With countries all over the world pledging to reduce emissions, “Hydrogen would be necessary for the world's largest emitters – the US, China, and Europe – to achieve net-zero climate targets by 2050 - 2060 by decarbonizing hard to abate industries,” says Energy Global. Even better, analysts at Goldman Sachs love the hydrogen story, believing hydrogen could be an $12 trillion market by 2030. In addition, the International Energy Agency says the world still needs an investment of $1.2 trillion by 2030 to meet global net zero emission goals. All could be solid catalysts for Jericho Energy Ventures (TSXV:JEV)(OTC:JROOF), Plug Power (NASDAQ:PLUG), Ballard Power (NASDAQ:BLDP)(TSX:BLDP), Bloom Energy (NYSE:BE), and FuelCell Energy (NASDAQ:FCEL).
Look at Jericho Energy Ventures (TSXV:JEV)(OTC:JROOF) for example.
Jericho Energy Ventures just announced it has led a Seed Series fundraising round for Supercritical Solutions, Ltd., a Company focused on developing its new class of water electrolyzer for the production of low-cost clean hydrogen. Jericho’s USD$1.78 million lead investment is joined by Chris Sacca’s Lowercarbon Capital and New Energy Technology for a total commitment of USD$3.6 million, which Supercritical intends to use to support ongoing development of its disruptive electrolyzer technology. Existing investors include global mining company Anglo American and Deep Science Ventures.
An underappreciated and fundamental flaw in electrolyzer design is the inability to output hydrogen at the pressures required for storage, transportation, and most end-use-cases. This is due to a number of factors, including the sensitivity of most electrolyzers’ membranes to high pressures. As a result, expensive and maintenance-intensive compressors are required to be co-located with almost all electrolyzers, increasing the true cost and complexity of clean hydrogen.
Supercritical has developed a new class of electrolyzer who’s proprietary membraneless design enables it to exploit the benefits of supercritical water, outputting gases at over 200 bar of pressure. This delivers a step-change in efficiency for the production of hydrogen and eliminates expensive hydrogen compressors in most applications. Supercritical’s technology takes direct aim at decarbonizing industrial H2 use cases – already a $120 billion market today. H2 for use in ammonia production and hydrocarbon refining requires pressures of 70-230 bar, with most gaseous storage applications ranging from 350-700 bar.
Big Picture
Hydrogen is a required molecule for our global Net Zero ambition – that’s why over 70 Countries have outlined Hydrogen Roadmaps for their decarbonization goals to utilize hydrogen as a fuel, feedstock, and store of energy. Bank of America1 estimates that hydrogen could inhabit 24% of total global energy needs by 2050, creating as much as $11 trillion in investment opportunities over the next few decades.
Clean hydrogen is produced by splitting water (H2O) via renewable supplies of electricity in an electrolyzer. While the market for hydrogen is expected to grow 8x by 2050, with <1% of hydrogen production currently “clean,” electrolyzer markets have the capacity to grow 800x, based only on replacing the current carbon emitting hydrogen production used in industrial applications (e.g., ammonia and refining). Increasing applications to include heating gas, biofuels or in mobile or stationary power drives a further potential growth 1000x-4000x larger than current demand, according to a November 2021 report by Jefferies Equity Research2. Current industrial hydrogen demand equates to 550-1800GW of electrolysis while global total electrolyzer capacity is estimated at only 3GW today.
Why is this technology disruptive to the Hydrogen ecosystem?
Today’s electrolyzers largely use a traditional membrane-based architecture and output hydrogen in the 10-40 bar pressure range. However, the set of applications for low-pressure hydrogen is limited. Almost every hydrogen storage, transportation, or application modality requires expensive multi-stage gaseous compression which can represent $1-1.50 / kg or upwards of 25% of the delivered cost of clean hydrogen. For example, in the generation of ammonia (NH3), a $70 billion market representing 55% of today’s hydrogen utilization, 200 bar pressure hydrogen is required at the input of the Haber- Bosch conversion process. Similar 200-250 bar pressures are seen throughout industry, and 300-700 bar pressures are common in storage and transportation applications.
Takeaway: Due to its low volumetric density (read: it takes up a lot of space), the storage, transportation, and utilization of hydrogen are nearly universally combined with compression for higher pressures. Fully eliminating or significantly reducing the need for costly and fault prone gaseous compression is critical to achieving the lowest cost of pressurized clean hydrogen for most applicable use cases.
Supercritical’s electrolyzer is the only technology to solve this.
How does the technology actually work?
Supercritical’s unique electrolyzer design is able to tolerate and exploit the benefits of electrolysis of water under thermodynamic supercritical conditions – that is, water at high temperature and pressure. Importantly, the bonds between the hydrogen and oxygen atoms of water are weakened and as such require less electrical energy (i.e., lower cost) to split the bonds and free hydrogen atoms. This is important because 70-80% of the levelized cost of generated hydrogen is operating expenses, primarily driven by the cost of electricity.
