As hard-to-abate industries increasingly foster deep decarbonization strategies, green hydrogen produced from renewables via water electrolysis is expected to be at the very heart of the energy transition. However, at present, water electrolysis accounts for only about 0.03% of global hydrogen production. This is largely due to the high cost of green hydrogen (>$5/kg versus <$1.5 for grey hydrogen) due in part to the high cost of electrolyzer systems.
In this newsletter, we will examine trends in water electrolyzer innovation that reduce their cost.
Water electrolyzers are electrochemical devices used to split water molecules into hydrogen and oxygen in the presence of an electrical current. Electrolyzers are divided into four main technologies: alkaline, proton exchange membrane (PEM), anion exchange membrane (AEM) and solid oxide. Alkaline and PEM electrolyzers are the most common, produced on a commercial scale (TRL 9). AEMs are catching up in development, at TRL 6, with the development led by German startup Enapter. As for solid oxide, it is still being demonstrated with German startup Sunfire. To learn more about the technical differences, check out the IRENA report here.
Looking at the evolution of patent filings, we can detect trends in the uptake of new technologies to facilitate the implementation of large-scale green hydrogen use. Indeed, the number of water electrolysis-related patent families published worldwide has increased by 18% per year since 2005. In fact, they have surpassed the number of those related to solid, liquid and oil-based hydrogen sources. Five groups of sub-technologies stand out: (i) cell operation conditions and structure, (ii) electrocatalyst material, (iii) separators (diaphragms, membranes), (iv) stackability of electrolyzers (stacks) and (v) photoelectrolysis.
Cell operation
In an effort to improve efficiency, various electrolyzer cell operating parameters, such as higher temperature, higher pressure and zero gap cell unit design, are being explored to make them more cost-effective over a wider range of operating conditions. Danish startup Hymeth (PEM electrolyzer) has developed a high-pressure electrolyzer that operates at higher efficiency than conventional PEM technologies.
Electrocatalyst materials
Scarce materials (yttrium, titanium, iridium, platinum, zirconium) are a major barrier to the cost and scale-up of electrolyzers. Yet, the surge in patents related to non-noble metal electrocatalysts indicates that R&D is moving forward to finding new solutions to mitigate material scarcity. US startups Alchemr (AEM electrolyzers) and H2U Technologies (PEM electrolyzers) have developed electrolyzers that do not require noble metals as catalysts.
Separators (diaphragms, membranes)
Reducing the thickness of membranes increases efficiency, which in turn reduces electricity consumption. Danish startup Hystar has developed an electrolyzer that claims to reduce membrane thickness by up to 90% compared to conventional PEM technologies.
Stackability of electrolyzers (stacks)
Electrodes, bipolar plates and porous transport layers can contribute significantly to the stack cost. Improvements in these components, including scaling up their manufacturing, can lead to lower capital costs.
Photoelectrolysis
Water photoelectrolysis (water splitting using light as the energy source) is a strong, newly emerging technology. In terms of patent filings, it remains a niche technology, accounting for 6.5% of all water electrolysis patents. Yet, 37% are international patent families, which underscores the importance that applicants place on protecting their inventions outside the domestic market. A prototype of photo-assisted electrolyzer has been developed by ENGIE’s R&D laboratory CRIGEN and US startup Nanoptek.
Europe and Japan account for more than 50% of the total number of international patents in these 5 sub-technology areas. Leading players include Toshiba (JP), CEA (FR), Panasonic (JP), Siemens (DE) and Honda (JP). While Europe leads in the stackability of electrolyzers (stacks) (41% of the total patents in this area), electrocatalyst material (34%) and cell operation conditions and structure (32%), Japan ranks first in photoelectrolysis (39%) and separators (diaphragms, membranes) (36%). Chinese international patents account for only about 4% across the five technology areas but China dominates in terms of the number of pure domestic patent filings.
In short, green hydrogen technology has the potential to decarbonize numerous hard-to-abate industries. The upward trend in patent filings signals that more will soon be filed, addressing the urgent need for new solutions to lower the cost of electrolyzers, while increasing technological efficiency and production capacity. Case to be followed…
Market size of $5 billion in 2021
The global electrolyzer market size was estimated at $5.6 billion in 2021 and is expected to reach $69.1 billion by the end of 2030, with a registered CAGR of 32.21% from 2022 to 2030.
85 funded companies
Tracxn
French-based startup founded in 2017 which is a developer of green hydrogen plants. The first was inaugurated in 2021, connected to offshore wind turbines.
Singapore-based startup founded in 2020 which is a manufacturer of new generation components for electrolyser cells, stacks and systems. Products include PEM electrolyzers, AEM electrolyzers and solar-to-hydrogen panels.
