Interview with Max Melnick of Cleantech Ventures for The Impact with our CEO, Jean-Louis Kindler.
Executive Insight: Executing International Green Hydrogen Projects
Max Melnick of Cleantech Ventures, LLC | The Impact | June 22, 2021
Ways2H’s CEO, Jean-Louis Kindler, explored how he addresses different sources of motivation around the world to move his waste-to-hydrogen system forward. His international presence in the energy community over the past decade has enabled him to understand rather well what pushes people to invest in change, and his insight appears to be a valuable component in improving saliency and orchestrating an aggressive transition to decarbonized energy generation.
It seems as though some market and financial environments hold back the physical advantages that some hydrogen systems have over other approaches. Do you feel as though you are frequently having to fight against or alter the policy environment to make hydrogen something that is more compelling in the US?
Our solution is to process waste and produce renewable hydrogen. So our natural market is waste processing companies, and potentially companies who need hydrogen or who want to sell hydrogen as a fuel for others.
Since our establishment, we were getting inquiries from companies in Europe who were primarily focusing on creating renewable hydrogen. The inquiries we were getting from the US were primarily companies that had an issue with waste. They were telling me they wanted a solution to replace landfills and incinerators. Europe was looking for this also; but, the primary mover here in the US used to be waste processing.
One of the ways this solution is paying for itself is because, as a waste processing company, you are getting tipping fees—so you have revenue on the waste process—but also you will be able to produce hydrogen and then I will have an absolute loop. Some people [in the US] are telling me, “Well, yes, but there is no market for hydrogen. We don’t know what to do with this, what is the point of producing hydrogen?”
What do you attribute this difference to? Is this something that holds back the potential of hydrogen, or is it a difference that will ultimately lead to the same conclusion?
Europe probably is—and I am not just saying this because I am European—but Europe probably has a higher environmental conscience, at least at a government level. That, alongside all the different policies and economic revitalization packages that the EU is putting together now to get out of the crisis was the result of the pandemic and enables [the EU] to take advantage of this situation.
On the other hand, we see a situation in the US where, let’s face it, the US as a country is addicted to oil. It is convenient and cheap, and it is a big aspect of the whole US economy.
What about oil seems to have more cultural traction in the US than in Europe?
I may be venturing into philosophy here, but I think in America there is great respect and liking for things that are efficient, convenient, and useful. And this is not a bad thing, this is just the way of American life. We hear we want to make our life easy, we want to make things convenient. And, to be very honest, even today in 2021, there is nothing more convenient than going to the gas stand and putting gas in your car.
While the US, in general, doesn’t seem like it is very advanced in the [green] economy—or at least it is a little behind Europe—I am [calling you] from California. [In California], we have almost 50 hydrogen fueling stations and 8,000 fuel-cell vehicles on the road. That is better than anywhere else in the world, so it is an interesting contrast.
Recently, in the US we have seen a lot of growth in the renewable natural gas sector and anaerobic digestion as an approach for dealing with waste. Do you think that digesters that create RNG are going to work alongside your system, or would it be a competitor?
There is a whole faction of chemically organic waste, which is food or ag waste, that is a natural feedstock for anaerobic digesters. The nature of our systems are good with feedstocks that are on the dry side.
Anaerobic digesters will not take wood, plastic, textiles, etc. They really will take food. So, both solutions are extremely complementary. And, it makes a lot of sense to me to be somehow deployed in parallel.
The digester systems today are pretty big. And It seems like one of the advantages of your system is its modularity. Is modularity a strategic advantage that Ways2H has over digesters?
More principally, there are plenty of reasons for that.
The first is when we start diverting waste from landfills. Think of how many miles or a piece of junk has to travel from your trash bin to the landfill? It goes into the first guy, it goes into your trash bin, garbage truck, transfer station number one, and sometimes transfer station number two.
The very first big strategic advantage I see with our systems is that because they’re small, they typically will be deployed on the first transfer station, meaning that you considerably reduce the logistics. Here in California, we are sending medical waste to Texas, which is 1,600 miles away. This is a very specific example that we should not take as a general rule, but [the absurdity is nonetheless clear]. There is an issue with waste logistics.
In 5-10 years from now, we will have solved the issues in hydrogen logistics, I’m convinced [But, today] it is still rather expensive to move hydrogen from point A to point B. So, having a local decentralized system, close to where the waste is being produced—which is naturally where there is human activity—and producing hydrogen on that site [indicates] that small decentralized systems close to where the waste is being produced are a perfect solution for something that the whole world is desperately looking for.
Our standard system can process approximately 24 tonnes per day. 24 tonnes of waste is 1.5 tonnes of hydrogen [in our system]. 24 tons of waste is roughly what a population of 10,000 to 15,000 people generates.
In a case with 13,000 people, at 1.5 tons of hydrogen per day, you could fill 300 Toyota Mirai’s [per day]. Typically, someone will go to the bank once every 10 days. This means that with 1.5 tonnes of hydrogen production per day, you can serve about 3,000 vehicles. 3,000 vehicles are more or less the number of vehicles being owned by a 10,000-person population.
