Alternative Energy Solutions
The trend of Alternative Energy Solutions encompasses the variety of technologies and related infrastructure which harness, store, and use energy from renewable, inexhaustible sources. In this trend, conventional fossil energy systems are abandoned and replaced by those relying on sunlight, wind, water, geothermal, biomass, and other sources.
Global warming affects people and businesses, across industries and countries, and is exacerbated by the burning of fossil fuels. The electricity generated from coal-fired power plants, as well as total global emissions, reached an alarming peak in 2021 so CO2-heavy industries such as logistics must develop, invest in, and use alternative energy sources. Progress is being made – in the same year, wind and solar energy accounted for 10% of total global electricity, and all power from sustainable sources reached 38%. However, there is still great potential for industry in particular to advance and implement alternative energy solutions to lead the way towards a future of clean energy.
There is common understanding across the logistics industry that alternative energy solutions are needed to ultimately reduce CO2 emissions to zero. However, existing solutions are not yet available in the quantities required or are significantly more expensive than conventional, non-renewable solutions. Therefore, in order to implement the UN roadmap for clean energy and reduce the share of fossil fuels in the global energy mix to 30% by 2030, high investments in the development and application of alternative energy solutions are required.
The number of battery-powered electric vehicles globally increased almost tenfold from 1.2 to 11.3 million between 2016 and 2021.
Relevance to the Future of Logistics
- Energy Supply for Buildings & Facilities
- Ground Transportation
- Air Transportation
- Water Transportation
- Energy Harvesting for Sensors
As of November 2021, mandatory energy codes for residential and non-residential buildings are part of 43 countries' agenda for more energy-efficient buildings, so the trend towards alternative energy solutions is important for all facilities including those in logistics.
One popular solution is solar panels for offices, warehouses, distribution centers, and parking lots. Current models offer 16-20% efficiency but the US National Renewable Energy Laboratory has been able to produce solar cells with efficiencies close to 40%.
On-site energy storage is a challenge for companies using solar panels or wind power solutions for their facilities and buildings, but so-called gravity batteries like those from the British company Gravitricity offer an innovative solution. When there is a surplus of green energy, gravity serves as a storage device by pulling a weight upwards via electric motors and, as soon as demand increases, for example at night, this weight can be lowered to release the stored energy.
Geothermal energy provides another way to power logistics facilities and office buildings. While the principle is not new, companies like Fervo Energy, a start-up funded by Bill Gates’ Breakthrough Energy Ventures, use new technological solutions such as horizontal drilling, fiber-optic sensing, computer modelling, and analytics to make geothermal energy more cost effective. Large office buildings such as Boston University’s new Center for Computing and Data Sciences and the Google Bay View Campus use geothermal energy to reduce the CO2 footprint; these examples prove feasibility for large logistics buildings such as warehouses.
Clearly, various available solutions can be applied to logistics facilities but these typically require initial investment with a positive economic impact only after a few years.
The Alternative Energy Solutions trend has been a high priority for ground transportation in the last few years and clean last-mile transportation solutions are already being used at scale. DHL in Germany, for example, has already electrified around 20,000 vehicles, a third of its delivery fleet, and uses 19,000 e-bikes and e-trikes for end customer delivery.
Car makers are now developing electrified last-mile delivery solutions; for example, Fiat's e-Ducato has a range of 280 km (174 miles) in mixed traffic.
However, it is a different situation for middle-mile and long-haul transportation. Although there are some electrification developments, these are still restricted by range limitations and insufficient charging infrastructure. Truck electrification is being driven by established companies such as Volvo, the e-mobility frontrunner Tesla, with its Semi model, and start-ups such as Nikola.
Another alternative energy solution is hydrogen for middle-mile and long-haul trucks. Next to start-ups such as UK-based Tevva and US-based Hyzon, DHL is testing VDL’s hydrogen-powered trucks in real logistics applications in the Benelux countries as part of the H2-Share initiative in collaboration with Apple. The overarching long-term goal is to scale up these low-carbon heavy-duty commercial vehicles.
Although many start-ups and established companies are active in this field, middle-mile and long-haul solution development is typically in pilot phase or will take a few more years before production sites can meet market demand at scale.
In 2021, global carbon emissions from aviation accounted for 2.5 % of total CO2 emissions, which is roughly equivalent to Germany's total CO2 emissions.