The challenge traditional electrolyzers face, operating at supercritical conditions, is that their membranes or diaphragms would disintegrate, and their physical structure would fail under these relatively high pressures and temperatures, resulting in failure of the electrolyzer.
Takeaway: Supercritical’s innovative design enables the pressurization and heating of the feed water, the performance of electrolysis with reduced electrical energy, while separating the gases and recovering both the oxygen and hydrogen at high pressure.
Supercritical has already won multiple government grants and accolades with participating partners including the UK Governments Green Distilleries Program with Beam Suntory for USD$3.97 million, OZ Minerals Experiment “Hydrogen Hypothesis” finalist, “Top 50 to watch for climate action” (Cleantech Group), Top5 Zero Emission Solution to watch in 2022 (StartUS Insights) and Runner-up and People’s Choice in Shell’s 2021 New Energy Challenge.
Quote
“Jericho Energy Ventures provides a unique opportunity for retail investors to gain exposure to and support innovative, early-stage companies that are on the leading edge of the energy transition. Our emphasis on high-growth hydrogen related themes with a global reach makes sustainable investing simple for every investor,” said Ryan Breen, Head of Corporate Strategy at Jericho Energy Ventures.
“We are thrilled to lead the Seed fundraising round for Supercritical Solutions and believe the company’s new class of electrolyzer has the potential to disrupt the large incumbent industrial hydrogen market, in addition to the exponential opportunity associated with increasing global clean hydrogen production. The blend of world-class co-investors, seasoned management team and first-of-its-kind technology at Supercritical provides a rare investment opportunity that we look forward to supporting and growing.”
Other related developments from around the markets include:
Edison Motors, a leading Korean electric car manufacturer, announced that the company signed an agreement with NY-based Plug Power, a leading provider of turnkey hydrogen solutions for the global green hydrogen economy, to develop and bring to market a hydrogen fuel cell-powered electric city bus. Plug Power’s 125kW ProGen fuel cell engine will provide power to Edison Motors’ electric bus platform. The companies expect to have a fuel cell electric bus prototype completed by the second half of 2022 and be prepared to launch a mass-market platform by the first half of 2023. “The fuel cell electric city bus project is just the beginning of strategic cooperation between Edison Motors, and Plug Power,” said Chairman Young-kwon Kang of Edison Motors. “In the future, we hope to partner on other mobility applications including trucks, vessels, drones, and PAVs. We believe that our combined technology and know-how in electric buses will position us to sell fuel cell-powered electric buses not only in Korea but also in other overseas markets.”
Ballard Power announced orders for 31 modules, totaling 3 MW of hydrogen fuel cell power, to a leading global construction, electric power, and off-road equipment manufacturer for testing and deployment in a variety of end-use applications. The modules are expected to be delivered in 2022 and 2023 to match planned integration, testing, and deployment schedules. “We are thrilled to be partnering with this important strategic account where we are able to offer Ballard’s portfolio of leading fuel cell engines across a variety of off-road and stationary power applications,” stated Randy MacEwen, Ballard’s President & CEO. “We see significant leverage in our business model where we use the same core competencies, the same core fuel cell technology, and, in some cases, the same fuel cell engines across different business verticals and geographic markets.”
Bloom Energy announced the appointment of Rick Beuttel as vice president, hydrogen business. In this newly created role, Beuttel will spearhead the company’s commercial hydrogen strategy and will forge key partnerships to advance and scale Bloom’s efforts to enable the global hydrogen economy. Beuttel brings over three decades of experience in business development in the energy and industrial sectors, including extensive work deploying and scaling hydrogen projects across international markets. Beuttel will help define Bloom’s market strategy, serve as an evangelist for emerging hydrogen solutions, and develop relationships with industry leaders to continue momentum around Bloom’s hydrogen technology. Following the launch of its solid oxide, high temperature electrolyzer in July 2021, Bloom Energy collaborated with organizations across the energy sector to accelerate the global hydrogen economy, including projects to produce low-cost, green hydrogen and blend hydrogen into natural gas networks.
FuelCell Energy, a global leader in decarbonizing power and producing hydrogen, with a purpose of utilizing its proprietary, state-of-the-art fuel cell platforms to enable a world empowered by clean energy—announced the completion of site construction and commencement of conditional commercial operation of its 7.4 megawatt SureSource™ fuel cell project located in Yaphank, Long Island, in New York. “We are excited to be in commercial operation of our fuel cell platform in the Town of Brookhaven, New York,” commented Jason Few, President and Chief Executive Officer, FuelCell Energy. “We are executing on our promise to enable electrical resiliency and to deliver needed clean base load power to central Long Island, while reducing above ground risk associated with long distance high voltage transmission lines. Utilizing three of our fuel cell platforms, we will deliver to the grid 24/7 power that is enough to power approximately 7,500 homes from a footprint slightly larger than a couple of tennis courts.”
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