Earlier this month, General Motors and Pacific Gas and Electric announced a new program to test ways electric vehicles could feed energy into the grid or power homes. On a like mission to make California’s transition to renewables more efficient and cost-effective, VXNews interviews H2U Technologies President and CEO Mark McGough and CalTech Professor and Chief Scientific Advisor Dr. Nate Lewis to share their exciting new developments in commercializing green hydrogen technology. The two experts emphasize green hydrogen’s role as a critical enabling technology for decarbonizing transportation fuels and long-term grid energy storage.
Nate, When VX News last interviewed you, the promise of your DOE research was to develop technology for converting sunlight to carbon free fuel. Bring our readers up-to-date on the status of that important, transformative research?
Nate Lewis: This is an interesting story. You may remember that in 2009, there was an energy innovation hub, the Joint Center for Artificial Photosynthesis (JCAP) established by the Department of Energy at Caltech, with partners up and down the state of California to try to make fuel directly from sunlight. We had a motto of “no bugs, no wires”, and we didn't want to use biofuels. At the time, solar and wind electricity were very expensive, and we thought that the winning approach was to avoid making that electricity and then converting it to fuel. We launched the $122,000,000, 5-year program and made a tremendous amount of progress toward that goal. We had a demonstration of the tech at a scale of a thumbnail after five years and we were going great.
Then, the Department of Energy said shifted the goal and goalposts on us just as we were about to score. There was an article quoting the former Secretary of Energy, Steve Chu, saying that he didn't think this was the right decision at all. The decision was made that the first logical stepping stone to make hydrogen would be terminated as a focus. Instead, we needed to leap over logical steps and go directly from sunlight to a liquid fuel for transportation, by fixing carbon dioxide.
Well, that made the problem a lot more difficult. Technically and even conceptually, the goal still hasn't been reached. Although there's been a little bit of progress, the change in direction and goals really put the brakes on moving up the technology readiness level of solar to hydrogen. That was the first logical step.
In about 2018, I looked at that landscape and asked, “what's different?” What's different is that now we have a lot of cheap solar electricity. In fact, we have so much that we curtail it and we can't use it all. Maybe we should do this the easier way and take the best of what we had developed in JCAP: the ability to discover new catalysts at a rate much faster than anybody else in human history, and commercialize technology around that. Further, let’s not skip steps and do what we can do, not what we wish we might someday aspire to do, and not restrict ourselves even to make hydrogen directly from sunlight, but to do it from cheaper and more curtailed wind and solar electricity. That approach is ready for commercialization, so we spun off a company.
The company is in LA under the guidance of our CEO Mark McGough. They're doing great in taking this technology and developing catalysts that replace the precious platinum group metals that are a true barrier to scale of electrolytic hydrogen. We are now discovering new platinum and iridium replacement catalysts, putting them into disruptive, cheap electrolyzer designs, trying to take advantage of all of this cheap solar and wind electricity, and converting it into hydrogen. We can use it to make ammonia and fertilizer to feed 9 billion people in a green and sustainable way, to upgrade petrochemicals, and to replace the transportation sector energy services that we can’t readily electrify like ships, planes, and trucks.
We and everybody now see a tremendous opportunity for green hydrogen that we can apply our technology to. We're still working a little bit in the lab on the direct solar to hydrogen, but after the DOE pulled back, that's going to be a long time coming. Climate change doesn't give us a long time coming to play around, though, so we're doing what we can, as fast as we can. That's what the whole idea and focus of H2U technologies.
Mark, elaborate on the market mission of H2U and the company’s progress in taking advantage of cheap solar and wind energy to produce, at scale, green hydrogen using a novel, low cost electrolyzer design?
Mark McGough: H2U aspires to be a leader in the a species-changing movement towards low cost, carbon-free fuel. By definition, the green hydrogen that our products will produce is carbon free. When you burn hydrogen, it only produces water vapor. It's a sustainable cycle, benign, and a great answer to the carbon issues on our planet.
We still have a serious problem getting to scale in the PEM electrolyzer industry. There simply isn't enough mineable iridium already on this planet to produce the kind of hydrogen outputs that the world needs. We've discovered low-cost, abundant catalysts for green hydrogen production that replace those rare expensive PEMs. Coupled with our novel, low cost electrolyzer design, we and our partners will produce very low-cost green hydrogen. It's not only about the benign nature of the carbon free processes, but it's also doing it at a cost that is comparable to the fossil fuels. That's less than $2 a kilogram.
