Kylemore Capital

Is electrification the answer for the shipping industry going green?   The short answer is no.   While for shorter distance passenger transport, battery electric is already the standard in parts of the world, freight is another matter. No battery is powerful enough to propel a fully laden freight ferry across the North Sea, let alone a large deep sea vessel traveling for weeks on end.   LNG propulsion and sustainable fuels such as methanol, hydrogen or ammonia are the likely interim and long-term solutions here – that is, once the requisite supply and bunkering infrastructure is put into place.   However:   Electrification of port infrastructure will play a key role in the shipping industry’s decarbonisation with an inevitable shift from fossil fuels to electrified processes – and soon.   Seaports have multiple areas of activity well suited for electrification: - Shore-to-ship power as large vessels stand by during port calls - Enormous cranes and all sorts of cargo handling equipment - Port owned terminal tractors and drayage trucking fleets - Provision of opportunity charging for eHGV drivers coming and going with cargo   Ports will become heavy users of electricity in a short period of time and optimised energy procurement and management really is something to think about today.   #Decarbonisation, #EnergyTransition, #PortManagement, #SustainableLogistics, #Electrification, #eHGV

"Heat Pump Valley": Europe’s Powerful Manufacturing Base But for how long? Momentum in the uptake of heat pumps in Europe has been strong, with double-digit expansion over the past decade, including a significant “surge” (+38% YoY) in 2022. However sales in 2023 were materially lower and YTD 2024 appears to be an even steeper slump which puts recent investment in capacity "at risk". Why is this important? Decarbonisation of the built environment through the electrification of heat is a material pillar in the journey to Net Zero. It's more efficient and green. Europe has a strong manufacturing base with material global market share and technological advantage - with significant investment in capacity announced by major players over the past couple of years - but for how long can this be maintained? Competitive Chinese manufacturers are increasing their global market share and, if they continue their trajectory, could well dominate the global market as with battery technology and solar. What happens next? Political winds are changing in North America, while Europe will need to organise itself and determine how it too can look to grow and protect its own manufacturing base.

What’s the viability of alternative EV charging technologies? Inductive Wireless Charging: Likely to require significant infrastructure investment and network disruption, as well as introduction of vehicles with corresponding capabilities. In the UK, as one example, this feels less feasible (anyone in favour of digging up and resurfacing the M25?). However, for stationary vehicles such as taxi ranks, never say never. And yes, Elon would disagree on this point! Swappable Batteries: Standardisation requirements mean it’s likely too late to be adopted by passenger vehicles, at least in the Western world. However, for mass transit and eHGV fleets with their higher energy requirements and depot constraints, swappable battery pools could offer an elegant solution for in-depot charging – and open up significant cost saving potential when considering co-location of recharging and generation assets. Solid State Batteries: With higher density, charging speed and range, these could be a game changer for vehicle types yet to universally adopt EV technology. The results from various pilots will be deeply interesting to follow.   Our Take: It does not feel like one particular tech will become the dominant “killer app” for EV charging but rather the industry is likely to utilise a portfolio of established technologies, each fit for purpose. Traditional fixed batteries look set to remain mainstream for pax EVs. For larger vehicle fleets, one would be remiss not to investigate technology options early when looking at deployment. And the fundamental fact that “Power is King” is unlikely to change – generation and grid connectivity will remain key to CPOs and EV fleet operators. #EV, #EVCharging, #EnergyTransition, #Transportation, #Electrification, #CPO, #eBus, #eHGV, #Fleet

What is your path to Net Zero? The destination is clear but the route to getting there brings with it challenges and major strategic decisions. In addition, are you capturing the commercial opportunity ahead? - What is an appropriate Return on Investment for Net Zero investments? - Which solutions make most sense for my business? - Do I have a team with the market knowledge and experience to deliver? - What are the risks and opportunities within the evolving supply chain? - How should I prioritise capital allocation? Executive leadership across a broad range of sectors are facing some key strategic decisions which require the expertise, knowledge and insight to best position for the energy transition and realise both green benefits and the commercial opportunity ahead. #NetZero, #Energytransition, #Leadership, #CEO, #CFO, #Chiefsustainabilityofficer, #Boardmembers, #Electrification, #Transportation, #Fleet, #Industrial, #Grid, #Heat

This is very welcome state planning of infrastructure where it is most effective, cutting out inefficiency and moving viable projects forward. Plenty still to do to demonstrate progress but a welcome step in the right direction.

