Hello and welcome to Energy Source, coming to you from London, where we are closely watching how oil markets are reacting to US-Iran tensions.
The price of Brent crude climbed on Monday to $72.50 — its highest level in more than six months as market expectations of a strike increased — before paring to $70.69 as of Tuesday morning.
The International Energy Agency’s meeting of energy ministers in Paris last week highlighted growing divisions over energy policy between the US, which wants to drill more fossil fuels, and European countries that are focusing on renewables.
Chris Wright, the US energy secretary and critic of net zero policies, said European countries had gone “off track” and ministers failed to agree a joint position following the talks.
As my colleague Ian Johnston reported, the US has repeatedly threatened to withdraw from the IEA over its analysis on net zero policies, but also does not want to cede influence to China.
Today’s newsletter looks at new research on the costs of an emerging technology that sounds more in the realms of science fiction: space-based solar power. Enjoy reading — Rachel
Space-based solar: small is beautiful
Solar panels are being laid across large parts of the world as countries make use of ever cheaper prices to harness the sun for electricity.
The technology produced about 7 per cent of the world’s electricity in 2024 and figures for last year are expected to show a further increase.
But the quest continues for non-intermittent sources of low-carbon power — and one idea gaining traction is to launch solar panels into space, where they can harvest almost constant sunlight and beam electricity back to Earth (as microwave radiation).
As with many emerging technologies, there is a debate between those who think space-based solar power is humanity’s great hope and those who believe we’d be better off pouring resources into developing traditional wind, solar and batteries for storage.
But interest has gathered pace in recent years thanks to reductions in the costs of both making and launching satellites to host the solar panels. Companies such as Space Solar, based in Oxford, England, are working on the technology as well as governments.
The latest contribution to the debate comes via a report from Frazer-Nash Consultancy, in partnership with Space Solar and Imperial College London, looking at whether it would be more viable to launch smaller projects, given the costs and technical prowess required.
The report was commissioned and published this month by the UK government, which is committed to cutting the UK’s emissions to net zero by 2050. That will require vastly more low-carbon power, though the country does not have abundant sun.
It concludes that “with the right investment and support”, small-scale space-based solar power (ie in the hundreds of megawatts rather than gigawatt range) could become “an economically competitive source of power by 2040” and help provide a pathway towards larger, more expensive systems.
The Frazer-Nash study found that small-scale solar was most effective in highly elliptical orbits, as opposed to the equatorial ones shown here:
Specifically, the report believes the technology’s levelised cost of electricity could fall to £87-£129 per megawatt hour by 2040, which it says would make it competitive with costlier low-carbon options such as nuclear power and tidal stream.
“[A] smaller-scale SBSP system [ . . . ] would have a much lower upfront cost, potentially allowing faster commercialisation and unlocking the benefits of SBSP earlier while also de-risking the later implementation of a large-scale system,” the paper says.
Frazer-Nash argues the technology could also generate export revenues for Britain, if antennas to receive energy from the space-based panels were also positioned in other parts of the world, such as Canada and Japan.
It would need to overcome many hurdles to reach that point, however — chiefly “significant public and private support”. The consultancy says the first systems could cost as much as £595 per MWh — about seven times more than current power prices. British government budgets are tight.
In Britain in particular there is also a question as to whether its inhabitants would welcome the huge antennas — potentially spanning several kilometres — needed to convert microwave radiation back into electricity.
The cost trajectory in Frazer-Nash’s report also depends on SpaceX’s planned Starship satellite launcher, which it assumes will be commercially operational by 2030.
And last year, Frazer-Nash warned that satellites were at risk of attack as well as colliding with other satellites or debris in increasingly congested space.
All those challenges sit alongside the dramatic reductions in the costs of grid-scale batteries over the past year, suggesting earthly solutions to consistent low-carbon power are not as hard to find as feared.
In the meantime, wireless electricity transmission is being explored for use on the ground, in the hope of being able to cut down on costly infrastructure — in a project launched this month by Space Solar and National Grid Electricity Distribution in Britain. (Rachel Millard)
Power Points
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One of the largest suppliers of enriched uranium fuel to US nuclear power plants has warned of a looming supply crunch.
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An email blunder exposed an apparent smuggling ring that has moved at least $90bn of Russian oil.
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A Chinese green energy tycoon warned the AI boom risks tipping millions into “energy poverty”.
Energy Source is written and edited by Jamie Smyth, Martha Muir, Alexandra White, Rachel Millard, Malcolm Moore and Ryohtaroh Satoh, with support from the FT’s global team of reporters. Reach us at [email protected] and follow us on X at @FTEnergy. Catch up on past editions of the newsletter here.
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