UK-based fuel-cell technology firm Ceres Power is building a 1MW solid-oxide electrolyser that will become operational in 2022 as part of its efforts to expand its electrolyser division.

Last year, the firm raised £181mn ($238mn) from investors to expand its business. Around £100mn will be spent consolidating its position in fuel cells and £80mn on accelerating activity in its electrolyser division, including the establishment of a new test facility in collaboration with testing firm Horiba Mira.

The technical work on the electrolyser is happening at the firm’s facility in Horsham in southern England. When that is complete, the unit will be deployed at an as-yet undisclosed industrial site with a partner organisation.

Ceres’ growth strategy in fuel cells has been driven by licensing its technology to partners who manufacture cells, stacks and systems, principally German engineering firm Bosch, Korean conglomerate Doosan and Chinese engine manufacturer Weichai.

£181mn – Amount raised by firm for expansion last year

It is now looking to apply the same strategy to its electrolyser division, simultaneously expanding its network of partners.

“When we get into green hydrogen technologies we are in a different set of customers—industrial gas companies, oil and gas companies and energy companies,” CEO Phil Caldwell tells Hydrogen Economist, presenting the firm’s latest results.

The firm is pursuing these new commercial partnerships and hopes to make some announcements later this year, with joint development of commercial systems happening by 2024.

“Where there might be some overlap with existing partners is that the infrastructure we are putting in on the manufacturing side would be applicable to both [fuel cells and electrolysers],” Caldwell adds.

Unlike proton-exchange-membrane (PEM) electrolysers—which require very different technologies for fuel cells and electrolysers—solid-oxide fuel cells and solid-oxide electrolysis cells are very similar.

This means factories set up to manufacture fuel-cell technology licensed by Ceres could also manufacture electrolysis cells licensed by the firm.

Investing profits

The fuel-cell division of Ceres’ business on Wednesday reported revenues of just under £32mn, delivering profits of around £20mn—some of which will be used to fund increased R&D in electrolysis technologies.

Alongside anion-exchange-membrane technology, solid-oxide electrolysers are seen as one of the two chief electrolyser types that can rival the more established PEM and alkaline-electrolysis systems for green hydrogen production. Ceres says its technology could enable green hydrogen production at $1.50/kg.

IP protection

Caldwell says the structure of the firm’s partnership with Bosch in China—where the firm has laid out plans for two separate joint ventures in Shandong province—gives it some protection against intellectual property (IP) issues that have hampered technology firms in the region in the past.

“If you are going to enter China there is always a big IP risk,” he says. “But Bosch are going to be the majority owner of this manufacturing venture, meaning it is managed and controlled by them. We have a licence with Bosch, who in turn have the Chinese licence. That means we do not ever have to pursue Chinese companies over IP disputes in Chinese courts, where we would have no chance.”

Sector growth

Caldwell adds that the situation in Ukraine will only accelerate growth in the sector.

“There has been a lot of excitement around hydrogen and renewable energies in general, but then with inflationary concerns in the market there has been a bit of a cooling off,” he says.

“Unfortunately, now the whole energy security issue is back on the table and, ultimately, we have to shift away from fossil fuels that are controlled by a small number of players,” he adds. “Hydrogen enables that shift in the energy landscape.”

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Author: Tom Young