November 28, 2022 • Paul Rodden • Season: 2022 • Episode: 167
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In episode 167, A new hydrogen technology startup in northern England could be an absolute game changer for hydrogen production. I’ll be highlighting them on today’s hydrogen podcast.
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A new hydrogen technology startup in northern England could be an absolute game changer for hydrogen production. I’ll be highlighting them 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 that 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.
In an article in the Financial Times, Sylvia Pfeifer writes, startup aims to make zero emission hydrogen a commercial reality. Hydrogen has been proclaimed as the fuel of the future for much of the past five decades. detractors have even suggested it’s time may never come as he remains expensive to produce and tricky to transport. Yet, interest and investment in low carbon hydrogen has surged in the past few years, as governments strive to reduce greenhouse gas emissions to meet ambitious net zero emission targets. And the energy crisis following the conflict in Ukraine has only accelerated efforts to bring hydrogen into the mainstream. HiiROC. A startup in whole northern England with just 60 employees believes it could be part of the solution set up in 2019 by Tim Davies, Simon Morris, and Ate Wiekamp, the company has developed technology that it says will produce low cost zero emission hydrogen from micro to industrial scale, the gases produced at the point of use, thereby avoiding the cost and practical problems of storage and distribution.
The two main methods currently used to produce hydrogen involve either reacting methane with steam at high temperatures, so called steam methane reforming, or electrolyzing Water. Both, however, will continue to face challenges until the industry matures, as the former process produces large amounts of carbon dioxide while the latter requires substantial energy. And a quote from Davies HiiROC chief executive. If you look at hydrogen becoming a fuel to help the planet reach net zero, then you need another way of making it. The company says its technology which is thermal plasma electrolysis, can convert biomethane flare gas or natural gas into clean hydrogen at a cost that is comparable to steam methane reforming, but without the associated emissions. It is also cheaper than water electrolysis. Simply put, HiiROC uses a very strong electric field inside a plasma torch to rip apart methane molecules to create hydrogen and a solid byproduct called carbon black. The process results in something Davis describes as emerald hydrogen, which he says differs from turquoise hydrogen, which is created through the pyrolysis or heating an inert atmosphere of methane or other hydrocarbons. HiiROC’s process that says Davies is electrically driven, making black carbon rather than carbon dioxide and then storing the gas also makes the process distinctive.
The byproduct can be added to everyday materials such as rubber for tires, or can be used to improve soil quality. Using methane for every one kilogram of hydrogen produced HiiROC makes three kilograms of carbon black. Davies plays down concerns that the process is based on hydrocarbons. The concept he says is for the technology to hopefully be a global solution to a global problem. hydrocarbons, he says are good fuels, and they contain a huge amount of energy. The problem is the carbon dioxide that’s produced. He says if we can find a way of decarbonizing hydrocarbons, then hydrocarbons can carry on being valuable fuels, and we use the hydrogen that comes off. Investment in low carbon hydrogen has surged in recent years, with a focus on energy security and zero commitments driving demand across different sectors.
Over the past year alone, nine governments have adopted a hydrogen strategy this according to the International Energy Agency, some 26 governments have also committed to adopt hydrogen as a clean energy source in their energy systems. This again according to the IEA However, a recent report on behalf of 45 world leaders concluded that annual investments up to $130 billion would be needed in hydrogen by 2030. To avoid catastrophic effects of climate change, and point without the investment currently stands at less than a billion dollars a year. Other significant challenges also remain including how to scale up production, especially if so called green hydrogen, which is created from the electrolysis of water using renewable energy and blue hydrogen, which has its carbon dioxide byproduct captured in a quote from Murray Douglas, head of hydrogen research at Wood Mackenzie, we are already seeing a huge amount of momentum building in both blue and green and we will see costs continue to fall. The main hurdle is far more nascent types of hydrogen such as turquoise will have to prove their commercial scale this again according to Douglas, investors, however, has started to take notice and despite this year’s market volatility have poured millions of dollars into technology startups.
One of Iraq’s closest competitors is Nebraska based monolith, which also uses plasma torch technology. The US company has attracted several big name investors in recent months, including Blackrock which helped lead a $300 million plus fundraising round. The company also received approval for a $1 billion dollar loan from the US Department of Energy to scale up production this year. Now, initially, HiiROC was self funded. While it proved its technology. The company then raised two and a half million pounds in a funding round in 2020, which was enough to build the first prototype units to show that the technology worked at the next level up from the research laboratory. This again according to Davies, HiiROC’s biggest fundraising to date, which is 28 million pounds took place in 2021 and attracted a range of investors including energy company, Centrica, cement maker Cemex, manufacturing group Melrose Industries and South Korean conglomerate Hyundai. German energy companies Wintershall Dea and VNG were among earlier backers. Davies will not disclose exact ownership details after the funding rounds but says no one owner owns more than 20% of the business including the founders individually. Every employee is also a shareholder. The money raised by HiiROC in 2021, will be used to launch a series of pilot projects with its backers next year. One is a facility in Germany with Wintershall Dea and vng they will have a nominal capacity of 400 kilograms of hydrogen per day, equivalent to an annual energy output of almost five gigawatt hours.
The companies are already in talks with potential customers for the hydrogen and about a possible location in Eastern Germany. Cimex on the other hand, is looking at the benefits of using carbon black as an additive to concrete. The group also hopes that its partnership will help cut methane emissions by increasing its hydrogen injection capacity in its cement kilns, allowing it to increase the use of alternative fuels. HiiROC which also has some non investor clients lined up plans to lease out its units in exchange for a utilization fee. Davies believes commercialization of the company’s technology could happen as soon as 2024 the company, he adds, aims to show that its technology is versatile and can be used anywhere. Given the conflict in Ukraine and the surge in natural gas prices, especially in Europe. Davies says hierarchy European and UK clients are quote, much more focused on the fact that we can use waste gas or flare gas to produce hydrogen but without carbon dioxide emissions. The war has undoubtedly galvanized interest in the alternative sources of energy. But even hydrogen executives concede that the fuel is not the answer to every industry’s carbon footprint problem. Some analysts believe hydrogen should generally be limited to intensive energy users, while renewables power less energy hungry industries. One analyst is quoted as saying at the moment, there’s a bit of a bubble around hydrogen, but it definitely has a role to play. And there’ll be a range of hydrogen technologies required for different applications along the way.
Okay, so I recently covered a little bit about HiiROC, when I was talking about Volkswagen getting into hydrogen, as this is the company that Volkswagen targeted to start producing hydrogen for them. Now I’ve said many times and in many places, hydrocarbons are a great source of energy. And Carbon Black is a phenomenal material to use for either construction or in pigments. Now, I know this company is still young, and so a lot of r&d still needs to go into getting their equipment developed to scale commercially. I can also see this technology being a huge success in the states where flare gas is still an issue. And one other thing that I’m curious about or is it the CEO says that he’s looking to install these at the point of use. So I’m wondering just how large are their systems that you can use these at the point of views? And of course, the big question still remains and won’t be answered for quite some time is just how much each system is going to cost. Alright, that’s it for me, everyone.
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