Energy is a thorny problem in many parts of Africa and around the world. The energy sector is the mother of all sectors, with energy costing world economies over $5 trillion every year. And the way energy is extracted, produced and delivered hasn’t changed much since the Industrial Revolution two centuries ago. The centrally produced and distributed energy model is still incredibly wasteful and inefficient. It’s especially a problematic issue for developing countries, countries that lack natural resources and islands. As of 2015, a whopping 1.3 billion people still had no access to electricity, while in developed countries, 65% of energy was being wasted.
Recently, I had an opportunity to chat briefly about the future of the global energy market with Kirill Gichunts of H2 Energy Renaissance, a California-based company that’s expanding into Africa.
Kirill Gichunts of H2 Energy Renaissance
Is the world energy market efficient and is there room for improvement?
Energy production and delivery hide some costly surprises. Electricity power plants operate with only 35% efficiency, while internal combustion engines operate with 20% to 35% efficiency. This means that over 65% of energy resources are wasted, dissipated as heat, during energy production. Another 8% to 12% of produced electricity is then lost during transmission via the electricity grid. Moreover, the grid can then increase wholesale electricity prices by 100%. Finally, fossil fuel by-products, such as coal sludge, ash and greenhouse gasses that pollute the air ultimately double the price of these fuels. Therefore, to sum up, the energy market is definitely not efficient.
What are some of the bigger picture issues you see going forward in the energy market?
It is estimated that the world will require $48 trillion in energy infrastructure investment by 2035. Energy is expensive, because it is supported by an inherently old centralized architecture and inefficient production system. For developing countries, the build out of energy infrastructure is often too costly to afford. The costs of running power lines, substations, energy storage, backup, metering and load distribution can simply be too overwhelming. Even the cheapest solar or wind installations will cost billions of dollars to establish and operate.
Major economies such as the United States, China, Western Europe, and island countries such as Japan, United Kingdom, and Australia need to import large amounts of fossil fuels, because of this centralized energy production system. Low efficiency during energy production means more fossil fuels are burned which also unfortunately means more pollution. On the other hand, islands such as Hawaii and the Philippines burn diesel to produce electricity, making the electricity very expensive.
What do you believe is the solution to these problems?
We at our company believe decentralization is the solution for energy-dependent developed and developing countries and islands. In the developing world, there is no need to run infrastructure to every village in a 1000 mile radius when instead you can provide a small, reliable power station to each village, massively reducing both development and distribution costs. In developing and developed countries and islands, power stations can be built at locations where energy is needed thereby bypassing the 100% price mark-up of the electricity grid and saving consumers over $1 trillion annually. Additional immense savings can be added with the use of electricity generation technology that operates with nearly 90% efficiency. This would save consumers another $1 trillion every year.
Are there more efficient technologies which can be successfully utilized for decentralized energy production?
The first hydrogen fuel cell was discovered in 1838, and dreams of hydrogen powering our lives have fueled futurists ever since. Combined heat and power technologies have been developed to operate with up to 90% efficiency, improving on an already high 60% efficiency of fuel cells. Micro CHPs, such as Ecowill by Honda which has been installed in 200,000 houses in Japan, provide heat and electricity.
Our company has built on this progress in hydrogen utilization and has developed the first scalable, compact and easy to deploy hydrogen generator, called the NanoHydrogen Generator System. The generator will provide cheap distributed power wherever it is needed, in a scalable form from any mode of transportation to a house, to a factory, and even to an entire city.
How does your generator system work and what makes it special?
To run, our generators require tap water, aluminum, and a small power source (50-150W, which can be drawn from a rechargeable battery like in a hybrid car, a small solar panel or a wind turbine). They produce zero emissions and promise an 80% reduction in energy costs. The generators produce 1 Gallon of Gas Equivalent for less than $1, which makes 1 kWh in energy cost less than 3 cents. To further offset the cost of production, the process produces aluminum nanoparticles as a by-product, and these nanoparticles can be sold as well. The market price of one kilogram of nanoparticles is approximately $100, which further decreases the price per watt. And there is zero pollution, since when hydrogen is burned, it turns into water.
We at H2 Energy Renaissance commissioned a nanotechnology laboratory at University of Louisville, to confirm the discovery of the new type of semiconductor nanoparticle, which we have since patented, and the discovery of a new type of chemical connection. The discovered nanoparticles have electromagnetic and anti-oxidation properties, and can be used as an additive in paint, plastics and glass to make these materials five times more scratch resistant. We speculate that they can also greatly improve battery and super capacitor performance and prevent corrosion.
The biggest advantage of the NanoHydrogen Generator System, however, is its near-infinite scalability and on- demand and at point of use installation – a unit can be shipped in a standard container and deployed in a day to provide clean renewable electricity and transportation fuel.
Are there any problems with today’s existing hydrogen production?
The majority of affordable hydrogen today comes from centralized production using gas steam reformation with greenhouse gasses as a by-product. The H2 Energy Renaissance generators can be deployed at hydrogen filling stations to produce fuel onsite. For transportation companies, the fuel from H2 Energy Renaissance generators will be up to 60% cheaper than gasoline and 4 times cheaper than hydrogen from gas steam reforming.
Your generator can be used a source of fuel in a 5 trillion energy market. It’s a big market. What is the segment that is most interesting?
The transportation segment. The NanoHydrogen Generator System can provide affordable hydrogen for delivery trucks operated by Amazon, FedEx, Walmart and Nikola. AC Transit in Northern California already operates a fleet of hydrogen buses and countries can follow this example and use hydrogen to power their public transportation.
Toyota, Honda, Hyundai, GM, BMW and Daimler, all part of the recently created Hydrogen Council, have pledged to help combat climate change and have singled out hydrogen and fuel cell cars as an important path forward, since hydrogen is a clean fuel and produces no CO2 at point of use. Therefore, H2 Energy Renaissance is certainly not alone.
The Breakthrough Energy Coalition led by Bill Gates, 28 other high net worth investors and corporations including National Grid, Engie, Total, Virgin Group and General Electric have committed to finding and fostering solutions to provide the world with clean energy. H2 Energy Renaissance adds an important new clean energy investment thesis and opens the door to an ecosystem of technologies to build upon the NanoHydrogen Generator System.
It’s about time we move on from expensive and inefficient centralized energy. Time has come for energy production decentralization.