January 10, 2022 • Paul Rodden • Season: 2022 • Episode: 80
Welcome to The Hydrogen Podcast!
In episode 080, The German government shows new support for hydrogen. Cummins to build a huge hydrogen electrolyzer factory in China. And let’s talk hydrogen funds. All of this on today’s hydrogen podcast.
Thank you for listening and I hope you enjoy the podcast. Please feel free to email me at info@thehydrogenpodcast.com with any questions. Also, if you wouldn’t mind subscribing to my podcast using your preferred platform… I would greatly appreciate it.
Respectfully,
Paul Rodden
VISIT THE HYDROGEN PODCAST WEBSITE
https://thehydrogenpodcast.com
CHECK OUT OUR BLOG
https://thehydrogenpodcast.com/blog/
WANT TO SPONSOR THE PODCAST?
Send us an email to: info@thehydrogenpodcast.com
NEW TO HYDROGEN AND NEED A QUICK INTRODUCTION?
Start Here: The 6 Main Colors of Hydrogen
Listen Now:
>Direct Link To The Hydrogen Podcast MP3<
Transcript:
The German government shows new support for hydrogen. Cummins to build a huge hydrogen electrolyzer factory in China. And let’s talk hydrogen funds. All of this on today’s hydrogen podcast.
So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where is capital being deployed for hydrogen projects globally? And where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions will unlock the potential of hydrogen, and this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast.
On a press release on January 6, Sunfire announced German government supports industrialization of Sunfires hydrogen technologies, with 60 million euros. Electrolysis companies need to rapidly expand their manufacturing capacities to meet the fast growing demand for green hydrogen production. To prepare for serial automated production of Sunfires alkaline and SOEC electrolyzers. The company and its affiliated partners from industry and research are receiving grant funding from the federal government. Thanks to its potential for decarbonizing energy intensive industries, green hydrogen has evolved from a contentious quote new hope into a fixed building block of energy transition, it’s no surprise then that demand is rocketing for electrolyzers, which split water into hydrogen using renewable electricity. According to the plans installed capacity in the EU alone is set to rise from the current point two gigawatts to 40 gigawatts by 2030. And it is against this background that Sunfire one of the world’s leading developers and producers of electrolyzers is rapidly expanding its manufacturing capacities.
Together with partners from research and industry, the German based company is preparing its technologies for industrial production at a gigawatt scale. To this end, the Federal Ministry of Education and Research is providing a grant of 60 million euros for the LEED project h2 Giga the funding commitment will accelerate time to market of innovative high temperature electrolyzers. Under the leadership of Sunfire 15 associated partners will be receiving 33 million euros to establish manufacturing processes and optimize systems. By using off heat from industrial processes. Sunfires SOEC electrolyzers, require up to 30% less electricity from renewable energy sources than other technologies to produce a kilogram of hydrogen. According to the company’s CTO Christian von Olshausen. The new generation of our SOEC technology will be even more powerful and durable than today, we will redesign individual components to last longer, and we will simplify the design of the systems with our optimized high temperature electrolyzers.
Our industrial customers will be able to produce green hydrogen more efficiently and therefore more cost effectively. To further reduce the price of our product. We will be developing process chains for industrial series production. Sunfire is embarking on a challenging path to gigawatt scale production together with several partners the company has already been working with on various projects in the past. For example, the company will be drawing on the expertise of Xenon to help set up the pipeline for automation production. Both companies are already collaborating and making SOEC electrolyzers for the refinery of fuel producer Neste located in Rotterdam, but the development of SOEC technology is not the sole target of support.
The government is also providing funding for the industrialization of pressurized alkaline electrolyzers. Although these robust systems have already proved themselves for decades and industrial hydrogen projects, they have not yet been manufactured in series production. Sunfire and its eight associated partners have been granted a total funding of 27 million euros to transform the production of this technology to gigawatt scale. Again according to Olshausen, we will be establishing manufacturing processes and finalizing the new design of our pressurized alkaline electrolyzers. In comparison to the predecessor models, these will be yet another step forward in terms of energy consumption and longevity.
Now this will give a further boost to the process of alkaline electrolysis which is already well established and the most cost effective electrolysis technology currently available. Okay, so a good size investment from Germany into Sunfire for the ramping up of electrolyzer production. Now, we all know that economies of scale are going to be a big influence on electrolyzer cost, which is one of the biggest reasons why green hydrogen isn’t economical. And so the question now is, will the 60 million euro influx of cash from the German government be enough to significantly reduce the cost of electrolyzers. Next US based Cummins to build a one gigawatt hydrogen electrolyzer factory in China with state owned oil giant Sinopec, this in an article from recharge news. In the article, Lee Collins writes us based electrolyzer maker Cummins has formed a joint venture with Chinese state owned oil giant Sinopec to be known as Cummins Enze, which will build a one gigawatt P E M electrolyzer factory in southern China.
