prominent change. Even tough the issue of energy consumption of the first cryptocurrency, bitcoin, is a matter concern, through constant improvements and with alternate algorithms these decentralized financial systems, would adapt to better opportunities in the future.

Prospect of Green Hydrogen in Nepal

By Vidushi Dembi

Among the latest technological developments in the energy sector, the discussion on powering economies using Hydrogen technology is gathering considerable limelight for past couple of years. After the first major wave of popularity in the 1970s, the recent Hydrogen wave that started picking up in early 2000s has gained considerable momentum since 2017. Hydrogen technology, more importantly Green Hydrogen, is being considered a key component of decarbonization plans for many countries in Global North, especially targeting sectors where renewable electricity isn’t feasible, such as heavy industries and long distance transportation. Notably EU in accordance to their ‘Fit for 55’ plan targeting a 55% reduction in emissions by 2030 and climate neutrality by 2050 have set separate targets for hydrogen. Germany alone has allocated a budget of €9 billion for their national hydrogen strategy. The technology and market mechanisms still being in their early stages of development render green hydrogen prices quite high as compared to other mainstream renewable sources such as solar and wind; cost parity being predicted in some countries only by 2030. Amidst this debate, Nepal, a ‘developing country’ that contributes mere 0.027% to global GHG emissions and is among the list of countries most susceptible to climate change, is interestingly keen on making an early beginning.

Nepal’s present energy scenario

Around 72% of Nepal’s energy demand is met by biomass and waste, other prominent sources being oil, coal and hydropower (Figure 1) for the country’s population of 29 million.

Figure 1. Nepal’s Total Energy Supply (TES) in 2018 [Source: International Energy Agency (IEA) 2021. https://www.iea.org/countries/nepal]

Nepal Electricity Authority (NEA) in its Annual report 2019-20 reports a total installed capacity in the country of 1332 MW for a peak electricity demand of 1408 MW as shown in Figure 2. Country’s final energy consumption 2017 recorded the share of electricity as merely 3.66%. Almost all of the electricity produced in Nepal is from hydropower. The generation capacity is owned by public as well as private enterprises with around 22% of electricity being imported from neighbouring India as of 2020. Almost 94% of the electricity is supplied to the residential sector and around 2% goes for commercial or industrial applications. IEA reports that today only 6% of the country’s population remains unelectrified. As per Nepal’s Ministry of Finance, the country is getting electrified at a rate of 4.3% per year against the global average of 0.8%. NEA has declared that there has been no load shedding in households after 2017 and in industrial sector after 2018. In spite of the progress in electrification, Nepal stands low at a position of 102 out of 108 countries listed in the Energy Trilemma Index 2020. Country’s per capita electricity consumption remains low, one of many reasons being electricity price is still high for a major section of the population (0.069 USD per kWh). Sector-wise energy consumption is topped by the residential sector (75%) followed by transport (12%) and industry (8%). The country is majorly dependent on imported fossil fuels especially crucial for transport sector which entirely runs on oil. Nepal also has largely unexplored but high potential of other renewables such as solar PV, solar thermal and micro hydro.

Due to various reasons such as high import dependency, insufficient storage capacity, inadequate infrastructure and financial constraints of the energy institutions, Nepal faces an energy shortage. The abundant hydropower potential remains largely untapped and the country continues to face challenges to maintain reliable and sustainable energy security.

Figure 2. Total energy available and peak electricity demand 2011-2020 in Nepal (Source: Nepal Electricity Authority, 2020. https://www.nea.org.np/annual_report)