US-based startup founded in 2016 which is a manufacturer of a new class of electrloyzers. Claims to operate at temperatures from 100°C to 650°C, in between those of alkaline, PEM and solid oxide electrolyzers.
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Among the numerous decarbonization solutions under development, three major carbon capture applications stand out today: industrial point source carbon capture, direct air capture (DAC) and bioenergy with carbon capture. Although industrial point source carbon capture appears to be the main focus for most decarbonization roadmaps thanks to increasingly mature and cost-effective technologies driving greater deployment across industrial sites, several challenges must be addressed before it can reach sufficient scale, including policy and regulatory support, access to funding, public acceptance and further cost improvement.
Carbon Capture-as-a-Service (CCaaS) is a business model that is gaining ground in part to circumvent the huge CAPEX hurdles encountered in these type of infrastructure projects. By opting for a one-stop shop solution that handles the entire value chain, hard-to-abate industries can pay to capture their CO2 emissions on a per-ton basis, while other specialized actors take on the risk (and potential financial reward) of managing the full value chain from capture to utilization or storage.
In January, Aster Fab moderated a panel featuring Tim Cowan (VP Corporate Development at Carbon Clean), Silvia Gentilucci (Technology Onshore Planning at SAIPEM) and Michael Evans (CEO of Cambridge Carbon Capture) to discuss the strengths and prospects of the CCaaS business model.
Takeaways from the discussion included:
According to the latest Global Carbon Budget published in November 2022, if emissions are not reduced through decarbonization technologies such as Carbon Capture Utilization and Storage (CCUS), the world will have exhausted its 1.5°C carbon budget – the cumulative amount of CO2 emissions permitted over a period of time to keep within the 1.5°C threshold – in nine years. Indeed, the equation highlighted is quite simple: there are about 380Gt of CO₂-equivalent emissions left in the 1.5°C budget, and right now we use just over 40Gt of it each year.
As such, CCUS is recognized as a necessary piece of the decarbonization jigsaw, but the adoption isn’t moving fast enough. According to a McKinsey analysis, CCUS adoption must increase 120-fold by 2050 for countries to achieve their net-zero reduction goals, reaching at least 4.2 gigatons per annum (GTPA) of CO₂ captured.
The scale of the challenge to achieve net zero is so huge that we need all the best ideas. For hard-to-abate industry executives in the audience, you’re probably looking at energy efficiency as well as alternative fuels. But you’ll still have CO₂ in your process. That’s why we believe carbon capture is a necessary piece of the decarbonization puzzle and CycloneCC, our fully modular technology, will make carbon capture simple, afforable, and scalable.
In 2021, Decarb Connect conducted a benchmarking survey of industry attitudes towards CCUS that revealed that 65% of executives working in hard-to-abate industries see CCUS as ‘critical’ or ‘important’ for reaching their 2030/2050 goals. It also reveals that 41% are favorable to as CCaaS model, while 59% prefer a mix of funded and owned CCUS. In other words, no executive opted for the traditional model of owning and operating the infrastructure themselves.
Thus, the CCaaS business model appears to be a promising way to accelerate the adoption of carbon capture technology for industrial players:
“At Carbon Clean, we use our leading technology to capture CO₂. and will work with partners to provide the other crucial elements of the value chain: compression, transportation, sequestration or utilization. Our mission is to work with industrial partners to offer an end-to-end handling of our customers’ CO₂.” Tim Cowan, VP Corporate Development at Carbon Clean.
Tax credits, direct subsidies and price support mechanisms are beginning to encourage investment in CCUS. The US, for example, has a 45Q-tax credit that provides a fixed payment per ton of carbon dioxide sequestered or used. The IRA (Inflation Reduction Act) has increased the amount of the credit from $50 to $85 a ton for sequestered industrial or power emission, and from $50 to $180 a ton for emissions captured from the atmosphere and sequestered. In other words, they provide a direct revenue stream immediately improving the investment case for low-carbon technologies, such as CCUS. What the IRA calls tax credits, the EU calls State Aid. Yet, the panelists affirm that while the EU led the whole decarbonization movement for 30 years, the EU is now behind in terms of policy.
It is going to be very challenging for CCUS as it currently stands to make the whole thing stack up. I don’t think the carbon tax will be the viable way forward in the long-term. We need other incentives, as the US are currently doing with the IRA. Many innovative policies are starting to come out of the US and this will encourage innovative companies to set up operations there, giving the US a competitive advantage over the UK and EU in what will become a significant new industry.
