Despite being the most abundant element in the universe, hydrogen remains a very unassuming molecule, existing in relative obscurity compared to elements like carbon or oxygen. However, unbeknownst to many, the global market for hydrogen is already $150bn today, and hydrogen forms a critical part of the value chain across several industries, most especially petroleum refining and ammonia production. Virtually all hydrogen used today is created through gasification or steam reforming, using coal or natural gas as a feedstock. These processes have the unfortunate side effect of generating significant CO2 emissions, roughly 830Mt globally per annum – if it were a country, it would rank 6th in total emissions, between Japan and Germany. As a result, there is a great deal of focus on identifying a cost-effective method to decarbonize the production of hydrogen. One of those methods – blue hydrogen – involves the capture of the associated carbon emissions. But the other solution, which has garnered significant interest both from legislators and capital markets alike, is green hydrogen, or hydrogen produced via water electrolysis and powered by renewable energy. Historically, green hydrogen hasn’t been able to compete with the cheap, yet highly pollutive alternatives, but one small company appears to have unlocked the key to low-cost green hydrogen, and in doing so, may have jumpstarted the hydrogen revolution.
Operating in Portugal, Fusion Fuel (NASDAQ:HTOO) is no stranger to the renewables business. Its partners have been in the industry for over a decade, developing large-scale solar farms across Southern Europe using concentration photovoltaics (CPV), a technology that offers higher conversion efficiency, but is more expensive than flat panel PV, now the industry standard. While CPV has a solar to electricity conversion rate of 40%, the remaining 60% of the sun’s energy ends simply being released into the ambient air through a heat sink. With the solar market at an inflection point, the partners turned their attention on how to utilize that wasted thermal energy to increase the efficiency of the electrolysis process and drive down the cost of green hydrogen production, and thus Fusion Fuel was born.
Tackling this challenge required a fundamental rethinking of the electrolyzer, and so they have spent the last three years redesigning and miniaturizing the electrolyzer to allow it to attach to the back of the CPV modules. “We’ve successfully combined concentrated photovoltaic technology with our proprietary electrolyzer to create significant cost and efficiency advantages,” begins Frederico Figueira de Chaves, CFO of Fusion Fuel, “and in doing so have changed the game by introducing a disruptive technology that produces green hydrogen at ultra-competitive prices.”
Fusion Fuel’s initial strategy was to focus solely on selling its technology to third parties, but its recent merger with HL Acquisitions, a Nasdaq-listed SPAC, means that it now has the balance sheet to not only rapidly scale up production capacity, but also develop and operate their own green hydrogen farms. By owning the production assets and selling green hydrogen to large industrial consumers, Fusion Fuel will be able to capitalize on their unprecedented low cost of production. Their first major milestone is the GreenGas Project in Évora, expected to start producing hydrogen by the middle of 2021, which will be Portugal’s first green hydrogen farm.
“There is a big push to use cleaner sources of energy, not only from government but also from the private sector, which is feeling the pressure from socially-minded investors and consumers,” says Figueira de Chaves. The pressing need to reduce our carbon footprint coupled with the massive market for green hydrogen have certainly positioned Fusion Fuel to be the torchbearer of the hydrogen revolution. While its focus for now is on Southern Europe, the company has its sights set on other geographies with great solar resource like the US, Middle East, and Australian markets, all of which would be an ideal fit for their technology. “Anywhere the sun shines is a great place for Fusion Fuel,” adds Figueira de Chaves, “our mission is accelerate the decarbonization movement by making clean, green hydrogen accessible and cost-competitive, and we look forward to leading that effort.”