The case of ‘surplus’ hydropower

Reliable electricity access goes hand in hand with GDP growth and hence increasing the share of electricity in the total final consumption forms a major focus for the government. Situated in the Himalayan region with almost 220 billion cubic meters of annual water runoff from the rivers, a 2020 report by Asian Development Bank (ADB) estimates a potential of 83 GW of hydropower in Nepal out of which 43 GW is techno-economically feasible as of now. As of 2019 however the installed capacity of hydropower stood at only 1113 MW which means only 2.5% of the total potential is currently being utilised. Recent estimates by Kathmandu University suggest more than 20 GW of hydropower projects are under various stages of development. NEA owned hydropower plants generated a total of 3021 GWh of electricity in FY 2019-20, an increase by 18.57% over the generation of 2548 GWh in FY 2018-19. Interestingly, provided that the current plans of hydropower development follow through, there is a scope of energy surplus, with figures indicating an excess of 3500 MW of hydroelectricity by 2028. Hydropower plants in Nepal also generate maximum output during rainy season from June to September. However, country’s energy demand is actually low during the time leading to large energy curtailment. NEA estimates hydroelectricity wastage between 53 – 840 MW in 2021 due to low consumption in rainy season. Since the electricity can’t be utilised locally, Nepal also plans on expanding its export options to neighbouring countries of India and Bangladesh experiencing high growth in energy demand. The exports plans have failed to fully materialise yet due to variety of reasons such as infrastructure unavailability, legal issues and geo-politics. Other renewables such as solar are abundantly available in India which are much cheaper than hydroelectricity making the option economically unattractive for India. Transfer to Bangladesh means setting up infrastructure through the Indian mainland that lies in between, impeding any major action. Some development was seen recently in this regard with the three countries in talks to finalise the process of exporting 200 MW electricity to Bangladesh by end of this year. Going a step forward, since 2020 Nepal has initiated the dialogue on utilizing their surplus hydroelectricity and untapped solar potential to establish the country as a major green hydrogen producer for local use as well as international markets.

A case for Green Hydrogen

Hydrogen can be used in either gaseous or liquid form as fuel or for generating electricity. It isn’t freely available in nature hence has to be produced using other energy sources. On the basis of production technique, hydrogen is often classified into colour categories of black, brown, grey, blue, green; even turquoise and purple hydrogen. Today approximately 70 million tonnes of hydrogen is produced globally for use in the industrial sector, most of it being produced by using fossil-fuel sources. The latest centre of attention – Green Hydrogen – is produced using electrolysis of water that splits water into oxygen and hydrogen using renewable electricity, generating two useful end products without contributing emissions to the atmosphere. ADB’s 2020 report ‘A study on the prospect of Hydropower to Hydrogen in Nepal’ studies the country’s scope of green hydrogen production with different levels of assumed hydroelectricity curtailment along with exploring costs of production and energy storage. The report suggests that given Nepal’s conditions of abundant hydropower potential ultimately expected to produce electricity more than the demand, yearly curtailed/wasted hydroelectricity during rainy season due to lower demand, and complications associated with developing hydropower projects as per plan, generating green hydrogen and storing it to fulfil the energy demand during seasons of higher demand is an option worth exploring. Another area of interest for the country is their rapidly growing transport sector which is currently 100% oil dependant and can be potentially powered using hydrogen fuel-cells.

The government in 2020 conceived the ‘National Hydrogen Initiative’ (NHI) to explore the possibilities in a concrete way and establish policy foundations. The main targets of NHI include policy interventions and financing, establishing pilot projects, supporting business for more commercialisation and developing institutional arrangements to support related activities. The government has initiated a collaboration with Kathmandu University and their recently established ‘Green Hydrogen Lab’, whose contributors include the Nepal Oil Corporation and the Norwegian government. Nepal has a potential of becoming a hotspot for cheap green hydrogen production in the future, which is also beneficial for countries in the Global North such as Norway, Denmark and Germany who have elaborate plans for transforming into hydrogen economies but don’t necessarily have the most economically feasible ways to produce the required hydrogen themselves.

Challenges for Green Hydrogen

Even as the share of traditional energy resources in Nepal has slightly decreased, the corresponding energy is being filled in by fossil-fuel sources such as coal and oil. These fossil fuels are largely procured from imports, with the import trends drastically increasing since 2013. Electricity affordability is still a major concern with a consumption of only 238 kWh per capita per year which is one of the lowest in the world. Limited institutional capacity has often led to unfulfilled targets in the past, which is most evidently seen in case of the country’s EV targets. Nepal’s 2016 Nationally Determined Contributions (NDC) for UNFCCC set an aim of increasing the share of EVs up to 20% as compared to the 2010 levels and 50% reduction of dependency on fossil fuels in the mobility sector by 2050. The share of EVs actually stood at less than 1% by 2020, leading to a target revision of 20% EV share in private passenger vehicles by 2025 in their second draft of NDCs. Especially when many have argued (famously Elon Musk) that electric vehicles make more sense than hydrogen-powered vehicles, perhaps focussing on EVs for decarbonizing mobility sector could be more beneficial for the country. The sophisticated hydrogen plan could be a long shot given the history of difficulties with materializing their more abundant primary renewable energy sources such as hydro and solar.