Two key components of getting to that price point is the cost of electricity and CapEx. Curtailed renewables offer very low cost electricity and there's a lot more of it now than there used to be. H2U’s electrolyzer designcost is projected to be greatly reduced, starting with the dramatically lower cost of catalyst. If you know about the prices of platinum and iridium, they’re more expensive than gold. What we have is something that's less than one thousandth of that cost. That allows you to rethink the way you design the electrolyzer.
That is what leads you to a novel electrolyzer design. We’re anointing it the Gramme 50. It’s got design features that we think will reshape the way the world looks at PEM electrolyzers. We're really excited about these extensions that all come from the catalytic discovery capability that no one else has in the world.
Help our readers understand H2U’s critical enabling two-step catalytic technology for converting water to hydrogen.
Mark McGough: Sure, the magic happens at the catalyst level. You're applying a charge across a catalyst-coated membrane, and you run water through that. The water is split into hydrogen gas and oxygen gas. Water goes in, in hydrogen and oxygen gas come out the other side of electrolyzer. The great thing is when you take that hydrogen gas and use it as a fuel, it only produces water vapor. It's a very benign process from front to finish.
Nate, you noted above that H2U emerged out of the CalTech consortium’s DOE funded research endeavor. Elaborate on this commercialization effort, its evolution and significance?
Nate Lewis: The consortium itself had a funding cut in 2015 by about a factor of two. Then in 2020, they brought in new players, restructured, refocused, and got another factor of two funding cut. There's an effort, but it's a much smaller fraction of its former self.
What this means is two things. One is we had a species-changing movement of all the best scientists from around the world who were interacting with or moving physically to Caltech and Berkeley to be a part of this leading effort that was unmatched anywhere else. We don't have that anymore. All the other countries that were participating are now running at least as fast, if not faster, than we are as a country in putting their foot on the gas on that technology development. It's much more fragmented.
So my contribution to that effort is transitioning, for a good reason, into mostly commercializing now the most promising parts of that technology. I actually feel good about that. If we're going to run slow on the direct solar to hydrogen opportunity, then don't fight those headwinds and do something now for climate while we can make a difference instead of wishing for a discovery that we just simply don’t now have or have a clear path to any time soon, in terms of reducing CO2 directly and selectively at scale to a liquid fuel.
Mark, address what attracted you to lead H2U?
Mark McGough: Well we're talking with one of the reasons that attracted me to H2U. I learned a long time ago that half the game is won when you choose sides. When you take Dr. Lewis and a lot of the folks that trained under him and put their attention on to H2U, we've got a brain trust like no other startup.
I was approached by syndicates that wanted me to run everything from fusion companies to more traditional energy storage companies at grid scale. Why I chose H2U over others is because we've got a fantastic team and a fast growth market. We've got a great start on this catalyst discovery capability. We've got a market with some significant tailwind. I don't have to tell you how much interest by governments and private sectors is being applied to replacing fossil fuels with a benign, carbon free option that doesn't produce carbons when it's when it's manufactured or used.
On top of all that, the Achilles heel of renewable generation is the lack of firming. Mother Nature doesn't always provide the energy when we need it most. If you don't have the ability to store it in a grid scale, that's a big problem. A utility executive said to me 20 years ago, “Mark, I have already paid once to generate that electron. I don't want to have to pay a lot of money to store it.”
Utilities have a long legacy of generating electrons that are instantaneously used. You want to use more solar and wind in particular. Hydrogen generation is a fantastic and inexpensive way compared to almost every other grid scale option. The only other cheap grid-scale storage options are very limited because there are environmental and geographical constraints. If you compare it to grid scale battery storage, we've got fantastic economics in our favor of generating hydrogen, storing that, and reusing it whenever you need it.
What, Mark, are the speed bumps in H2U’s way to goal?
Mark McGough: There are plenty of them. The big one is that we are moving forward aggressively to test our products. Whenever you do these kinds of things at an early stage, you have to be prepared for speed bumps in the road and be able to navigate around those.
But testing is really an opportunity that we're going to be offering to a number of partners. We already have one with SoCal Gas. There's no larger gas distributor in the country than them. They're very progressive, not to mention nearby. They're demonstrating the efficacy of our non-PEM catalyst electrolyzer under the contract we have with them. We'll be doing a lot more of that to get the product out in the field and pedigreed. Then, we'll be releasing production-ready versions to the market.
