Paul Rodden • Season: 2023 • Episode: 248
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In episode 248, ZeroAvia gets some big financial backing and a thought piece on Appalachian hydrogen hubs gets my attention. I'll go over all of this on today's hydrogen podcast.
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ZeroAvia gets some big financial backing and a thought piece on Appalachian hydrogen hubs gets my attention. I'll go over 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 cap. 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.
First off today on a press release in September 18 Airbus, Barclays Sustainable Impact Capital and NEOM co lead ZeroAvia's latest financing round zero avian announced the Airbus Barclays sustainable impact capital and NEOM have co led the company's latest financing round. Breakthrough Energy Ventures, Horizons Ventures, Alaska Airlines, Ecosystem Integrity Fund, Summa Equity, AP Ventures and Amazon Climate Pledge Fund have also participated in the investment. This investment will enable ZeroAvia to accelerate progress towards certification of its first engine as well as delivering the company's mission of a hydrogen electric engine and every aircraft. In conjunction with the investment Airbus in ZeroAvia have agreed to collaborate on certification approaches for hydrogen power systems.
The company is also intend to work together on a number of critical technical areas, including liquid hydrogen fuel storage, flight and ground testing of fuel cell propulsion systems and development of hydrogen refueling infrastructure and operations. ZeroAvia is pursuing hydrogen electric propulsion systems as the most environmentally friendly and economically attractive solution to aviation's growing climate change impact. The company's hydrogen electric engines use hydrogen and fuel cells to generate electricity, which is then used to power electric motors to turn the aircraft propellers with The only byproduct during flight being water. Airbus is a global leader in fostering alternative propulsion using hydrogen fuel cell systems are an important part of it zero aircraft concepts program designed to deliver low carbon emission airframes of various sizes. The industry major has recently ground tested a hydrogen engine concept at 1.2 megawatts of power. The investment will support ZeroAvia has continued growth and technology development, most notably progressing its first product the ZA600. Through to certification. ZeroAvia a recently completed the first stage of flight testing of the prototype za 600 and is moving to complete design work ahead of certification, targeting 2025 entry and service to support up to 20 seat aircraft.
The funding will also enables ZeroAvia to continue to progress it's larger engine program the za 2000 a two to 5.4 megawatt modular powertrain designed to support larger commercial aircraft applications. The company is working on retrofitting a dash eight 476 seat testbed demonstrator provided by Alaska Airlines with a view to first flight testing with a full size engine in 2024. The investment will help ZeroAvia extend the leadership and has established across core in house technologies for multi megawatt class hydrogen electric engines, including high temperature pem fuel cells, advance electric motors and power electronics and onboard liquid hydrogen fuel storage. Okay, so great news for ZeroAvia on this last financing round, and it seems to be the aviation companies focused in hydrogen have been in the news quite a bit more lately. And that's something I'm very glad to see. Now, as I noted in my last podcast, I'll be chairing the demand session at the Reuters hydrogen North America's conference in Houston next month, I will also be moderating a panel on hydrogen and aviation. ZeroAvia will be on the panel along with Universal Hydrogen, and Solairus Aviation.
The work all of these companies are doing to advance hydrogen and aviation is praiseworthy, and obviously larger organizations are taking notice and devoting large amounts of capital to them. But I will also say this, the vast majority of people I speak with are on the supply or financing side of hydrogen. And it's been refreshing an eye opening to have conversations with those representing the demand side of the economy and hear what they're saying about hydrogen supply. And so I'm going to say this to anyone on the supply side or the financing sector. If you have the ability to get here in Houston, I highly recommend attending this conference. It will be well worth your time. Next in an article published on September 19, Reid Frazier of the Allegheny Front writes groups say clean hydrogen projects lack transparency and fear climate and safety impacts. Reid writes hydrogen is considered a potential source of clean energy as the world steers away from burning hydrocarbons, the main cause of global warming.
But a growing number of organizations in western Pennsylvania say they're worried about proposals for a so called hydrogen hub in the region, where network of companies would produce process and use hydrogen. They say the public has been kept in the dark about projects and are worried about what impacts they'll have on local communities. Two proposed hubs based in western Pennsylvania, the Appalachian Regional clean hydrogen hub or Arch2 and the Decarbonization Network of Appalachia or DNA are among over 20 vying for federal hydrogen funding. The Appalachian hubs would produce blue hydrogen where the element is stripped out of natural gas and carbon dioxide produced in the process gets injected underground, instead of being released in the atmosphere. Others have proposed using renewables to create hydrogen out of water known as green hydrogen, or the same process using nuclear energy known as pink hydrogen. President Biden's bipartisan infrastructure law included $7 billion dollars to fund it six to 10 Hydrogen hubs around the country, the law mandated the two of the hubs be located in a region with large natural gas resources, but Reid writes what is involved in building the projects? Where will they be sited? How many jobs will go to local populations, what will be the environmental impacts all of that has been kept secret by the Department of Energy, which is reviewing the applications.