Despite high developments in electrolysis technology, electrolysis still remains a highly expensive process which can be a major challenge in the country’s hydrogen plan. Green hydrogen is still 2-3 times more expensive than blue hydrogen and is expected to match blue hydrogen costs only by 2030. For a country with population struggling with affording fossil-fuel generated electricity, hydrogen technology for local use can appear a distant dream. Another frequently cited crucial barrier for hydrogen technology is its low efficiency of around 30% by the time it crosses multiple conversion stages to finally reach the motor or battery. Moreover, even if GHG emissions aren’t a direct end product of the process, exporting green hydrogen internationally would involve generation of a huge carbon footprint.


As Nepal is still facing challenges to decrease the dependency of traditional energy sources, a dialogue about Green Hydrogen is somewhat unexpected but nevertheless worth exploring. A strong political commitment and institutional support along with eagerness from the industrial sector would be essential. Also important is planning out models of possible value chains and carrying out detailed cost analyses. The country has already initiated the consolidation of a Hydrogen action plan. If successful, it could have the potential to transform Nepal into a highly profitable manufacturer of the green fuel for global markets e.g., for regions like Europe spearheading carbon neutrality and neighboring country India also increasingly focusing on hydrogen. International collaborations could hence be a huge benefit with Global North assisting with technology and capacity development. Ultimately, the basis of this scenario is Nepal’s highly underutilized Hydropower (and other renewables) which, in parallel to the Green Hydrogen plan, should be given prime attention.

Achilles heel of Renewable Technology

By Aditya Chhatre

The first ever paper on the variations of atmospheric carbon dioxide contributing to long term climate changes was written in the year 1896 by a Swedish physicist Svante Arrhenius. For the analysis in this work, he uses the term ‘carbon acid’ to describe fossil fuels as a source of carbon emissions. The paper mentions fossil fuels to be a potential source for the carbon dioxide. Although later in his works, he articulates fossil fuels being the major contributor to global warming. As the electrical industry is highly based on fossil fuels, the concept of energy transition has carved its way in seeming as the unavoidable solution to most of the climate problems. Parallelly, research and development in solar and wind energy technologies had its advancements which created a sense of optimism. These renewable technologies with their high costs and having generation inconsistencies, were quite a dream to become reality in 1950s. But the urge to achieve energy transition has been only growing. Eventually, the price of electricity from renewable energy technologies dropped lower than electricity from conventional fossil fuel resources. Countries started to aim for targets of 70-100% share of renewables in their energy mix as fast as possible. Fossil fuel-based electricity is one of the largest contributors to carbon emissions. Also, various sectors such as transport, agriculture ought to increase the electricity consumption. Given these circumstances, energy modelling has been useful for forecasts future scenarios and requirements. We can call this century as the century for ‘Energy Transition’. Few countries have achieved and many are deploying solar and wind farms with their maximum capacity to achieve the transition. The global urgency is such that 2050 is set as the year to achieve carbon neutrality by most of the countries.

In these times where humans are trying to realign their carbon dependency, the focus has majorly been on energy resources such as solar PV, wind and batteries. Let’s look into the case of plastics – a light, durable and cheap product which turned out to be a game changer in our everyday life. Visiting grocery stores in 1950s, it was hard to find something which can keep the products more durable, increasing their shelf lives. 70 years later, it is really hard to find any product without plastic rapped around it in a grocery store. Immoderate amount of plastics made it difficult to handle turning the situation undesirable. Moreover, various types of plastics, made it worse for organized recollection. Recycling plastics has caught the eye of several start-ups but as the material is a composition of complex elements it makes it hard for the recyclers to separate the plastic which could be recycled in one facility. Countries such as US, Kenya, EU have banned the use of single use plastics. On the other hand, countries such as UK have tried introduction of tax on plastics bags with fines for breaking rules. It is a big task to get such a useful product out of the supply chain. There are lessons to be learnt for our energy transition. Renewable energy technologies are surely beneficial than the high carbon generation technologies. Concern here is to avoid the energy transition being the same story of starting a revolution with optimism and in 2050 finding a clueless heap of materials to deal with. This rapid change has vulnerabilities which are easy to miss out and it is better to assess and act on them. One of such weakness in the renewable industry is lack of circularity.

