Does this technology make economic sense?
October 14, 2022
"Does this carbon removal method make economic sense?" It can be a scary question. Answering it requires Math. And if the answer is "no" you might not like it.
But this is a key question for anyone running a carbon removal startup. And you need to be asking this question too if you’re taking a job at a startup, investing, or buying carbon credits.
Grant Faber loves this part of the carbon removal puzzle. That's why it's great to talk with him about this daunting topic. Cost-accounting is his jam, and specifically the Techno-Economic Assessment (TEA). I caught up with Grant to talk about his passion for TEA, you can watch the chat here on YouTube, 28 minutes.
Here’s my takeaways
- Who cares about techno-economic assessment?
- Looking for a job? Pick a company with good TEA so the company stays in business
- Buying carbon credits? Pick a company with good TEA so you get carbon delivered
- Investing? Pick a company with good TEA so you make money
- Getting up to speed with the industry? Learn about TEA so you can put the overwhelming number of new startups in perspective
- For startups
- Cost-accounting at the idea stage is crucial (though this isn’t a formal TEA)
- As you start wanting to attract investors and funders, formal TEA is key
- Compare a new process to existing processe
- We still have some teams blow up in Launchpad because they didn't do the cost accounting or carbon accounting properly. Yes, it's a daunting process but you would rather know now rather than later. Would love to see more teams get the done early.
- What is Techno-Economic assessment, exactly?
- Does this Technology make Economic sense?
- Make a model to assess costs upfront and over time
- Imagine a pie-chart breakdown of costs, how those slices contribute to unit costs
- Cost curves over time as we scale & what markets could be open to you
- Direct Air capture process
- Equipment, machines, pipelines and storage for gas
- Materials, chemical sorbents, water
- Energy use & cost
- Labor and staffing
- Grant’s journey to being hooked with TEA
- Started as an undergrad in finance
- Led helping his school commit to renewable energy, modeling the cost assessment was key to the campaign
- That's what got him hooked. Got more curious from there, joined AirMiners, evolved
I really liked the ending section with Grant about how he got into this. It shows how iterative and curiosity driven our career paths really are. I recommend this section so I’m linking it directly here, starting at 20 minutes in. To get help with understanding techno-economic assessment, Grant’s website is here.
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