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Lux: Total is leading example of oil supermajor expanding into solar plus storage and distributed generation

9 August 2016

France-based Total is the first oil supermajor aggressively to enter new areas of business including solar plus storage and distributed generation, notes Lux Research in a new report: “Superpower Darwinism: What Big Oil Can and Cannot Do About Total’s Billion-Dollar Battery Move.”

Even though viable battery companies have become harder and more expensive to buy since Total’s $1-billion acquisition of Saft (earlier post), the oil supermajors—BP, Chevron, ConocoPhillips, Exxon Mobil, Royal Dutch Shell and Total—have cash piles ranging from $5 billion to $30 billion each, despite shrinking profits since 2012 and uncertainty about timing of the eventual recovery of oil prices.

Expanding into an area outside of the oil supermajors’ expertise is risky—batteries are a hard business to win even for industry veterans—but action is key as transportation and the grid increasingly march toward more electrification, Lux suggests.

As Darwinism looms for the future of power, oil supermajors looking to evolve must choose among more expensive, broader battery players. But they should still act, as waiting longer or doing nothing, would be an even worse outcome.

Worthwhile battery companies continue to gain value and build momentum with each passing day, as do other opportunities toward a distributed generation futur. Indeed, the recent Tesla-SolarCity merger highlights the increasingly high-stakes race to integrate the future pieces of power, which are underpinned by distributed solar and advanced energy storage.

—Cosmin Laslau, Lux Research Senior Analyst and lead author

Lux Research analysts evaluated potential acquisitions for oil supermajors in the light of Total’s acquisition of Saft. Among their findings:

  • Samsung SDI, Toshiba, NEC are potential targets. Top battery-makers such as Panasonic, Hitachi and China’s BYD might be out of reach for most oil supermajors, given that each is a larger conglomerate valued in excess of $20 billion. But Samsung SDI, Toshiba and NEC are affordable targets, and more focused businesses too. Still, each will cost much more than the $1 billion Total paid for Saft—a transaction that today looks like a positive bargain.

  • Asia challenges loom for battery acquirers. Even though the battery business is a truly global one, most battery companies remain Asia-based, posing potential integration challenges for a major acquirer. Still, Korea’s LG Chem, for example, has a factory in the US, and NEC has a US presence via its acquisition of A123 Systems’ energy storage division.

  • It’s not just the battery anymore. Total’s moves are not about the battery but also about solar and distributed generation. It bought a controlling stake in SunPower in 2011, years before it bought battery-maker Saft. It also has made smaller plays in distributed generation through Stem, Sunverge, Powerhive and Off-Grid Electric. Total’s approach has important lessons for other oil supermajors, and suggests it is no longer enough to buy a battery company. To make the most of the emerging opportunities, solar or wind is also key, as is being active in connective software and hardware.

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The report is part of the Lux Research Energy Storage Intelligence, the Distributed Generation Intelligence, and the Exploration and Production Intelligence services.

August 9, 2016 in Batteries, Market Background, Oil, Power Generation, Solar | Permalink | Comments (10)

Comments

A logical move by an Oil major. Will be followed by others? Coal, NG and electricity suppliers will most probably also move in REs with storage with large and small distributed units?

TESLA-Panasonic will have serious competition?

Will TESLA-Panasonic build mega-factories in Asia and EU to supply local markets?

About time these frigging idiots recognized they are ENERGY companies and started to diversify.

This is like VW and diesel or the coal industry....suck it up and change or some other company will be the "energy majors" in 20 years and you'll be another trivia question for our grandchildren.

Solar + Storage is better than Solar alone, but you will still need a dispatchable power source (such as gas) for runs of dull days.
If you have a system that can generate and store enough electricity to get you through a winter night, you will still have a problem if you get a dull day (or days).
Thus, you wtill need gas (or whatever), but you only need it (say 20 days / year), so the capital cost of the backup becomes very large (when divided by the output).

Nontheless, I think that is our future (mostly solar/wind + storage + transmission + rarely used dispatchables (oil/gas).

It won't be cheap, though.
[ Solar alone may be cheap, but by the time you have a reliable 365/24 system, it isn't cheap ]

Better ways will have to be used to better match REs production with consumption to reduce storage and associated cost. Many tasks such as EV charging, hot water heating, washing/drying, dish washing, etc can be (automatically) delayed to match lower cost e-energy availability. Heat (and cold) can easily be stored and released when required. H2 and biofuel FCEVs could do a lot to even loads.

Building codes can be changed for current and future apartments/homes/offices to drastically reduce energy usage.

Near future 200+ lumens/watt LED lights for homes, offices, streets etc could further reduce e-energy usage. The same can be done with flat TVs, PCs, Tablets, Phones, Game players and most gadgets etc.