To have an estimate of the amount of recycling capacity needed, we have to look at the material requirements for individual energy resources. The material required for the different sources of energy are shown in Figure 1. Solar and wind power plants have the highest material use per Tera watt hours (TWh) of electricity production. Even though these power plants are not carbon intensive, they need a lot more material than conventional sources per TWh. After the designed life of a panel or a wind turbine, the challenge is recollection and then creating a business model which use the recycled material back in the economic chain. Renewables have a characteristic challenge when it comes to recollection of panels or turbine blades. Solar and wind power plants need much more space for the same amount of electricity generation than the conventional thermal power plants. The non-concentrated designs, increases costs and scheduling time to transport the waste to the recycling centres. Another thing which needs to be taken care is that the life of these resources is 20-25 years compared to the conventional plant of 40-50 years. Because of these reasons it is very likely that the solar panels, wind turbines and batteries have higher chances of being mishandled and landing up in the landfills without proper processing. It now becomes a need to increase the recycling capacities, ideally targeting recycling capacity to be consistent with the installed capacity. It is important for designers, policy makers and entrepreneurs to already align recycling techniques, predict the expected timeline and deploy the recycling facilities at necessary geographical locations.

Figure 1. Range of material requirements for various electricity generation technologies

Solar & Wind

Solar PV and wind power plant’s rising trend is expected to grow even further as the technology progress. As of now 629 GW of solar PV and 742 GW wind has been installed globally. To achieve energy transition, models recommend the growth to be 10-12 times of the current installations till 2050. The average life span of solar panels designed by the manufacturers is for 25 years. Also there have been cases, maintaining panels regularly, increased solar plants life up to least 30 years or even more in some applications. Recently, a study from Harvard reviewed the market PV panel replacement rate. The study shows that the utility and residential customers connected to the grid replace the modules after their mid-life period (15-20 years) which makes an economically beneficial decision considering the current technology improvements, panel prices and electricity prices. In 2021, we can expect that the panels from 1990-2000s have already started to be decommissioned and replaced. Similarly, the wind turbine blades which have a life of 15 years. Working on the yearly installation rate, Figure 2 shows the cumulative million tonnes of panels which are expected to be out of service till the year 2046. The graph gives a clear picture of the expected timeline and the quantity of the renewable waste. Solar panel and wind turbine blade waste is calculated according to the installations and assuming average weights. Also, wind technology saw an earlier installation phase even before the solar technology deployment started extensively. Therefore, we can expect a higher quantity of turbine blades as waste before high number of solar panels are decommissioned. But eventually, as solar plants have higher material to electricity densities than wind farms, solar PV waste would cross over wind waste around 2040. If renewable recycling processes are not in place, the waste would be 50 and 30 million tonnes till 2046 for solar panels and turbines blades respectively. To have a comparison, these quantities are way more than Australia’s one-year solid waste of 13 million tonnes. We can expect a boost from the year 2030 where we need to be prepared with the recycling  sectors supply chain which can handle this amount of the renewable wastes.

Figure 2. Solar and wind waste quantities 2021-2046 – (Self)

Photovoltaic panels have glass, aluminum and silicon as dominant materials. Project owners usually take the easy way to send the panel to a glass recycler who uses the glass and scraps the rest. Globally, photovoltaic panels are broadly of 2 types, Silicon based and Thin-film based. As silicon based solar panels are common, the processes are developed for its recycling and is comparatively less energy intensive than recycling thin film based solar panels. After removal of the glass the solar cells are retreated with thermal processes and the silicon is reused in the form of modules and other applications. Laws for collection of solar panels are inconsistent even in developed countries. Such as in US there exists a state wise plan which is not consistently stringent nation-wide . In 2012, EU WEEE included solar panels in their electronic waste category. According to this regulation, it is mandatory for the manufacturers and companies in EU to collect the panels after their use and put them back in the recycle chain. The companies are also allowed to charge extra for the post product life activities. This framework has helped the EU solar industry to recycle 80% of their panels. This is a great way to make the authorities responsible for handling the waste and making the recycling market profitable. Similar regulations are been drafted in various countries and would soon be implemented to make solar industry more circular.

Wind turbine blades are made up of composite materials which are highly durable and light. Apart from wind turbines, composites are also used extensively in sectors such as constructions, transport, aeronautics and electrical components. So, a viable solution for recycling composites will have a positive impact on all these sectors in the terms of circularity. There are composites recycling options such as solvolysis and pyrolysis. But particularly in the wind sector it is not possible to shred the blades on site because of size and feasibility of the cutting processes. This is the reason for high costs for transporting back the blades to the recycling centers. Freight costs being high, this makes recycling an economically non-viable leading to the convenient decision to dispose the blade in a nearby landfill. Currently unlike solar panels, there has been absence of recycling regulations and laws for wind turbine blades. Even countries within EU like Germany and France are still in the research stage to implement wind blades recycling policies mainly due to the site shredding blades and transport issue. However, a project, ‘zero waste blade research’ (ZEBRA), is a 24 months project launched in September 2020 for 100% recycled wind turbine blade. This project is been regarded as an opportunity to have a full-scale opportunity for achieving technical, economic and environmental solution necessary for recycling wind turbines and reducing the blades waste.  