So when I say circular economy, I mean that a population of 10,000 generates the waste that is just the right amount to power the vehicles that are owned by these 10,000 people.Jean-Louis Kindler
My understanding is that steam methane reformation (SMR) is the primary approach for hydrogen generation today. If there is to be a facilitated transition to more renewable generation approaches for hydrogen, are we going to need to decouple the current association between natural gas and hydrogen? Or will eventually the economics of renewables outperform the economics of natural gas-steam methane reformation?
This is where I am more American than European. The market will take care of this. Right now, using natural gas is much better than using fossil fuels in terms of greenhouse gas and environmental impact. Fine, let’s use it. It is cheap. It will make the transition smooth and easy, and not too painful for the average consumer. While this natural gas use will go on for quite some time, the other hydrogen production solutions will come, they will mature, and they will reach some price level where they will be competitive and where they will have specific advantages compared to natural gas.
Since the United States is a large oil producer, there is self-sufficiency in terms of energy. We produce, or we have the potential to produce 1 billion tons of biomass. There is a report by the DoE called the Billion-Ton Report. Well, one billion tons of biomass is 50 million pounds of hydrogen. If you compare with the equivalent tank to real efficiency, it is the equivalent of 90% of the gasoline being consumed in the US today.
I do not mean to say that all billion tons will go into hydrogen production. What I am saying is that with green hydrogen (renewables powering electrolysis), with hydrogen from biomass and waste, and with hydrogen produced from biomethane reforming, we have more than enough resources to fuel the whole economy. Transportation, energy, power, everything.
How should the market handle the “chicken or the egg” issue concerning hydrogen in the U.S.? My understanding is it is very difficult to match supply and demand, especially at a large scale. Do you have any insights about how the States should go about handling this transition/integration? Do you have any suggestions on a policy or financial environment change?
This is where we have another cultural difference between the US and Europe.
The United States is the country of free enterprise and of the government trying to interfere as little as possible with companies and the economy. Europe—though people will say it is a network of socialist countries—is planning some government policy that is going a little deeper into the economy and different sectors/industries.
It is a difficult situation here in the US because of that, but on the other hand, I think we are seeing all sorts of initiatives here. Today, with the Biden administration pushing hydrogen, renewable/clean energy, and electric vehicles, the sector will get big political and financial support for the deployment of this infrastructure.
Of course, it may not go smoothly as it may be very difficult. Think about it. We’re talking about a major transition from a fossil-based economy to a renewable energy-based economy. This is huge, it cannot be done in one or two years. Even when we say it’s going to take 20 or 30 years, I think we are being optimistic. It will probably take longer than that. But, that is the way it is. It cannot be simple. Because you are right, it means to balance demand and supply but it also means having all the stakeholders from this whole value chain being in the market and having a commercial solution.
This is why I was telling you that we are starting to build hydrogen refueling stations, but the hydrogen logistics are not that easy. And, there is a big problem with hydrogen today. Still, a significant fraction of the hydrogen we are using here [in California] is not renewable. So, if you think too binary or radical then you will say that you will not want to use hydrogen because it is not renewable. To put it plainly, I think this is wrong.
We need to use hydrogen regardless of where it comes from because it helps establish the infrastructure. And gradually, as we do better and as technologies develop and evolve, we will increase the share of renewable hydrogen to a point where at some point in time we will hopefully be 100% renewable. Think of the time between the first automobile and the Ford Model T. There was, what, 30 years? There were still people using horses and carriages. While some others were driving Ford Model Ts. So, this transition will not be overnight.
So what do you want to see happen in the States to reach your next milestone? How can the States enable this transition to occur in the best way possible?
It is a very challenging question, but I will answer it in a very simplistic way. This is probably the only approach at this point: Let’s pass this infrastructure bill.
That is the first thing. This infrastructure bill is all about infrastructure investment, including renewable energy production. That is what we need. What is needed is policy and financial support from the government to complement the traditional energy infrastructure and financing pathways. I am talking about banks. They are still a little chilly when it comes to renewable energy unless it is solar because solar has been around for decades and they understand it. So let us pass this infrastructure bill and add something less general that is more specific to our industry, waste to hydrogen. Make the waste processing regulations more transparent.
Every state has its regulation with regards to waste processing, and those regulations I must say are a little outdated.
Thoughts and Outlook
The next 30 years will be a period where humanity’s greatest engineering feat of the 20th century, the energy grid, will change at a scale that has yet to be rivaled. To execute this transition with minimal floundering, the private companies, governments, and financial institutions should focus on understanding and appealing to cultural incentives, work alongside complementary energy systems, and should expect a certain degree of chaos that accompanies any massive undertakings. To ensure the best possible outcome for the sake of longevity, each of these matters should be investigated thoroughly.