NEWS

Positive steps keep Next Hydrogen on path to commercialization

22 October 2024

https://nexthydrogen.com/Technology testing continues as Mississauga firm aspires to begin electrolyzer sales

Tests for Next Hydrogen Corp.’s electrolyzers are proceeding as planned, putting the Mississauga-based company on track to commercialization, according to its chief commercial officer.

Next Hydrogen designs and manufactures devices that split water into hydrogen and oxygen using clean energy.

Unlike its peers, its technology is designed for intermittent energy sources, CCO Robert Campbell said in an interview with Sustainable Biz Canada, better preparing for a future which will be increasingly powered by solar and wind energy.

Over the summer and early fall, the company was contracted by the University of Minnesota to help produce renewable ammonia, satisfied a quality check for its electrolyzer module, and completed a durability test for its electrolysis cells.

“With the foundation of showcasing our technology through the factory acceptance test, we’ll be able to showcase a complete solution to our customers with the advancements in our technology in gen(eration) three,” for applications such as green ammonia production, Campbell said.

Even with reports of a slowdown in the hydrogen sector, which has been promoted as one option for decoupling heavy industry from fossil fuels, he remains positive about its long-term potential.

Moving forward on testing

With the University of Minnesota, Swiss fertilizer company Casale SA and research institution RTI International, Next Hydrogen is exhibiting its third-generation electrolyzer with the support of the U.S. Department of Energy. The collaboration is its first U.S. project and is scheduled to be operational in 2025.

The production of ammonia from green hydrogen is being tested for uses in the energy and agricultural sectors. Ammonia has been proposed as an alternative fuel for heavy industry and transportation, as well as being a critical fertilizer, but is mostly made from natural gas today.

Hydrogen would be a less carbon-intensive alternative.

The U.S. project is a “key reference site” for the efficacy of Next Hydrogen’s technology, Campbell said, and can accelerate its sales potential.

In September, the completion of the extended factory acceptance test of its second-generation electrolyzer module was announced. Described as a very important step before the company can ship its product for installation, Campbell said the final quality check ensures market specifications are being met.

“It’s a big milestone for us in that it’s really tied to the market application of that product going into service . . . It’s signalling to the market we’re transitioning from a development company to a commercial company.”

The electrolyzer module is being commissioned in the Toronto area on a site that hosts hydrogen refuelling infrastructure. There, the plan is to ensure the equipment meets requirements of the project, and if it does, to produce hydrogen fuel.

Then in October, the company unveiled it had finished an extended durability test of its second-generation electrolysis cells. Campbell noted fuel cells degrade in performance over time, so determining the life span is a crucial detail.

“Customers want to have confidence in the technology that it performs well and has a predictable lifetime so they can model it appropriately for their investment decisions.”

Next Hydrogen is very satisfied with the results, he said, which are meeting expectations.

This spring, the company announced reaching a milestone in energy efficiency, a partnership with General Electric Vernova Inc., and supplying an electrolyzer to Casale.

Next Hydrogen’s plans for 2025

Compared to its Q1 financials, Next Hydrogen had half as much cash on hand ($5.4 million) and ran at a bigger loss of $1 million in Q2. However, it did generate $1 million more in revenue.

The company's cash consumption is in line with expectations, Campbell explained. However, the financials show the need to start generating cash flow, which makes more capital raises and reaching commercialization crucial to Next Hydrogen, he said.

He highlighted a $2-million grant from the Federal Economic Development Agency for Southern Ontario as an example of the government support it has received to date.

Laying out the business plan, Campbell said Next Hydrogen is seeking new opportunities in Canada and the U.S. thanks to the helping hand from investment tax credits for green hydrogen offered by governments.

The expectation is to sell electrolyzers to industrial, petrochemical and methanol companies to produce hydrogen for clients in transportation, for example. Another potential customer base is renewable project developers in Atlantic Canada which are incorporating hydrogen production.

For export markets in Asia, Africa and Europe, Next Hydrogen is developing a regional partnership model. Turkey is of particular interest because it serves as a bridge between Europe and the Middle East.

In 2025, Campbell expects to complete the tests and announce new projects and regional partnerships. The third-generation electrolyzer will also be scaled up; Next Hydrogen plans to have a demonstration model ready by 2025.

Readying for the uncertain hydrogen market

Campbell maintained his belief hydrogen will be a major force behind decarbonization, even as industry observers find signs of a grinding slowdown, and Canadian peers like Ballard make significant layoffs.

He urged patience, saying the high cost of hydrogen fuel will be addressed as more renewable energy is activated and green hydrogen projects are completed. The volatile blend of a high inflation environment, global conflicts and the uncertainty of elections (particularly the upcoming U.S. presidential vote) have hobbled the industry, he outlined.

But Campbell sees hydrogen production increasing and receiving sustained policy support. Companies in India, China, North Africa and Australia are making large investments into hydrogen, he said as an example of the international interest.

“It takes planning, engineering, investment. All these factors have to come together to enable those outcomes.”