Paul Rodden • Season: 2023 • Episode: 241
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In episode 241, A monumental breakthrough in leveraging nuclear energy for clean hydrogen and aluminum is moving forward. I'll go through the article and give my thoughts on today's hydrogen podcast.
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A monumental breakthrough in leveraging nuclear energy for clean hydrogen and aluminum is moving forward. I'll go through the article and give my thoughts 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's 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 oil price.com James Stafford writes, tech breakthrough makes two and a half trillion dollar hydrogen boom possible. The US government has announced a proposed $7 billion for starters, on desperately needed breakthroughs in clean hydrogen production. The Department of Energy's biggest bet is on nuclear power plants, which they're hoping to convert into North America's premier clean hydrogen producers. Those billions of dollars are being poured into technological innovation, lowering costs and scaling up the production of clean hydrogen, including those through the use of nuclear power plants in New York, Ohio, Minnesota and Arizona. For now, the majority of hydrogen in the United States is produced by natural gas reforming in large central plants, an important step in the energy transition. The end goal, however, is to produce hydrogen without creating carbon emissions. And that's what the federal government's $7 billion spin is all about. At four nuclear plants across the country, scientists are trying to perfect a process called electrolysis to create pure clean hydrogen. The process involves splitting water into pure hydrogen and oxygen using high temperature electrolyzers.
For now, however, the process prohibitively expensive and energy intensive that can make this recent breakthrough all the more significant GH power has developed a unique renewable energy technology that uses exothermic reactions to create three highly sought after green outputs hydrogen, aluminum, which is aluminum oxide, and exothermic heat killing three birds with one high tech stone. The hydrogen produced by the modular version of GH power's two megawatt reactor is pure and clean with zero emissions, zero carbon and zero waste using only two inputs, recycled aluminum and water. GH power has been developing the new type of reaction for hydrogen production over the past seven years. And now it's gearing up to flip the switch on the first commercial reactor of its kind in Hamilton, Ontario, Canada. Flipping a switch on this new reactor comes at a critical juncture in the global energy transition. The hydrogen Council estimates that hydrogen represent 18% of all energy delivered to end users by 2050, avoiding six gigatons of carbon emissions annually and turning around and approximately two and a half trillion dollars in annual sales, not to mention creating 30 million jobs globally. GH powers reactor is self sustaining zero emission and is a net producer of energy for consumption. It's 100%, clean and modular, which means it can be assembled on site to power North America's industries for the first time with clean energy and cost competitive with conventional hydrocarbons. It also produces green hydrogen exothermic heat as well as highly valuable green aluminum, which has numerous commercial applications use for everything from lithium ion batteries and LED lighting to semiconductor production.
GH power is planning to develop a plant which produces 11,700 tons of green hydrogen per year to fuel 30 megawatt combined cycle plant with a net output of 27 megawatts. For now, the DOE puts the cost of producing hydrogen from renewable energy at about $5 A kilogram which is about three times higher than the price of producing hydrogen from natural gas. The DOE's goal is to see clean hydrogen production costs declined by 80% to $1 a kilogram in a decade. By the company's estimates, GH powers reactor is already 60% cheaper than producing hydrogen by electrolysis, and it's a net producer of electricity to the grid. It's green alumina co product production costs are also over 85% cheaper than the most commonly used process currently used for alumina production that rely on hydrochloric acid leaching and hydrolysis for alumina production. This can be a game changer in the decarbonisation of the critical sector. Finally, GH power's base 27 megawatt net output plant design is forecast to produce a carbon offset of 1.2 million tonnes annually, which is based on displacing a coal fired plant of the same size.
The company has also had successful tests using scrap steel or iron as another metal fuel for hydrogen generation, the use of recycled metals provides a scalable solution with a much lower cost basis at under $1. A kilogram of hydrogen scrap iron is the most widely available metal fuel in most markets. Not only is this a cost breakthrough, but it is a proprietary technology that embraces the idea of a circular economy with zero emissions. The process uses recycled scrap aluminum as the key input. That aluminum is then mixed with water through a proprietary reactor designed to continuously operate to produce hydrogen, aluminum and exothermic Heat or power with zero emissions. Scrap or recycled aluminum is widely available in almost every market and can be found for as little as $1.50 A kilogram. It's a new technology that can run full cycle from using recycled materials to help other companies, organizations and industries meet their own net zero commitments.