We're focusing on doing a great job with the demonstrating the efficacy of our non-PEM catalysts and our new electrolyzer designs. Those are our areas, first and foremost, but we've got fantastic backers. Any good startup CEO is always mindful of is fundraising. What we've got and with the market that we're in, it's a great story. It's going to be a fortunate few that will work with us.
Nate Lewis: Allow me to share a lesson that fits. The lesson is learning from solar in Germany. They had the first government push with feed-in tariffs to drive down the cost of solar. Basically, individual consumers ended up paying the rate equivalent of about 40 cents a kilowatt hour in order to drive the market and buy down the technology, so then it could be scaled in other countries. We're seeing the same thing in the United States and at LADWP.
We shouldn’t lock out the technology of the future in the rush to commercialize the technology of the present. The biggest speed bump that a new technology like our new catalysts has is proving itself in the marketplace as a bankable product that will last and perform. We would have to take five years of accelerated testing to do that. Although it will certainly be cheaper than buying iridium, what we're doing now is buying iridium until we're blue in the face in the rush to install.
Don't pick the winners and losers. Leave room in these projects for demonstration of new technology to help it get to scale. If it doesn't beat the incumbents, fine. You haven't lost anything. If it does, then you're saving money in the long run and always staying on the forefront of scalable technology.
I would urge LADWP, with the Intermountain Project, to do that. Of course, it's logical that LADWP would reserve a demonstration project for the world's leading electrolyzer company in Los Angeles: H2U.
More broadly, this is just good policy in California and around the world. I would urge that the policymakers at CARB, CEC, and in LA that are overseeing this push toward green hydrogen hubs to make sure that we don't pick our winners too soon. Cover our bases by leaving room for new tech as carve outs even in these projects, so that we can always have the advantage of getting the cheapest and best in the long run
Most investing stakeholders in innovation are impatient when there is great pressure to act now. How do those involved in the commercialization of breakthrough research resist such market pressure?
Nate Lewis: It's a false oxymoron that you can't have your cake and eat it too; that you can't be patient and act now. Acting now is urgently needed to get these projects going and to get us the large scale storage that we need. That doesn't mean you don't reserve a small corner of those projects for demonstration of new technology that can be better later. It's prudent to do a mix.
You can say you’re going to fund the research. The problem is then there's the Valley of Death it's got to cross and prove itself in the marketplace. If you don't give it the opportunity to do that on a fair footing, then, it's almost impossible to make that happen. Consequently we end up with a more costly solution than we would have gotten if we would have kept the portfolio on our horizon.
In every one of these projects that we're doing now, we should have a carve out for a corner of those projects, maybe 10 percent, explicitly devoted to developing new technology and taking risks that can turn out to develop options and products that are even better than the one you just bought.
Mark McGough: What Henry Ford told his investors, was if you asked the customer 100 years ago what they were looking for in transportation, they would have said “faster horses”! What we have now in the electrolyzer market is a 100 year-old legacy design that can be vastly improved on. That's what H2U is bringing to the table.
That's not to say that there isn't a place for legacy technology, but innovation is what drives the advancement in these technologies, not just building at scale. I’m very familiar with benefits of scale, but innovation is going to drive the success of low-cost green hydrogen, and that is what H2U brings to the table.
Lastly, what relationships, if any, does H2U have with other global and national companies that are currently investing in, producing, and marketing green hydrogen?
Mark McGough: Before I even opened this new facility, I had a lineup of international visitors that I had to put the brakes on until we got ourselves at least partly situated at this facility. I've had visitors from both sides of the pond, and more coming. Probably every day I get household names from Japan or Korea or Europe. In fact, we're working with one major OEM in Europe that we'll be announcing within the next few weeks.
Candidly, what we have to do is pick our partners wisely. As a relatively small company, we can't make the same level of investment with every company that comes knocking. When we have those engagements, there's an obligation on our part to provide technical application engineering and support with products.
We're looking at partners not only for technology, proof of concept, and in field testing, but also even with the DOE funding. I'm sure you are well aware of FOA-2264 and FOA-2698, now inthe RFI stage, we feel that -2698 is a hand-in-glove fit for us. We'll also be very pleased to feature H2U technology as part of hub RFI (-2664) responses.