While electric vehicles have been getting all the hype in the drive to replace the internal combustion engine and journey to a greener future, there is an alternative that has even better eco-credentials – hydrogen power.
Although the development and take-up of hydrogen vehicles has been much slower than electric ones, many manufacturers believe that the technology is set to be the winner in the long run. If so, then companies that are investing in the hydrogen world, could be the right ones to be on board.
One of these is NEO and OTC Markets-listed PowerTap Hydrogen Capital Corp, which has its fingers in many hydrogen pies. PowerTap’s patented solution has been developed over 20 years and the company is now commercializing its third-generation blue hydrogen product.
Its wholly-owned subsidiary, PowerTap Hydrogen Fueling Corp is focused on the refueling needs of the automotive and long-haul trucking markets and is installing hydrogen production and dispensing fueling infrastructure in the United States.
There are currently under 100 operational publicly available hydrogen stations in the United States with most of the existing stations purchasing industrial hydrogen from industrial manufacturers and shipping hydrogen to individual stations via tanker trucks, so the opportunity to expand is vast.
But aside from powering vehicles, hydrogen could be used in many other areas and PowerTap has interests in a number of companies looking at using hydrogen power in the home and developing plastic-to-hydrogen reactors.
Proactive sat down with PowerTap Hydrogen Capital CEO Raghu Kilambi to learn more.
Proactive: So, PowerTap Hydrogen Capital is betting on the hydrogen revolution taking off. What timescale do you envisage for this to happen?
Raghu Kilambi: Well, we believe that this hydrogen revolution will become a reality in the next three to five years. What has occurred significantly within the market are that more and more hydrogen vehicles have been announced, particularly long haul trucks - we call them 18 wheelers in North America - and so that technology will transition with all the major truck OEMs, and some pure-play start-ups, launching hydrogen trucks in the next few years to replace diesel trucks, which are obviously very bad for the environment.
The challenge though is the lack of hydrogen fueling infrastructure globally. There are only a few 100 hydrogen fueling stations globally with under 100 in the United States, Thousands and thousands are needed over the next five years or so to meet the coming demand for hydrogen trucks and also, to an extent, hydrogen cars which are coming on the market.
So that's the big gap that PowerTap Hydrogen is seeking to fill by launching its very unique technology.
The company's patented solution has been developed over 20 years, and you are now commercializing a third-generation Blue Hydrogen product. So PowerTap obviously has great experience in the sector.
To clarify, PowerTap Hydrogen acquired the PowerTap technology a couple of years ago which was developed over 20 years with a large global patent portfolio supported by the US Department of Energy, Hess Oil, Renault, the French automaker, among others.
What we did is we have taken this technology forward with the second-generation product on the market. There are stations in the United States using the PowerTap technology and we are upgrading it to the third-generation product that will be launching in late 2022/early 2023 with initial stations in Northern California partnered with the Andretti Group, led by Mario and Michael Andretti of auto racing fame which owns over 100 stations in the Western US. We also have other station partners that we will be announcing in the near future.
Our technology allows us to make hydrogen on-site and dispense on site which is very unique within the industry. Most of the stations out there currently buy industrial hydrogen from chemical companies and ship them in on trucks. It's not very environmentally friendly or cost-effective. And so, the unique PowerTap solution, which has a small footprint, allows us to co-locate at existing gas stations and truck stops, make hydrogen at the point of dispensing, and then dispense it to hydrogen vehicles.
The company is currently undertaking a strategic review, which could lead to the spin-out of its PowerTap Hydrogen Fueling subsidiary. How is that developing?
We are actually looking at many strategic initiatives including joint ventures and strategic partnerships. Currently, the company is on the NEO market in Canada as our lead listing, however, we have applied to list on NASDAQ and are looking at several approaches to maximize shareholder value.
We are in plenty of discussions with international partners right now in Asia, Europe and elsewhere. And we expect in 2022 to announce more strategic initiatives, partnerships, and more customers for the PowerTap blue hydrogen solution that will allow us to maximize shareholder value.
Apart from the vehicles side, the company has stakes in a number of other hydrogen-focused technology companies such as AES Inc, which is developing a green hydrogen at-home unit, and FusionOne, which is looking develop a plastic-to-hydrogen reactor. How important is this diversity to the company?
It's very important. Hydrogen production is very much a geographic play, meaning that in certain markets, like the United States, blue hydrogen - which uses natural gas or renewable natural gas - is the most cost-effective solution. That’s because the United States electricity grid is quite behind most of the other Western countries in the sense that it is still mostly fossil fuel-based. So, electricity is actually quite expensive in the United States and that makes green hydrogen, produced by electrolysis, very difficult to implement cost-effectively in North America, in the United States particularly.
Exposure to the other hydrogen technologies, green hydrogen and such, is important because of the international partnerships I talked about earlier. There are opportunities for us in specific markets to use green hydrogen and to use white hydrogen, which is what FusionOne does, in certain geographies. Our main technology continues to be the PowerTap blue hydrogen technology, but we've made investments in other technologies to allow us to provide our global partners with an appropriate solution depending on the geography that they're in.
So, what do you think you yourself bring to the company as its CEO?
My background has been as a serial entrepreneur and investor for the last 30 years, and I've been involved in several areas pre them becoming mainstream, including the cloud computing space in the late 90s. And so, what I bring is, first of all, a firm belief that you have to completely move forward even when the mass market doesn't necessarily see an opportunity. When we acquired the PowerTap solution in 2020 not many people were talking about hydrogen even though it made a lot of sense, and that momentum is now increasing.
I also have tremendous experience in raising capital, buying companies, selling companies, and building management teams, most importantly. So, from my perspective, I have a long entrepreneurial experience in the capital markets and in operations, and my job is to put together the best team that I can and help them execute on their business plan. In addition, I can tap global opportunities and focus on maximizing shareholder value for our shareholders.
So, what should PowerTap Hydrogen shareholders expect in the near to medium term?
I think you'll see more developments in terms of commercialization plans both in North America and around the world. In addition, strategic partnerships, funders, and such as we've talked about. We've gotten a lot of attention in the marketplace in the last six months or so, and so were in many active discussions with international energy players, vehicle manufacturers, strategic investors and such like. And so, I think investors should look out for very exciting announcements in the near term to medium term that will show the progress we've made in commercializing our PowerTap third-generation product and then maximizing shareholder value.
People can go and visit powertapfuels.com and also powertapcapital.com for more information on our company. We're quite excited about the future of hydrogen and our role in terms of meeting the demand for hydrogen fueling infrastructure.
Contact the author at jon.hopkins@proactiveinvestors.com