Another element is the uneven distribution of storage sites across Europe. Often illustrated as the ‘chicken and egg’ paradox, there is a need to scale the value chain as a whole, including storage infrastructure. Indeed, a carbon capture plant will not start operating until the captured CO₂ can be transported and then either permanently stored or used. Similarly, no large-scale carbon storage project will be financed without clear commitments regarding the origin and volume of CO2 to be stored, as it determines the financial viability of the overall project.
In Italy, there are plans to build infrastructure using depleted reservoirs in the Adriatic Sea for local storage of CO₂. Without adequate transportation and storage infrastructure, industry will not be able to adopt carbon capture technologies.
Norway’s Longship project, which is sponsored by the Norwegian government, aims to solve this problem by supporting the whole value chain from carbon capture to transportation and storage. Captured emissions will be transported by tankship and stored deep underground using Northern Light’s open-access CO₂ transport and storage infrastructure.
Finally, speakers also emphasized that addressing public concerns around the safety of these technologies will be paramount. Communicating that carbon capture is safe, effective and a needed method of climate change mitigation, can help bring people on-board and ensure that projects overcome development hurdles. “I think honesty in the media about the situation would be a true incentive. If the public understood how urgent the situation is, and understood more about the technology, there would be a lot more action”. Michaels Evans, CEO of Cambridge Carbon Capture
Our client was the M&A department of a leading nuclear company.
Until now, the department had always taken majority stakes in established companies. However, an interesting opportunity for a minority investment in an innovative start-up was presented to them by a Business Unit of the group.
Aster Fab’s mission was to assist the department in evaluating the opportunity and then in structuring the investment proposal.
was the conclusion of the business plan exercise
the challenge of the business plan enabled to halve the financing needs announced by the founders
Although 3D printing seems to have been a brief trend for end consumers, the additive manufacturing (AM) market continues to experience significant growth, with a market size valued at $35 bn in 2021 and projected to reach $420 bn by 2030.
The AM industry is led largely by the U.S. market with $8 billion in funding, far head Europe at $1.4 billion or China at $700 million. In fact, AM technologies are slowly getting cheaper, faster and most importantly, bigger. In addition, AM technologies can deliver products with improved environmental footprint by reducing waste within production processes, enabling on-demand customized items, as well as more local production, with lower embedded CO2 footprint.
Historically, the aerospace and defense industries pioneered AM solutions in the 1990s to create complex, low-volume parts and custom tooling quickly and efficiently. The automotive industry followed, taking advantage of the opportunities to explore different layouts, aesthetics and functions to speed up the final product design. The use of 3D printing for prototyping, market testing and custom products then expanded and marked the beginning of the ponctual use for additive manufacturing in industries.
While industries such as food, education and robotics are increasing their use of 3D printing, sectors at the forefront of AM innovations because of the individualized production possibilities are construction and healthcare (California’s Manufacturing Network).
Additive manufacturing is enabling healthcare, and in particular the medical and dental sectors, to create implants, prosthetics, surgical guides, medical equipment, molds, wearables and tools. No two wounds or bodies are the same and the democratization of customization of prosthetics, wearables and implants on a global scale is an industry-shattering innovation. Major companies such as HP, Siemens and Dassault Systems have already adopted 3D printing technologies to produce medical devices (Medical Device Network).
In the construction sector, large-scale 3D printing is creating building components, structural beams, architectural facades and transforming the industry (AllPlan). Historically, 3D printing production in construction was isolated and separated from a conventional manufacturing process. With larger-scale additive manufacturing technologies, 3D printing can take place directly on construction sites and create an integrated production environment. For example, Vinci Construction acquired French startup XtreeE, founded in 2016, which offers automated construction of various types of architecture and thus creates entire building structures.
Nevertheless, AM is still relatively new and need further performance improvement and cost reduction in order to reach large scale deployment across most industries. Regulatory and safety concerns also currently limit the spread of 3D printing applications.
Looking at the trends in the AM market, a few patterns emerge:
Market size of $14 billion in 2021
The market was valued at $14 bn in 2021 and is projected to reach $78 bn by 2030, at a CAGR of 21%.
863 funded companies
Tracxn
Dutch-based startup founded in 2013 that develops 3D concrete printers and mortar for enabling 3D printing in construction.
US-based startup founded in 2016 that is using 3D bioprinting technology to build human tissues for drug development and develop human organs for transplantation.
US-based startup founded in 2016 which provides AI-enabled desktop 3D battery printers for automotive applications.
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As the market for electric vehicles accelerates rapidly, so does the investment in charging infrastructure needed to support this growing market. While the vast majority of EV charging now takes place at home and at work, widespread, open-access public charging infrastructure will be essential to support EV drivers beyond early adopters.