Eventually, lower cost home e-storage units to supply essential needs 24/7 may become a reality.

H2 contains 142 MJ/kg = 40kWh.
Best Li-batteries contain 0.3 kWh/kg

One tesla powerwall has 6.4kWh.
This is as little as 150 grams of H2.

The Tesla powerwall deliverd 3.3 kW.
The Mirai fuelcell delivers 140 kW.

The H2 tank of the Mirai contains 5kg of H2. This equals 110 powerwalls !!!!!
And it is small, light and safe enough to put it in a car that may crash. So it is surely small and strong enough to place it where you would place a powerwall

With an efficiency of only 80%, this 5kg of H2 still equals 88 powerwalls.

So, if a powerwall can help you through 1 day, 5kg of H2 can help you through 3 months.

No Science fiction. Next gen fuelcells will be much cheaper than today's.
Mass-produced H2 tanks will become very cheap, and very scalable. If you want 20kg. Just put more tanks. (You don't need more fuelcells)

Distributed generation will definately be the future.

Alain, it's a little unfair to compare the kWh/kg of H2 to Li-batteries if you are only including the mass of the hydrogen. To use the hydrogen you have to be able to cycle it from electricity to storage and back. Tesla's Powerwall does this with its all-in weight of 97 kg. What is the all-in weight of your hydrogen fuelcell "system."

These state crooked everywhere are really dicided to kill the worldwide free market everywhere with these moron policies and regulations, now they want to convert by coward means the biggest profitable energy companies to stop providing what we need. Can we comfortably still produce cheap plastics, asphalt, jet fuel, gasoline, lubricating oil, diesel. These are the cheapest most abondant products that EVERYBODY is using. Stop this green taxpayer hoax and free the oil majors. These crooked medias, banks and politicians are behind this sheme and i hope trump will vindict them.

These frenchies are really smart, they truly get ready for the after oil, oil companies who fail to diversify now will be trapped in a down spiraling game of buying back their stock to maintain their values , futile resistance.

gor, the time of denial is over , why don't your serve yoursel some crude oil at your breakfeast since you like it so much , here we all hate it...

@ai_vin,
I agree the weight and volume of the fuelcell and electronics should be added to make a fair comparison.

The Mirai fuelcell delivers 114kW and fits in the car.
It has a power density of 3kW/liter, which means a shoe-box size (30cm x 15cm x 15cm) could deliver about 20kW (=3 powerwalls). you also need a small H2O tank to store the liquid pure H2O for cycling to H2 and back.
However, if the H2 is not cycled to H2O and back, but taken out to fill your car, you will also need water treatment stuff. in addition, you will need ventilation to evacuate the heat (20% of energy is lost while charging and while discharging, and also quite some energy to compress the H2). So it will become a lot bulkier than just the H2 tank. However, at this moment, the most crucial parts are already on the market and fit in a car that can drive around and should withstan car crashes, and has a huge power of 114kW.
A particular advantage is that the H2 tanks and the fuelcell are separate. so, increasing your capacity can be done independent (and very cheaply) from your power output. You only need an additional tank.
All together, the electronics and fuellcell would surely be much smaller than a fridge or a washing machine. For the tanks it would depend on the pressure and capacity, but for a capacity equal to the powerwall (less than 300 grams of H2 !!!), it would also surely fit in the small box.

It can be done by having everyone its own power plant at home, which is more expensive (though ultimatly probably still quite cheap), but practical to utilise the waste heat, and comfortable because distributed electricity generation with millions of small powerplants connected to the smartgrid gives a very robust, reliable and independent grid, most likely with very abundant power capacity.
The alternative is relatively small fuelcells of for instance 10MW (which is only 100 Mirai units in parallel), distributed in the cities, but operated by companies. This is still very distributed compared to today's powerplants, and much more "free market". This also would allow heat use for buildings, companies, hospitals...

Just like second-life car batteries can be used for at-home electricity storage, second-life fuelcells from H2 cars will soon be available that can be used for this. If you compare the power of a car with the power needs of a house, very few "recycled cars" can provide all the power we need.

Anyway, I am very confident that the weight or volume will be a non-issue, while very economical to store green electricity for months.
A particular additional advantage is that large scale deployment makes the whole H2-economy very cheap, opening many other opportunities, such as synthetic jet fuel, synthetic food (via chemotrophic bacteria, which could produce huge amounts of food from renewable energy + air(for CO2) + seawater(for H2O and minerals)).

FCs are in an early development stage. Future biofuel and H2 FCs will be more efficient (from 60% to 80+%), more compact with much higher energy density, produce less noise but enough heat to keep the passenger cabin warm.

Another advantage with FCEVs is the possibility to supply plenty of energy to the household during extended power failures while recharging its own batteries + the family BEV batteries overnight for days or for as long as fuel is available.

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