AP – In what could prove a milestone for an industry that hopes to help address climate change, the Silicon Valley company Ohmium announced yesterday it has raised USD250 million to increase production of machines that can make clean hydrogen and displace fossil fuels.
Some climate experts say burning hydrogen can substitute for burning coal, oil or gas, for example in making steel or cement – without contributing to climate change.
That’s been largely theoretical, but real world examples are now growing.
Just four or five years ago, a company working on clean hydrogen from water would not have been able to raise several hundred million dollars, said executive director of the Hydrogen Council Daryl Wilson.
But now there’s rapid growth and demand for it, and a broader recognition that it’s key to addressing climate change, he said.
Hydrogen and clean fuels expert at the consulting firm Capgemini Mark Viehman, called USD250 million a “very impressive” fundraise, and said its own recent research found that 64 per cent of energy and utility companies plan to put money into low-carbon hydrogen efforts by 2030.
Ohmium’s role is to make electrolysers, the devices that take water and split it into hydrogen and oxygen.
Chief Executive Officer Arne Ballantine said the company will use the USD250 million to scale up its plant in Chikkaballapur, outside Bengaluru, India, continue research at the Fremont, California headquarters to reduce the cost of production, and add to its 400-person workforce.
Ballantine said he plans to make enough electrolysers each year to supply two gigawatts’ worth of hydrogen – enough for a few steel or fertiliser plants or several refineries.
Countries and industries are setting ambitious targets to cut carbon dioxide from heavy manufacturing using hydrogen.
There are also plans to use it in power generation and transport. The United States, European Union, Canada and India are offering tax credits and production incentives for clean, or green, hydrogen.
The International Energy Agency (IEA) said in September that global hydrogen demand reached 94 million tonnes in 2021.
Nearly 200 million tons will be needed by 2030 to get on track for net zero emissions by 2050, it said. There are about two dozen major electrolyser manufacturers.
An electrolyser produces clean hydrogen if it draws electricity from a grid that’s powered by renewable energy, such as wind and solar.
Ballantine said Ohmium clients are completely focussed on this method.
This will be a major change, because less than one per cent of hydrogen produced globally now comes from renewable energy, according to the IEA.
It will take a significant ramp-up in electrolyser manufacturing and in zero-carbon electricity to meet the demand for low-emissions hydrogen, said US director for zero-carbon fuels at the Clean Air Task Force Emily Kent. That’s because it requires massive amounts of electricity to run the electrolysers.
Most hydrogen today is made from natural gas, which means greenhouse gases are released to get it out of the ground, and then more can leak as it travels through pipelines. Then to crack the hydrogen from natural gas, companies burn more fossil fuel to make steam, releasing more planet-warming greenhouse gases, unless carbon capture technology is used.
This common method does not require an electrolyser and the hydrogen then goes on to be used mainly in the refining and chemical sectors.
Some US power plants plan to use Ohmium’s ‘Lotus’ electrolyser as a partial substitute for natural gas.
Ohmium is also collaborating with Spanish energy company Cepsa and renewable energy developer Amp Energy India on green hydrogen projects.
It announced an agreement last week to send an electrolyser to a liquified natural gas import terminal in Andalusia, Spain.
