Dr Rebecca Lovell discusses the advancement of hydrogen
fuel cell technology, its adoption by industry leaders and how IP
rights can be used to drive investment.
When it comes to news about climate change and global initiatives to ditch fossil fuels for zero carbon alternatives, batteries have dominated the headlines over the past decade. But during this time, another technology sector has been quietly growing and maturing to the point of readiness for large scale rollout: the hydrogen and fuel cell sector. Fuel cells use a catalyst (often platinum) to convert hydrogen into electricity, emitting only water vapour as a by-product. They can be used as an alternative to combustion engines or batteries in a wide range of power applications – from cars, trucks and buses to stationary power for buildings, lighting and construction.
Unlike battery electric vehicles (BEVs), fuel cell electric vehicles (FCEVs) retain many of the advantages of conventional petrol or diesel vehicles, such as short refuelling times and long range. Although several FCEV passenger cars are currently available, such as the Toyota Mirai and Hyundai Nexo, the main focus for FCEVs is currently in heavy duty applications such as mass transit and haulage or in very lightweight applications such as drones, where existing battery technology struggles to meet the necessary requirements for weight, range and re-charging times. Marine and aviation fuel cell projects have also got off the ground recently, boosted by investment from incumbent manufacturers such as Airbus. Hydrogen itself has a variety of potential applications outside of fuel cells, such as in the national gas grid to decarbonise heating and in steel manufacturing. It is therefore clear that hydrogen and fuel cell technologies hold a huge amount of promise as a solution for decarbonising transport and other industries.
The commercial viability of fuel cells has long been derided and dismissed due to the various challenges historically associated with hydrogen (how do you produce it? how do you store it? isn't it explosive?). Fortunately, safety standards have come a long way in the 80-odd years since the Hindenburg disaster, and modern hydrogen cylinders for use in FCEVs are incredibly robust. Toyota, for example, tested the safety of the cylinders in their Mirai passenger car by firing .50-caliber bullets at them from point blank range, resulting in zero infernos. Production techniques have also advanced at a rapid pace since the turn of the millennium, overcoming a major hurdle in the race to achieve widespread adoption of hydrogen technologies. Until recently, the only cost-effective way to generate hydrogen at scale was by steam reforming methane, which emits carbon monoxide as a by-product – not exactly the greenest process and certainly not zero carbon. Although carbon capture solutions may be used in conjunction with steam reforming to prevent release of carbon monoxide into the atmosphere (so-called "blue" hydrogen production), improvements in electrolyser technology – and in particular the increasing availability of cheap renewable energy – has meant it is now economically viable to produce massive quantities of green hydrogen by electrolysis of water.
This has made hydrogen and fuel cell technologies a highly attractive prospect for governments and industries looking to meet carbon emission targets and reduce their environmental impact. In 2020 we saw a particular surge in interest in hydrogen, with countries such as Spain and Germany each committing €8billion funding to green hydrogen projects, and the European Commission publishing its "Hydrogen strategy for a climate-neutral Europe" in July 2020, with a target of delivering 10 million tons of renewable hydrogen by 2030 and cumulative investments of €180-470 billion by 2050.
The value of shares in fuel cell and electrolysis companies like Ceres Power, Plug Power and Nel Hydrogen soared between September 2020 and January 2021, as investors took note of huge deals with household names such as Bosch, Renault and Royal Dutch Shell. Underpinning these partnerships and joint ventures are strong IP rights, which ensure that a larger business partner cannot simply walk off with technology that the other partner has created. However, different hydrogen and fuel cell companies have utilised their IP in very different ways. ITM Power, for example, makes use of its own electrolyser IP to manufacture products and sell directly to industrial customers without a middleman, gradually scaling up production volume and reinvesting the profits into building a gigafactory in Sheffield. University spin-outs such as Ceres Power and Bramble Energy, on the other hand, license out their fuel cell patents to partners who already have large scale manufacturing capacity, both in the UK and internationally, avoiding the need for substantial capital investment in factories and tooling. In the transport sector, several (predominantly Japanese and South Korean) firms such as Toyota and Hyundai have invested heavily in fuel cell R&D for many years and built up a large patent portfolio in this area, while firms such as Honeywell have recently added hydrogen IP to their repertoire by acquiring upcoming fuel cell companies and subsidiaries.
Exclusive IP rights have therefore been a boon to owners of growing hydrogen and fuel cell businesses looking to attract private investment, form lucrative partnerships with big multinationals, or sell their business on to a larger manufacturer. The trans-national nature of many of these deals and partnerships has also highlighted the need to carefully research which markets may be important in the future and to apply for IP rights in those countries at an early stage, where feasible. It is an exciting time for the hydrogen and fuel cell industry, and many traditional manufacturers are now seeking to buy in for a piece of the action. Therefore, as the hydrogen and fuel cell industry continues to grow, due diligence in contracts and IP rights will remain crucial to ensure that innovators are duly rewarded and achieve the maximum return on their investment in developing these new technologies.
This article first appeared in Energy Engineering - Issue 88.
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