Enapter AG manufactures modular electrolysers, which pass an electric current through water to create hydrogen capable of storing clean energy. Alone, the device can be used to power household appliances such as cookers, but stacked together they can become large enough to support a community network.
In October, Enapter won the £1 million ($1.3 million) Earthshot Prize, founded by Britain’s Prince William, which supports technologies that help fight global warming. The company started in Thailand in 2015, when German software engineer Sebastian-Justus Schmidt built a self-sufficient house using solar power and electrolysers. Bloomberg Green caught up with co-founder Vaitea Cowan in London.
Bloomberg Green: So let’s talk about scaling. You are building a mass production factory which will be completed this year. Is it correct?
Cowan: Yes, Q4. It is ambition. Until then, we want to move the machines in. It’s in North Rhine-Westphalia, so it’s northwest of Germany next to the Dutch border. We will start by producing 10,000 units per month, that’s how it starts and then it continues to grow.
BG: And I think I read that you are already in 22 markets?
Cowan: So we are in 44 different countries, actually. We are quite strong in Europe. It’s a good market for us. And then we are also quite present in Southeast Asia, as well as in Australia. I think the interesting markets that are also developing are South America. So we have customers in Chile. And I think the next big ones will be the United States and India. And of course, Africa is a whole market that we want to support not only from an energy storage perspective, but also from a clean cooking gas perspective.
BG: But do you mainly supply homes?
Cowan: When we look at our use cases, residential is one thing and that’s where our story began. But in fact, applications today are 30% storage, and it’s a bit residential, but much more large-scale storage solutions, whether for neighborhoods or for communities. And this is where we have, for example, 100 inhabitants in Malaysia, operating with solar hydrogen storage solutions.
But there’s also the subject of mobility, and that’s generating green hydrogen on site, skipping the fossil fuel supply chain, and then refueling trucks, planes, cars or buses. . And then you have industrial applications, which generate green methane or green ammonia for container ships, for example, or ammonia for fertilizers.
So when we started it was 60% storage. Today, it’s 30% storage, 30% mobility, 30% industrial and other uses.
BG: Can you tell me more about Enapter’s funding sources? I think the last round you received was from the German government? And then you also just announced your intention to issue new shares.
Cowan: To increase the production of our AEM electrolyzers and develop our product at the megawatt scale, we received support from the federal government. The German state and the EU support particularly innovative aspects of mass production. In addition to public subsidies, we finance ourselves like any other company through equity and borrowings.
Specifically, regarding our latest funding news, initially, €30 million ($33 million) will be placed through a private placement. In a second phase, existing investors and private investors will have the possibility of acquiring new shares under the same conditions. An additional 70 million euros are reserved for institutional investors.
BG: And do you see an increased interest following the war?
Cowan: The war in Europe is a tragedy. The focus on decentralized renewables should exist without this conflict. Enapter will make green hydrogen cheaper than fossil fuels by bringing the AEM electrolyzer to mass production and leveraging huge economies of scale. We are convinced that green hydrogen enables energy security and independence. However, there is no way for us to find positive lessons to be learned from any war, anywhere. We would prefer that not to happen.
BG: How is the economic case for green hydrogen changing with the price spikes we’ve seen in fossil fuels? With the price of gas and oil soaring so high, how does that change the business case for your product?
Cowan: I mean, at the end of the day, we have to reduce the cost to be cheaper than fossil fuels, right? Green hydrogen is actually already competitive with fossil fuels, depending on the market.
I think when we look at where the business case for green hydrogen is, it always depends on the location. And then in terms of investment cost. Well, that’s what we’re working on right now. And bring the cost down and see when it’s competitive.
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