The stagnant lead acid batteries market, have seen a steep rise with the advancement of lithium-ion technology in this decade. The demand of portable device and electric vehicles (EV) have bolstered the additional investment in the development of the technology. Along with it, the current trends of compatibility of batteries and renewable energy power plants for residential and grid applications has put pressure on its manufacturing capabilities. There are also questions to be answered about the end-of-life of such huge number of batteries. To consider the EV industry there are studies claiming the batteries after their life in an electric vehicle still have 70-80% capacity. These secondary applications of batteries are particularly used at charging stations or connected to the grid for ancillary applications. This improves life of EV batteries by at least 7-10 years. After a certain threshold there has be recycling tie-ups of battery manufactures for their specific battery type. The lithium-ion technology all together is a broad concept with different anode and cathode chemistries involved. Each battery application employs a different technology, which raises serious concerns over type of material used, its availability and recycling these new used batteries. Battery technology is still undergoing huge transformations; hence the topic of its recycling is still of secondary priority, but is nevertheless important.


We need a conceptual change where products need to have more recycled material percentage and use lesser raw material at the design stage focusing on energy efficiency and recyclability. This is a sectoral challenge where not only recyclers but manufacturers and customers have to play an active role together. Bad handling would weaken the advantages of using renewable technologies. For project owners and users, recycling can be a demanding extra step, which is also currently non-economical. We need to act pro-actively by taking steps such as not scrapping the panels, batteries and wind turbines blades to a convenient local with no expertise of recycling, but contact recycling authorities/companies and make this energy transition truly effective. There are scenarios wherein countries within EU have better recycling rate for batteries and solar panels compared to other developed nations. Hence, recycling rates are variable and eventually they would be less dependent on the technology rather more on the geographical location.

The volume of renewable waste is expected to increase exponentially and even go over the board from 2030 if recycling facilities are not in place till then. A business model should include the amount of renewable waste streamed back into the economy and in due course should make recycling profitable. Whether be it a company or a country the task is to have a 100% close loop system reusing and recycling materials. National and governmental policies are key to incentivize this market. It is crucial for governments and regulators to introduce and fund organizations working in this field to strengthen them to be efficient by the end of this decade. The recycling industry is that the sector will have a swooping growth as an effect of the market demand at the point when recycling of these products gets cheaper than mining the needed raw materials. This could be the point where market needs and the environmental needs meet.

The light bulb conspiracy: Phoebus Cartel, 1924

By Aditya Chhatre

The light bulb at the fire station of East Avenue, Livermore, California has been operational since 1901. This incandescent light bulb has seen both the World Wars and is operational for 120 years now for more than 1 million hours. This 60W hand-made carbon filament light bulb was manufactured by Shelby Electric Company in Ohio.  The decades of 1880 and 1890 were revolutionary for various incandescent light bulb designs and patents. Towards the start of 1920s the operational hours of these lights were over 2500 hours. Today, the average life of the similar incandescent light bulb is 1000 operational hours. How did we land up at such a design?

The invention of light bulbs dates back to 1878, the year when Thomas Edison had filed a patent with a vacuumed glass bulb with carbonized filament. This filament, when supplied with a voltage across it, after a threshold temperature, would emit light. After improvements in the filament material, the incandescent light bulb was in the market for use from 1880. The next technological development in the light bulb industry was from 1940-1980s where mercury-vapor lamp was used to produce visible light using fluorescence. These fluorescent tubes would excite the mercury when supplied with electric current, leading the inner phosphor coating to glow. Further at the end of the 20th century, a P-N junction-based light emitting diode (LED) technology was determined to be more efficient than the earlier ones. The LED light bulbs have been in the market since 2010. In 2020, the light bulb industry stands at a point of ‘socket-saturation’, a term used in lighting industry which describes the decline of incandescent bulbs and fluorescent bulbs as a whole, getting replaced by Light Emitting Diodes (LEDs). Light bulbs with LED technology, within just a decade, have growth to a market share of around 50%. At this point, it is interesting to look behind to a significant event in the evolution of the light bulbs. It is worth visiting this incident, which shows the pitfall when a better technology grows over the older one.