Hesitancy on Heat Pumps? It was a policy set by the former UK government to meet a 600k per annum roll out of domestic heat pumps by 2028, which seems some what "off track" to say the least. Why Heat Pumps? The efficiency of heat pumps enables more heat for less electrical input and when renewable generation is the input, enables an entirely renewable based system and improves energy security ie no gas. They are a proven and reliable technology - cold climates like the Nordics have high adoption and warm homes. Why does it matter? There is concern in government that the capital expenditure will be a significant burden on households as we head into a difficult budget. That's a genuine concern but the world isn't going to wait. Europe has a competitive lead in technology and efficient manufacturing (unlike solar and batteries), with c.60-70% of heat pumps installed in Europe, produced in Europe, with c.20 sites located across the EU. The UK is behind and, like with batteries, if it doesn't compete it will miss out on the opportunity to convert heating manufacturer assembly lines, create jobs and skills, innovate through R&D and develop local capacity to manufacture for home market and export abroad.

"Buy now, pay later" It's a finance concept which has evolved from the original hire purchase and leasing models to a modern, frictionless, peace-of-mind solution and is again alive and well in the Public Transportation sector with the rise in "As A Service" and other split or shared ownership models. Although it may be an easy "solution", is it the right solution and is it good value for money? How should you measure this? A well-calibrated Total Cost of Ownership ("TCO") model is one yardstick, among several, to help comparability but asset management is an active game if you want to optimise for the best outcome. How should Public sector Combined Authorities and Private sector Operators assess to make the right determination? Over what time horizon? We believe that a well thought through strategy and a long term, independent perspective is needed to make the right decisions for taxpayers and stakeholders to ensure value for money.

With high energy prices and cheap imports, it was almost inevitable (albeit not popular) that the European Commission would finally vote to raise tariffs to counter state subsidies supporting the overcapacity of Chinese OEMs and cheap exports. This doesn't make the path forward any easier for European manufacturers from here - it buys them time. The European EV and Battery supply chain remains in its infancy and will need clear and consistent policy, regulation and investment in skills, research and development to support the continued momentum. #Electricvehicle #Electrification #Supplychain #Battery

Important call from Industry for EU leadership on staying the course on their zero-emission target for 2035. When policymakers move the goal posts it creates huge uncertainty for investment from industry, investors and the public sector. When we look further afield to the likes of China, the industry leader in the EV race, clear policy and direction leads to market share growth and dominance. It will be interesting to see where the UK sits in all of this, with a contemplated re-introduction of the 2030 deadline. Either way, industry, business, investors need leadership and consistency.

Today marks the end of an era for the UK with the closing of the coal-fired power plant in Ratcliffe-on-Soar, Nottinghamshire. There will be mixed feelings and no doubt much nostalgia from those who have worked in an industry which powered a country, an industrial evolution and an empire. Peaking in the 1980's before the shift to gas in the 1990's, renewables in the 2000's and now a future low-carbon energy mix. The extraordinary growth in renewable and more sustainable energy sources is well under way, but there remains a long way to go for this future technology mix to again power a country and deliver what is needed to support our industries, infrastructure and transportation networks. We believe that government, corporations, public bodies and investors all have a role to play to help contribute toward an acceleration toward Net Zero. With a well calibrated strategy, structure and an experienced team to help advise and deliver new infrastructure - the opportunity is as commercially attractive as it is strategically important to stay ahead competitively. Kylemore Advise - Structure - Deliver #Netzero, #Kylemorecapital, #Electrification, #Transportation, #BuiltEnvironment, #Infrastructure, #Renewables, #Batteries