For air cargo, the use of sustainable aviation fuel (SAF) is currently the most promising solution for emissions reduction but availability and high cost are barriers to widespread adoption. SAF is fuel from renewable sources such as biomass, animal fats, oils, and, alcohol which can be blended with conventional kerosene. Initiatives like the Clean Skies for Tomorrow Coalition, led by the World Economic Forum, bring together stakeholders across the aviation industry to drive carbon-neutral flying in future, leveraging the availability and use of SAF.
DHL Express announced two of the largest deals related to SAF in 2022. Its cooperation with bp and Neste will secure 800 million liters (211 million gallons) of SAF for DHL Express by 2026 and further advance DHL's sustainability strategy.
In addition to SAF, electric engines will also be an attractive propulsion method for air freight transportation of the future. The Alice electric aircraft from the Israeli start-up Eviation, scheduled for market launch in 2024, can be used for short-haul domestic flights and is likely to become a viable sustainable solution for national and even regional air transportation. Therefore, DHL Express has ordered twelve airplanes with a range of 815 km (506 mi) to kick-off the electrification of its fleet.
Another area of sustainable aviation research is the use of hydrogen fuel. Start-ups like H2FLY and ZeroAvia are working on promising concepts but experts do not expect commercial application of sub-regional and regional hydrogen fuel cell aircraft before 2030.
Many developments are underway to enable sustainable aviation but they are associated with high research and development (R&D) investments and infrastructure costs. While progress is being made, especially with SAF, fully sustainable aviation remains a long way off.
Research into alternative energy solutions for ocean freight is driven by new regulations such as those of the International Maritime Organization (IMO), which has pledged to reduce carbon emissions by at least 40% by 2030 compared with 2008 levels.
One transitional option is the use of biofuel which, according to studies by the US Department of Energy and the Department of Transportation, could reduce greenhouse gas emissions by up to 93% depending on the biofuel composition. However, the production of biofuel for maritime transport currently faces economic and infrastructural obstacles.
In addition to biofuels, conceptual solutions could become game-changers in the long term, such as the Oceanbird concept from the Swedish company Wallenius Marine. This uses air as the main source of energy; the vessel has aerodynamic masts, which are conceptually based on aircraft wings, that almost eliminate the need to use conventional fossil fuels.
Another long-term solution that can play a major role in decarbonizing maritime transportation is liquid hydrogen. Currently, there are no scalable solutions for hydrogen-powered cargo ships but the example of Norway’s MF Hydra, the world’s first hydrogen-powered ferry, provides evidence and insights for future cargo ship applications.
Government and other regulations such as those from the IMO are driving the development of alternative energy solutions for ocean freight, with biofuel most likely to be used as a transitionary technology before both wind and hydrogen solutions become viable in the long term.
Alternative energy solutions are also needed for sensors in logistics, particularly for tracking and monitoring environmental influences on packaging and containers.
A major sensor problem, especially for microsensors, is battery life. One potential solution is to harvest energy from each sensor’s direct environment (from light, movement, and radio waves). The start-up Wiliot specializes in harvesting radio frequency waves from Bluetooth, Wi-Fi, and other 2.4-GHz connectivity technologies via its stamp-sized Internet of Things (IoT) device.
Another sensor solution has been developed by researchers at the University of Massachusetts. Called the Air-gen, it uses a natural protein that produces electricity from ambient humidity and is expected to find future application in wearable electronic devices such as health monitors, smartwatches, and cell phones.
Further developments in the field of energy harvesting sensor technology are likely to bring additional and above all scalable solutions to solve problems in the field of energy supply for small electronic devices and sensors.
Some alternative energy solutions are already available but many industry-revolutionary technologies are still in pilot phase and not yet scalable. However, with sufficient market demand, rapid development is achievable as the example of e-mobility in ground transportation shows. Investment in R&D and infrastructure, as well as corporate commitment to new solutions, will be crucial to achieving timely sustainability solutions.
Need support prioritizing high impact trends for your business?
Request a complimentary Trend Radar Mapping session at your regional DHL Innovation Center and prepare for the future today.Request a Session
- Ember (2022): Global Electricity Review 2022
- UN (2021): Proposed global roadmap shows how universal access to sustainable energy can be achieved by 2030
- Global Alliance for Buildings & Construction (2021): 2021 Global status report for buildings and construction
- U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) (2022): NREL creates highest efficiency 1-sun solar cell
- McKinsey (2022): DHL on sustainable, customer-centric delivery in the last mile
- Global Change Data Lab (2020): Climate achange and flying: what share of global CO2 emissions come from aviation?
- American Chemical Society Publications (2022): Biofuel options for marine applications: technoeconomic and life-cycle analyses
- Argonne National Laboratory (ANL) (2021): Biofuels offer a cost-effective way to lower shipping emissions