And it's all modular and brings the energy to within the last mile of the energy user. For hydrogen, it can be a huge competitive advantage to be able to build a plant right where it's needed. Without massive hydrogen storage facilities and without transportation needs. GH power and its team of engineers have already completed phase one testing of their two megawatt reactor in Hamilton, Ontario, and phase two testing began on June 30. And the next step is to move into commercial operations and 24 hour continuous operations. revenue generation is forecast to begin in the fourth quarter. And then the future is all about scaling up from two megawatt reactors to a 27 megawatt net output power solution. The scaled up 27 net output megawatt version of this reactor planned for the near future will produce the same green outputs, which can be blended with natural gas and a turbine. This could allow GH power solution to integrate with existing natural gas power plants and allow companies to utilize existing assets while making a serious reduction in co2 emissions. The world needs 520 million tons of hydrogen to achieve Net Zero targets by 2050.
This according to the IEA. Given the current state of advancement with electrolysis for producing hydrogen and the associated costs, we won't make that goal without alternative breakthroughs such as GH power. And because this new reactor aims to produce three green outputs, the contributions to zero emissions goals should be compounded far beyond the individual numbers. This award winning technology is the result of seven years of painstaking research by world class scientists and engineers led by GH power CEO Dave White, a veteran engineer in the power generation space combined, the GH Power team has well over a century of power generation experience in the design, build and operation of power plants, refineries and other energy infrastructure.
Chief Engineer Ken Stewart has been designing and managing thermal power plant and petrochemical processes for over four decades and across eight different power plants in North America. COO Gary Grahn brings to the table 25 years of international energy experience including in oil, gas, minerals, metals, and utilities and CFO Anand Patel contributes a decade of real asset capital markets experience with over $4 billion in completed transactions, including for renewable energy giant Brookfield Asset Management. Finally, Project Development Director Mike Miller offers more than 35 years of experience in infrastructure, private equity and development for top companies along the energy supply chain such as giant NextEra Energy. GH power has been working closely with Carleton University and is the recipient of a $2.2 million grant from a joint German Canadian government program as part of Canada's alliance with Germany to bolster its hydrogen strategy.
It's a feather in Canada's cap as the country seeks to become a top global supplier of clean hydrogen with a transatlantic supply chain. The idea itself is in line with what world renowned physicist Neil deGrasse Tyson calls the cosmic perspective. Large scale green hydrogen projects in existence today are only as clean as the energy required to produce them, and only as plausible as the cost required to get to the end game. And a quote from Dave White GH power CEO. The only practical solution for society to reduce carbon emissions is to transition from 100% hydrocarbon fuels to cleaner tech. And one of the steps in tackling this is to blend cost competitive green hydrogen with hydrocarbons and ramp up the hydrogen content whenever possible. Okay, so a great article detailing a new advancement in nuclear powered electrolytic hydrogen. Now I've never kept it a secret how much I liked the pursuit of leveraging nuclear power to develop hydrogen. We've also heard of a few breakthroughs using aluminum to generate hydrogen. This seems to be the break-through technology that's been needed to drive the electrolytic hydrogen market.
Obviously, no cost figures are going to be released at this time, since they're still in preliminary trials. But according to their corporate deck, the CapEx for the one megawatt demo plant was $9 million, with an IRR of 60 plus percent and a payback of 1.8 years. Those are quite good numbers. But based on the demo figures, GH power is estimating that for the full 27 megawatt facility, that will consist of a CapEx of around $100 million, an IRR of 55%, and a payback of a year and a half, let that sink in. Those are great numbers. Now only time will tell if they'll be able to hit these figures. But the leadership looks solid. And their methodologies of integrating this technology with existing infrastructure to me is spot on. And so I say Keep up the good work, GH power, I cannot wait to see this company grow.
Alright, that's it for me, everyone. If you have a second, I would really appreciate it. If you could leave a good review on whatever platform it is that you listen to Apple podcasts, Spotify, Google, YouTube, whatever it is, that will be a tremendous help to the show. And as always, if you ever have any feedback, you're welcome to email me directly at firstname.lastname@example.org. So until next time, keep your eyes up and honor one another.
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