Green hydrogen has encountered its fair share of doubt among investors throughout its history. This doubt has arisen due to apprehensions surrounding the industry’s traditionally elevated production expenses, the significant infrastructure demands, the formidable competition from battery technology, and the scant backing it has historically received from governments. Nonetheless, there appears to be a company that has uncovered a means to alter investors’ perceptions.
EH2: Pioneering a Green Hydrogen Unicorn
Could Electric Hydrogen (EH2), a company headquartered in Massachusetts specializing in green hydrogen technology, be the one to turn the tide? Recent developments suggest that EH2 has achieved a remarkable milestone by becoming the first unicorn in the green hydrogen sector. This achievement was made possible by a substantial $380 million Series C funding round, which propelled EH2’s valuation to a staggering $1 billion. Crunchbase data reveals that this funding round has pushed EH2’s total funding to nearly $600 million, thanks in part to support from major players like Microsoft’s Climate Innovation Fund, United Airlines, BP, and Fortescue Metals.
How does EH2 plan to utilize this newfound financial backing?
According to a company spokesperson, EH2 intends to channel these funds towards expanding the production capacity of its electrolyzers. Electrolyzers, the devices responsible for a crucial part of the green hydrogen production process, use a process known as electrolysis to separate water (H2O) into its two primary components: hydrogen (H2) and oxygen (O2). However, the conventional challenge with electrolyzers is their high cost and substantial energy consumption relative to the amount of hydrogen they produce.
What sets EH2 apart from other players in the green hydrogen industry?
EH2 asserts that it has found a groundbreaking approach to producing hydrogen more efficiently and cost-effectively. A significant contributor to this achievement is EH2’s proprietary technology, which involves the design and in-house manufacturing of critical electrolyzer components in their Massachusetts-based laboratory. This approach has led to improved performance and cost reductions. Interestingly, EH2’s CEO, Raffi Garabedian, previously held the position of Chief Technology Officer at First Solar, while co-founder Dave Eaglesham also served as a previous CTO at First Solar.
Harnessing Government Incentives: The Biden Administration’s Inflation Reduction Act
EH2 believes that these incentives will make green hydrogen more competitive in today’s market, thereby eliminating the need for the environmentally harmful use of cheap natural gas for hydrogen production. Moreover, in regions where renewable energy sources are abundant and tax credits surpass production costs, EH2 envisions the possibility of providing hydrogen to buyers at no cost.
Green Hydrogen’s Role in Sustainable Transportation and Industry
While battery technology is making significant inroads in the transportation sector, what makes green hydrogen particularly appealing for large vehicles such as trucks and planes, as well as industrial facilities like steel mills, fertilizer factories, and chemical plants? How does green hydrogen offer a compelling solution for the long-distance transport of green power?
What distinguishes EH2’s business model from traditional hydrogen producers?
EH2 chooses to sell cost-effective electrolyzers to hydrogen producers rather than marketing hydrogen itself. This business model bears similarities to the practice of solar panel manufacturers supplying panels to clean energy developers. To support this strategy, EH2 is making rapid strides in establishing an electrolyzer factory in Massachusetts, scheduled for launch in 2024. The company’s ambitious plans include the delivery and commissioning of 100-megawatt electrolyzer systems, each capable of producing nearly 50 tons of green hydrogen daily at a competitive cost.
What are EH2’s aspirations for the coming decade?
By 2030, EH2 aims to empower customers to produce hydrogen in regions rich in renewable energy, such as Texas, at a cost of approximately $1.50 per kilogram. This projected cost aligns with the pricing of hydrogen derived from natural gas. How might this endeavor reshape the green hydrogen landscape?
EH2’s Ongoing Success Story
Electric Hydrogen continues to make substantial progress in the green hydrogen industry. In a recent development, EH2 was selected to supply equipment for New Fortress Energy’s green hydrogen plant in Texas. Anticipating the commencement of hydrogen production in Q4 2024 and full commercial operation in 2025, EH2 remains at the forefront of industry innovation.
In summary, Electric Hydrogen (EH2) has emerged as a pioneer in the green hydrogen sector, challenging historical investor skepticism and becoming the industry’s first unicorn. Through its innovative technology, visionary leadership, and strategic focus on electrolysis, EH2 is overcoming cost barriers and making green hydrogen a competitive reality. Supported by government incentives and ambitious expansion plans, EH2 is poised to play a pivotal role in the transition to a more sustainable energy future. As industries seek cleaner alternatives for transportation and manufacturing, EH2’s green hydrogen solution may hold the key to unlocking a greener, more sustainable tomorrow.