The Phoebus Cartel

In 1923, the sales of a major lightbulb manufacturing company based in Germany, OSRAM, dropped from 63 million to 28 million. The cause of the reduction in the growth was linked to the increase in the product life of the light bulbs which was about 2000 hours. A similar pattern was also felt by other bulb manufacturing companies. In 1924, the head of OSRAM was one of the first to propose a meet in the city of Geneva, Switzerland. Major lightbulb manufacturers met in Switzerland, including OSRAM, Philips, Compagnie des Lampes, and the General Electric. This body of bulb manufacturing companies was named as “Phoebus SA Industrial Company for the Development of Lighting”. Eventually this took form of a planned obsolescence by deciding to devalue the design of the light bulbs and limit them to 1000 operational hours. All light bulb manufacturers were obliged to send samples to the test facility at Switzerland. A deviation from the decided limit of 1000 hours resulted in heavy fees. This cartel achieved success within 15 years. The average operational life of the light bulbs was dropped from about 2500 hrs. in 1923 to 1200 hrs. in 1934. During the process, the increased volume reduced the manufacturing prices. Profits increased and as planned, the bulb manufacturing companies grew by 25% from 1926 to 1934.

Figure 1. Designed operational hours of incandescent light bulbs from 1879-1934

Although new technologies were given pathways after the failure of the cartel in 1940 due to the tension between countries during World War II, even after almost a century, in 2021, the average life span of incandescent lamps still stands at 1000 hours.

Closely looking at the companies of the Phoebus Cartel, after the penetration of LEDs, most of them have moved away from the front-line light bulb manufacturing. Philips dropped off the Philips Lighting into a stand-alone company, forecasting the decline of the conventional lamps market. OSRAM and G.E. took the similar path of moving out by separating the lighting business into an independent company. Not that these companies have moved out completely; they have found other markets with LEDs such as ‘smart’ applications and street light with sensor applications. LED technology has risen from such times, which have a life of 10,000 to 50,000 operational hours. Principally, the point of concern is the lack of a business model of lasting products such as the centennial light bulb. The increased life of the products, surely creates a hiccup for the economic growth. Moreover, it could also possibly impact the society by lowering down the employment rates as there would be less need of factories and its workers. The choice is between an ever-growing economy and an everlasting product market. With the inclusion of LED technology, have we found the model to move from the short-lived to long-lasting products?

Course of action

In spite of the increased importance of concepts such as energy-efficiency, recyclability and biodegradability, the repetitive sales business model which became popular in the last decade of the 20th century still appears dominant today. However, we’re seeing shift in trends for a few decades now with concepts such as circular economy emerging in the limelight. Many big businesses of today acknowledge the need of more sustainable economic models. This change would partly be driven by regulatory bodies which would support longer lifetime of the products. It would be difficult for the highly durable product market, having slower economic growth, to penetrate into the countries which use economic growth as their performance indicator. Tim Cooper, a sustainable-consumption researcher and a professor at Nottingham Trent University, suggests solutions for the systemic change for increasing the durability of the products and having economic stability:

  • Premiums: Premiums are currently used as a marketing technique for product placements and achieving higher profits. The higher premiums could be on the basis of uniqueness, limited edition products or could be on brand name. Premium products are believed to be having higher quality than a standard one. Based on products durability, an equivalent to the costs of conventional products, a premium can be charged to the products with higher life. The economic slowdown due to increased durability could be neutralized by such a strategy.
  • Second hand sector: A parallel business market shall be important to increase the use of products. A platform for second hand market will be beneficial to help for maximum circulation of products. This idea has started to take its shape, with big companies taking initiative. One of the such initiative is from Ikea, launching a program of taking back used furniture. The program is called ‘Buy back’, encouraging customers to hold up against aggressive consumption.
  • Rating schemes: Ecolabels such as Norway’s-Nordic Swan, EUs-Blue Angel have given a significant importance to the durability criteria for approval of a product. These schemes will make customers aware of products life, providing them information to compare products and make a better choice.
  • Tax: To incentivize products, the transferring the taxes of the labor segment to the use of energy and raw materials could aid the program, with the aim to have high prices for manufacturing new products and reduced cost for repair of the older ones. Also, a strategy with the sales tax could help similarly, by allocating a portion of the sales tax linked to the lifetime of the products, making short-lived products costly to buy.

From the learnings of the Phoebus Cartel, LEDs have overcome the limitation by increasing energy efficiency and lifetime of the light bulb. But it is still a long way for the markets to transform to an economy which could sustain products such as the centennial light bulb. Finally, it is a cultural shift of the mind-set from the newest and latest to the oldest and best.