The $47 million plant in Foshan, Guangdong Province will initially have an annual production capacity of 500 megawatts upon completion in 2023, which will gradually be increased to one gigawatt by 2028. It is noteworthy that the new entity will produce electrolyzers with PE M technology rather than standard alkaline models. While China has a range of alkaline electrolyzer manufacturers that are able to undercut Western competitors on price, the local industry is lagging behind on the newer PE M technology, which many green hydrogen developers favor, as it is said to have superior performance when powered by the variable output from wind and solar farms. Beijing is seeking to remedy this imbalance with a national level project to help develop a competitive PEM electrolyzer that can be benchmarked against leading European manufacturers machines. The new joint venture will utilize pem technology developed in France by Hydrogenics.
An electrolyzer manufacturer acquired by Cummins in 2019. Sinopec is China’s largest oil refinery and currently produces three and a half million tons of gray hydrogen annually. This mainly coming from unabated coal for its use in refineries and petrochemical plants. Last summer, the state owned giant announced its aim to become China’s largest hydrogen energy company with a target of 1 million tons of green hydrogen, which is derived from renewable powered water electrolysis between 2021 and 2025. And just a few other key points in this article, first being that Cummins also has an existing partnership with Spanish power giant Iberdrola to build a one gigawatt plus Pem electrolyzer factory near Madrid, which is also due to begin operation in 2023, with an annual capacity of 500 megawatts again before scaling up in the years to come. And outside of Cummins, there are other big projects on the horizon, including other electrolyzer manufacturers who have also announced Giga scale factories, which include UK ITM power, which is a five gigawatt system.
Germany’s Thyssen Krupp again another five gigawatt system, Norway’s Nel a two gigawatt system, plug power, which is in conjunction with Australia’s Fortescue future Industries at one gigawatt, and Francis McPhee, also one gigawatt, now with these big projects, and other smaller announced projects all total up to just over 16 gigawatts of capacity by 2026. And there’s been a lot of doubt lately, whether or not there’ll be enough electrolyzers produced to hit those target numbers. I believe that this year 2022, we’ll see a massive influx of research and development to really drop the costs and increase the scale of production for electrolyzers. Okay, and lastly, today, I’ve been getting asked a lot of questions recently about investments.
Now, while I’m not necessarily here to give investment advice, I can help shine some light on the market, and perhaps even some certain hydrogen funds that you may be interested in looking into. Now, at first, you may have noticed that 2021 looked pretty poor for hydrogen stocks. This could be in large part due to politics around hydrogen, and that many companies put their projects on hold to see what their government subsidies could afford them. But even with investments being down project announcements in 2021, absolutely exploded. And so because of that massive ramp up and announced projects, a lot of smart money is moving to hydrogen ETFs. And right now there are three ETFs really worth looking into. Now all of these ETF’S saw a great bump in November of 2021 followed by a very rampant decline over the last six weeks. That being said, if Morgan Stanley and NASDAQ have anything to say about it this year, we’ll be looking at an $11 trillion dollar hydrogen market that is this year 2022. So the three hydrogen ETFs to look into right now. Our global x hydrogen ETF, Defiance next gen h2 ETF and Direxion Hydrogen ETF.
The global x hydrogen ETF and the Direxion Hydrogen ETF both have similar assets with global x at 28 million and Direxion at 39 million defiance. Next Gen h2 ETF on the other hand has $66 million in assets. Now both global x hydrogen and defiance next gen hydrogen both of those have 25 companies in holding with Direxion holdings at 30. Now most of the holdings across these three ETFs are going to be about the same. The difference is the percentage each company has within the portfolio. For example, the top 10 holdings in the global x begin with Bloom Energy at 12.93% followed by Plug Power Ballard power fuel cell Energy Power Cell MacFie Nell, AFC energy, Dusaan fuel cell and Series Power holdings.
However in the Defiance ETF Plug Power has the top spot at 7.99% followed by ITM, Ballard, Nell Dusaan series, SSC energy, AFC energy, Lindy and Air liquide, and lastly, the top 10. In Direxion also starts with plug power at 7.9% followed by Ballard Lindy Bloom Energy Nell, Eni, series, ITM fuel cell energy and lastly, ENEOS. So some strong similarities between the three funds. And so if you’re looking to start investing into hydrogen, but don’t necessarily want to start picking companies, these are great starts to get invested in the hydrogen market.
Alright, that’s it for me everyone. You have any questions, comments or concerns about today’s episode, come and visit me on my website at thehydrogenpodcast.com. Or you can always email me at info@thehydrogenpodcast.com. I would really love to hear from you. And as always, take care. Stay safe. I’ll talk to you later.
Hey, this is Paul. I hope you liked this podcast. If you did and want to hear more, I’d appreciate it if you would either subscribe to this channel on YouTube, or connect with your favorite platform through my website at www.thehydrogenpodcast.com. Thanks for listening. I very much appreciate it. Have a great day.
