Enapter AG makes modular electrolyzers, which run an electric current through water to create hydrogen that can store clean energy. On its own, the device can be used to power home appliances such as cooking stoves, but stacked together they can grow big enough to support a community grid.
In October, Enapter won the 1 million pound ($1.3 million) Earthshot Prize, founded by the U.K.’s Prince William, that supports technologies helping to fight global warming. The company started in Thailand in 2015, when German software engineer Sebastian-Justus Schmidt built a self-sustaining home using solar power and electrolyzers. Bloomberg Green caught up with co-founder Vaitea Cowan in London.
Bloomberg Green: So let’s talk about scaling up. You’re building a factory for mass production to be completed this year. Is that right?
Cowan: Yeah, Q4. That’s the ambition. By then, we want to have the machines moved in. It’s in North Rhine-Westphalia, so it’s northwest Germany next to the Netherlands border. We’re going to start by producing 10,000 units a month, which is how it begins and then it keeps growing.
BG: And I think I read that you’re already in 22 markets?
Cowan: So we’re in 44 different countries, actually. We’re quite strong in Europe. That’s a good market for us. And then we’re also quite present in Southeast Asia, as well as in Australia. I think the interesting markets that are growing as well are South America. So we do have some customers in Chile. And I think that the next big ones will be U.S. 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 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 started. But actually, the applications today are 30% storage, and it’s a little bit of residential, but a lot more large-scale storage solutions, whether it is for neighborhoods or for communities. And this is where we have, for example, 100 inhabitants in Malaysia, running on solar hydrogen storage solutions.
But then you have also the mobility topic, and that’s generating green hydrogen on site, skipping the supply chain of fossil fuels, and then refueling trucks or planes or cars or buses. And then you’ve got the industrial applications, which is generating green methane or green ammonia for containerships, for example, or for ammonia for fertilizers.
So when we first started, it was 60% storage. Now it’s 30% storage, 30% mobility, 30% industrial and other use cases.
BG: Can you tell me more about the funding sources for Enapter? I think the last round you got was from the German government? And then you also just announced plans to issue new shares.
Cowan: To scale up the production of our AEM Electrolysers and develop our megawatt-scale product, we have received support from the federal government. The German state and the EU are supporting particularly innovative aspects of the mass production. Besides the public grants, we finance ourselves like any other company by equity and loans.
Specifically, regarding our latest funding news, in a first step, 30 million euros ($33 million) will be placed via a private placement. In a second step, already existing investors and private investors will get the possibility to purchase new stocks under the same conditions. An additional 70 million euros are reserved for institutional investors.
BG: And are you seeing increased interest as a result of the war?
Cowan: The war in Europe is a tragedy. The focus on decentralized renewable energy should exist without this conflict. Enapter will make green hydrogen cheaper than fossil fuels by bringing the AEM Electrolyser into mass production and leveraging massive economies of scale. We are convinced that green hydrogen enables energy security and independence. However, there is no way for us to find positive takeaways from any war anywhere. We would rather see it not happen.
BG: How does how does the economic case for green hydrogen change with the price spikes that we’ve been seeing in fossil fuels? With the price of gas and oil going up so high, how does that change the business case for your product?
Cowan: I mean, ultimately, we need to drive down the cost to be cheaper than fossil fuels, right? Green hydrogen is competitive actually already with fossil fuels, depending on the market.
I think when we look at where is the business case for green hydrogen, it always depends on the location. And then in terms of the capex cost. Well, that’s what we’re working on right now. And driving down the cost and seeing when it will be competitive.
Bloomberg Philanthropies is a founding partner of The Earthshot Prize, and Mike Bloomberg serves as Global Advisor to the Earthshot Prize Winners.
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Jess Shankleman in London at email@example.com
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