Powerhouse Energy Group PLC (AIM:PHE) is one British company that could be poised to benefit from a global hydrogen push.
In an exclusive interview, its chief executive Paul Emmitt told Proactive that he plans to produce hydrogen made from waste sources commercially as early as 2026, as Powerhouse moves to scale up capacity.
At this year’s United Nations’ climate negotiations in Dubai, countries are expected to pledge to increase the amount of hydrogen produced globally in a bid to help curtail emissions and support a sustainable path to net-zero.
A total of 39 countries agreed to endorse a global certification standard for low-carbon hydrogen as part of a United Arab Emirates Hydrogen Declaration of Intent that is expected to enable global trade of the fuel.
The summit took place at the sidelines of the event in Dubai on Thursday, in the Climate Action Innovation Zone, where corporations and world leaders negotiated which mutual standards would be required to expand hydrogen production.
Emmitt is hoping that leaders will change the requirements for hydrogen production to allow producers to make the fuel from non-recyclable waste.
He argues that companies like Powerhouse Energy can form part of a ‘circular economy’, producing a source of hydrogen from waste while providing heat and power for local homes and businesses.
“We want to see a change in the feedstocks that are acceptable for Low Carbon Hydrogen, the world needs to wake up to the very real reality that we have both a waste and an energy problem that both equally need addressing for a future Net-zero,” he said in an interview.
The UK government has been lambasted for permitting so-called blue hydrogen produced from fossil fuels under the low carbon hydrogen standard communicated in April 2023, but does not permit the use of non-recyclable plastics to make the fuel.
While hydrogen from electrolysers costs approximately £13 per kilogram, utilises large amounts of water and produces a ‘sludge’, Powerhouse claims it can potentially produce it at less than half that cost.
Stabilisation
Emmitt said Powerhouse is now focused on stabilising its management team following the debt-free purchase of engineering consultancy EngSolve for approximately half a million pounds.
The acquisition provides Powerhouse with its own in-house engineering capability along with the ability to grow revenue through providing industry-wide engineering services.
“What we need really is the first commercial facility, and that's what my focus is on since I've taken over,” Emmitt said.
He will be focused on building out the management team, increasing specialisation in areas such as sustainable transport fuels as it moves towards product innovation that could help it expand into markets other than hydrogen.
Proven hydrogen from waste
The company demonstrated in 2018 that it can produce hydrogen, power and heat from a live, operational demonstration plant at the Thornton Science Park in Chester, with an efficiency of around 80%.
Emmitt said he expects the company’s first commercial-scale project, one that will be Powerhouse’s own, will be developed in a hydrogen hub in Northern Ireland in Ballymena by around 2026, pending planning and permits.
“The key to the market for us is securing the offtake of the hydrogen,” Emmitt explained, adding that until the hydrogen market materialises at scale, securing such agreements will remain complex but not impossible.
"I think the government is changing the landscape all the time and constricting absolutely critical Hydrogen markets whilst in their infancy, via ineffective policy.”
The developer has already engaged with potential off-takers for the hydrogen from that project, for example transport companies, grid operators and local industries, in Northern Ireland’s hydrogen hub in Ballymena.
It is now negotiating an option on a plot of land for that project and has entered discussions with companies about various feedstocks.
Pathway to commercialisation
Emmitt said that if everything goes to plan, with the positive backing of the council, its Ballymena project could get planning approved and complete a Front End Engineering Design by the end of quarter two next year.
Commercialisation could be 18 to 24 months away from there, he said.
Powerhouse has hit potential delays to another project in Bridgend after its technology supplier went into liquidation, but Emmitt said he has an alternative equipment provider lined up if discussions with liquidators fail, expressing hope that the project could stay on track.
Powerhouse has demonstrated that it can use a tonne of non-recyclable plastic waste to produce hydrogen in a proof-of-concept project in Chester, with commercial designs having undergone a third-party review by GHD engineering consultancy and DNV.
“We have a proven process that in reality is very scalable, up to the size that we want to take it to, I think this is key,” said Emmitt. “The whole ethos of Powerhouse is that it's a distributed model generation process.”
Emmitt said he plans to more than double the size of the proof-of-concept project in the imminent Feedstock Testing Unit (FTU) at its technical centre in Bridgend.
The FTU will utilise 2.5 tonnes of waste a day and be able to produce around 200kg of hydrogen.
A commercial project would produce up to 3 tonnes of hydrogen output from 40 tonnes a day of non-recyclable waste, diverting a significant amount of carbon from the atmosphere in the novel process.
“What we have decided to do is be more focused on our own projects, bringing the technology back into Powerhouse rather than giving away exclusivity for it, this puts the power back in our hands to get our first project off the ground,” Emmitt said. “And that's where we sit today.”
Emmitt said the company also remains in discussions with existing partners such as Hydrogen Utopia International PLC (LSE:HUI, OTCQB:HUIPF) and that the progress of that project, in County Longford in Ireland, will depend on whether more favourable terms can be negotiated for the joint venture.
Where Powerhouse differs from other producers is that it doesn’t convert plastic into oil, instead using heat to treat plastics (and other non-recyclable wastes) to produce a syngas, a mix of hydrogen, methane and carbon monoxide.
Other waste source materials that Powerhouse’s plants can use to produce hydrogen include rubber tyres, where the business originally planned to operate, as well as the plastic parts of used cars, and plastic wastes from anaerobic digestion.