And a quote from Tom Torres, hydrogen campaign coordinator for the Ohio River Valley Institute says the applicants have completely cut out the public and impacted community members from any decisions regarding their operations and plans and infrastructure, footprints and policymakers have done little to hold them accountable for that. Unfortunately, even at this point, there's very little information about either of the specific hubs and what their impacts could be. The Arch2 consortium required community groups to sign a nondisclosure agreement to see details of the proposal. This according to a report and the inside climate news, and a statement the Department of Energy said clean hydrogen would play a critical role in President Biden's vision of a clean energy future. The agency said it has put in place mandates that the hub's applying for federal funds include a community benefits plan describing how the groups will interact with community and labor groups and meet the administration's workforce diversity and environmental justice goals, and also said it will, quote support successful applicants and host communities and ongoing community engagement, including as reflected in the community benefits plans throughout the full project scope.
Arch2 did not respond to requests for comment. A spokesperson for the other applicant, the DNA did not comment by press time. And so what about fracking risks and the skepticism about climate claims? While a few details are known about the proposals, they've attracted big oil and gas companies like Shell and EQT. Torres worries about what continued extraction could mean for the region. He says the method of hydrogen production involves a significant amount of hydrocarbons. And so they'll be using hydrogen from fracking which comes with a lot of associated risks to public health and to the environment. A recent state funded study found links between fracking an asthma and childhood lymphoma in western Pennsylvania. Other studies have shown links to childhood leukemia, low birth weight, and premature death and the elderly among other health effects.
Environmentalists are also skeptical about Blue hydrogens climate benefits, because they say companies haven't yet shown they can capture co2 from hydrogen production at sufficient rates. And a quote from David Schlissel, director of Resource Planning Analysis at the Institute for Energy Economics and Financial Analysis said, we don't think these climate claims by industry that they'll be able to capture 95% or more of the carbon dioxide from a hydrogen production facility are realistic. He also says studying the technology is a good idea and doing some larger size tests, where they capture more of the co2 over time is a good idea. But running off and implementing it and giving 10s of billions of dollars to project developers is asking for trouble. And there are concerns that these mega projects which will cost 10s of billions of dollars simply won't make financial sense and will fail to fulfill their economic promise. And a quote from Sean O'Leary with the Ohio River Valley Institute.
It could become the next act and that ongoing distraction of local policy and local state policymakers from doing work that actually can have a positive impact in terms of jobs and incomes. The Institute is a policy think tank that advocates for the region to shift away from hydrocarbons as a basis for the economy. O'Leary has produced reports analyzing jobs, income and population data to argue that natural gas industry has failed to live up to his economic promises and In the region, O'Leary thinks that in some industries like steel and cement, hydrogen may be the only good strategy to address climate change, but he wants to see more green hydrogen, which is made using renewable energy. Okay, so some engaging thoughts on the hub opportunities in Appalachia. Now before I get too far into this... I want you to know that I don't plan on discussing the pros and cons of fracking. That's a debate for a different forum.
What I can address are the hydrogen concerns listed in this thought piece, it would seem that the author's primary concern is utilizing natural gas as the feedstock and raises the issues around carbon capture, utilization and storage. Now, Appalachians, oil and gas is a different beast than what you might find in other oil and gas regions in the US, such as maybe the Permian, the Bakken, and the Gulf Coast, the terrain is difficult to navigate, as well as is the political spectrum. But with that said, the Marcellus and the Utica pay zones are great sources of natural gas, and the region has a long history of getting that gas out of the ground. But what about storing the co2 After capturing it. Salt Dome storage is plentiful along the Gulf Coast, but could prove an economic in the northeast, that's definitely a concern.
But what about the lack of transparency in these projects and their economic impact they can have in whatever region they choose, if they are chosen to receive funding, I believe site selection will follow the funding announcement and will involve a good bit of prospecting, to determine the prime location, so I wouldn't expect to have that information available. And so without the location really nailed down, it would be hard to fully estimate the economic impact of the project. Now, that's not to discount Reid's concerns. The Appalachian region has a long history battling energy companies. So their skepticism has been fully baked in.
But I will say this, use this opportunity to leverage your history and knowledge of legacy energy systems to help advance the hydrogen economy. It's okay to be skeptical, but don't make perfect the enemy of good. This is going to take time to build out and your involvement at the local level could help make that area into the clean energy hub the Northeastern US has been needing for some time.
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, podcast, 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 email@example.com. So until next time, keep your eyes up and honor one another.
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.