In the past, proprietary electric vehicle charging technologies competed for market share. But this has changed in recent years, with pressure from regulators and automakers to provide EV drivers with a smoother, more reliable and interoperable charging experience.
Charging station interoperability
The technology behind charging station interoperability is universal roaming. It is analogous to the use of Automated Teller Machines (ATMs), which allow a consumer to access funds from any bank. Similarly, universal roaming allows an EV driver who is a member of a single network to access and pay at any public EV charger.
This therefore requires billing interoperability for which two business models exist:
The second business model, which bypasses the bureaucracy required by bilateral agreements, is the one that is gaining the most ground. Hub players include Hubject (German startup), Gireve (French), e-clearing.net (German startup), Mobi.E (Portugal startup) and others. Hubject is the leading player with over 1,000 B2B partners in over 52 countries and 4 continents, while the other 3 players are based in Europe.
Hub players are taking interoperability a step further with Plug & Charge. It enables automated authentication and billing processes between the EV and the charging station without the need for RFID cards, credit/debit cards, or charging apps, while ensuring secure transactions.
Vehicle-to-grid interoperability
Interoperability goes beyond billing. Indeed, bidirectional, vehicle-to-grid, or V2G, charging technology will be crucial to EV adoption and avoiding worst-case energy scenarios as EV charging demand surges. General Motors, for example, launched GM Energy in October. It includes GM’s Ultium Home and Ultium Commercial lines. Both will offer products and services that enable bidirectional charging to increase the grid’s reliability. Ford, meanwhile, has marketed the ability of its F-150 Lightning electric pickup to power a home in the event of a blackout. V2G technology has the potential to open up new revenue streams for automakers as they become more intertwined with the power grid.
Physical charging interface interoperability
After seeing a myriad of charging plugs spur, fragmentation has been mitigated. In Europe, Combined Charging System (CCS) is the standard: AC and DC charging sit in one plug. In Japan, the standard is CHAdeMO which will be adopted this year by China. While in the US, it’s Tesla’s Supercharger. But charging goes beyond wiring. Austrian startup Easelink raised €8.3M in January last year and is pioneering new technology. Its conductive charging system, named ‘Matrix Charging’, has the ambition to set up an automated charging network for electric vehicles without the driver ever stepping out or handling the charging cable. It consists of two main components: a vehicle unit attached to the vehicle’s underbody – Matrix Charging Connector – and an infrastructure unit at the parking space – Matrix Charging Pad.
In short, harmonization of technology standards and interoperability between the electric vehicle (EV) and the grid are making inroads. Similarly, widespread public charging access is being bolstered by uberization platforms such as French startup Werenode which enables private owners to provide access to their charging points. Thus, all stakeholders in public EV infrastructure— including EVSPs, electric companies, EV supply equipment OEMs, and automakers—must continue to join forces to streamline system integration and improve customer experience.
EV charging projected to reach $420 bn by 2030
The market was valued at $35 bn in 2021 and is projected to reach $420 bn by 2030, at a CAGR of 32%.
537 funded companies
Tracxn
Germany-based startup founded in 2012 that is the leading e-Roaming platform in Europe giving EV drivers a seamless charging experience across borders. Hubject is backed by Enel X.
Austria-based startup founded in 2004 that has developed a wireless EV charging system, using its Matrix Charging system. Easelink is backed by EnBW and Wien Energie.
France-based startup founded in 2018 that has developed a decentralized marketplace, leveraging blockchain, so that anyone can share their EV charging station. Fiat, XTZ or WRC tokens can be used to pay charging sessions.
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Engagement with startups was carried out by a few isolated business units. The Strategy team asked us to think about the structuring of a future Open Innovation department, the vehicles to deploy and how to structure them.
were recommended to make up the client’s portfolio.
were conducted to grasp a better understanding of competitors’ open innovation vehicles.
were organized to co-construct the client’s open innovation strategy, roadmap and next steps.
With over 1 million startups operating in the world, it takes time and expertise to build a robust deal flow. Yet, its quality is the cornerstone of success of Open Innovation, CVC, M&A and Strategy teams.
Aster Fab’s mission was to build for our client a robust startup deal flow from scratch, and then, throughout the last four years, to be in charge of qualified deal sourcing.
conducted throughout the year
entries in the deal flow
presented to the client
Industries are facing increasing pressure to reduce their carbon footprint swiftly.
Conducting a carbon footprint assessment is a starting point, as it allows to amount the company’s greenhouse gas emissions (GHG), compare them to established benchmarks and devise a robust decarbonization trajectory.
Aster Fab was missioned to conduct the company’s carbon assessment (scope 1, scope 2 & scope 3) and support in the establishment of their decarbonization trajectory.
calculated in the carbon footprint assessment
fell under scope 3
