August 09, 2021 • Paul Rodden • Season: 2021 • Episode: 36
Welcome to The Hydrogen Podcast!
In episode 036 , let’s dive a little further into the world of turquoise hydrogen. Who’s using it? And why aren’t more people talking about it? All of this on today’s hydrogen podcast.
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Transcript:
On today’s show, let’s dive a little further into the world of turquoise hydrogen. Who’s using it? And why aren’t more people talking about it? 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 that will unlock the potential of hydrogen, and this podcast will give you the answer. My name is Paul Rodden, and welcome to the hydrogen podcast.
In my previous podcast on turquoise hydrogen, I gave a brief overview on the technology and some background on Monolith. But now there are some new players in the space, and I’d like to highlight them. The company I’m talking about today is C Zero. The company is backed by Breakthrough Energy Ventures, and in February raised 11 and a half million dollars to scale up their turquoise hydrogen technology, and the background of C Zero was encapsulated in an article from greentechmedia.com. The promise of a hydrogen economy to replace hydrocarbons is commonly centered on the potential for green hydrogen generated via electrolysis of water with carbon free electricity.
But the vast majority of today’s industrial hydrogen is gray, made from natural gas via steam methane reforming, a process that emits carbon dioxide but at a low cost that electrolysis will struggle to beat over the coming decades. But natural gas can also be converted to hydrogen without the carbon emissions via another spectrum of the hydrogen palette. These include blue hydrogen, which is steam methane reforming with carbon capture and storage, or another technique, methane pyrolysis that had earned the moniker of turquoise for merging blue and green. That’s the target of C Zero. A startup that’s when the backing of venture capital investors to take its approach from lab tests to pilot plant scale. And in early February, the Santa Barbara California based company announced an 11 a half million dollar series a round led by Bill Gates founded Breakthrough Energy Ventures and an E Next venture investing arm of Italian oil company Eni.
Other investors included AP Ventures and Mitsubishi Heavy Industries. The Japanese industrial giant investing in a high profile project aimed at creating a hydrogen hub for the western US. The company has also won $3 million through two grants from the US Department of Energy and a $350,000 project with California utilities Pacific Gas and Electric and Southern California Gas to test certain elements of its pyrolysis reactor design. The new investment is meant to fund its first pilot scale production facility, this according to CEO Zack Jones. Now C Zero is competing in a field of heavyweights. Chemical giant BASF is building a turquoise hydrogen plant in partnership with a consortium of German companies and research organizations.
Australian company Hazer Group has won government backing to build a pilot plant testing its very own pyrolysis process. And US based Monolith materials, which is also an investment for Mitsubishi is producing hydrogen and carbon black for industrial uses at a plant in Nebraska. That being said C Zero differs from these competitors in a few key ways. This according to Jones. First, is its chosen method of methane pyrolysis. It’s a high temperature process to convert methane into hydrogen, and solid carbon in the presence of a catalyst. That carbon can be bound in a solid form avoiding gray hydrogens emissions and blue hydrogens technical and cost challenges of capturing it as a gas. BASF and Hazer use carbon and iron ore as their catalysts respectively. While Monolith uses a high temperature plasma that yields quote unquote beautiful carbon black for tires and other stuff. C Zero on the other hand, after experimenting with molten salts and metals settle on a molten nickel based catalyst in a continuous flow process.
C Zero’s secret sauce is extracting the carbon from high temperature melt and while Jones declined to get into specifics, the process involves a circulation loop that allows the carbon to be disposed in a section of the reactor as a gas solid suspension, which can then be extracted by a variety of existing industrial processes. The second big difference for C Zero is the decision to forego trying to make solid carbon into a potentially valuable byproduct. Instead, the company wants to, quote unquote, have the lowest cost hydrogen production, even to the extent that we have to put into our cost structure landfilling the carbon, that choice does come with costs while hydrogen makes up about 60% of the energy contained in methane, carbon makes up the remaining 40%.
Energy that’s lost and converting it to a solid rather than combusting it. And finding ways to get paid for it in solid form isn’t an economically sound concept, in a world where the value of carbon free energy isn’t being rewarded. So choosing a process that optimizes hydrogen production at an industrial scale at the expense of high quality carbon byproduct, on the other hand, quote, seemed like a gamble three years ago, but now hopefully it looks like the right decision, Jones said. And that’s because C Zero expects this process to yield hydrogen at a cost of about $1.50 a kilogram, about the same as Gray hydrogen. That’s well below the cost of green hydrogen via electrolysis today, which ranges from $4 per kilogram and up, that price is bound to drop as massive government mandates and incentives drive a boom in global electrolysis capacity.
National hydrogen strategies in Europe and Asia have set targets totaling 66 gigawatts of capacity, according to world max news report, which is a scale that will exceed existing global demand for the gas absent a major growth in end users for heating, electricity generation and fuel for ships, planes and long haul road transport. This growth is bring green hydrogen project developers to state claims to costs, there’ll be competitive to gray hydrogen by the end of the decade or earlier. These cost declines will depend on several factors, including increased efficiencies and economies of scale for electrolyzers. And, of course, the cost and availability of carbon free electricity to supply them. But Jones pointed out that the electricity required to generate a kilogram of green hydrogen equates to roughly seven times the equivalent amount of energy contained in the natural gas used to make a kilogram of turquoise hydrogen.
Then, of course, there’s the issue of how often renewable energy can be cost effectively diverted to making hydrogen instead of serving loads. And because much of the power generation sectors plans for hydrogen center on using it to replace natural gas, installing a C Zero reactor, at the point where existing natural gas pipelines feed into power plants could be far less capital intensive solution than building or retrofitting a pipeline to carry hydrogen from far off sources. And to be clear, the company emphatically does not claim that this process is going to be cheaper than steam methane reforming, Jones says, We do think we’re going to be cheaper than steam methane reforming plus carbon capture. However, we don’t think about it as what’s the cost of hydrogen production? We think about it as what’s the cost for avoided co2.
And while some clean tech investors may question the wisdom of investing in technologies that continue to make use of natural gas, if you’re sitting in billions or trillions of dollars of natural gas reserves, what are you going to do with that, we see ourselves as being the bridge from existing natural gas assets and reserves to a low carbon future. Now personally, I’m excited to see this turquoise approach to creating hydrogen. It’s also very good news for the industry that Breakthrough Energy Ventures is backing this company. There’s also something very interesting with this article fails to mention is very important to this conversation. And that is that methane pyrolysis does use hydrocarbons, yes, but can also use bio methane, or renewable natural gas. So really, the main focus on this technology should be the fact that we can take natural gas or any other kind of hydrocarbon. And by using this technology, having a completely 100%, co2 free hydrogen source. That’s big.
Alright, that’s it for me, everyone. If you have any questions, comments or concerns about today’s episode, stop by my website at thehydrogenpodcast.com and let me know. 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 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.
