This week Chris and Johan are joined by Nicolas Crettenand who is in charge of operations at hydrospider. The company has a subtle business model by which they supply Switzerland’s fuel cell lorries with hydrogen. They discuss the advantages over batteries and the chicken and egg problem of hydrogen. Listen in to find out why Switzerland is a perfect home market and what this has to do with the heavy-duty tax on lorries.
Link to Hydrospider AG:
https://hydrospider.ch/en/
This week Chris and Johan are joined by Nicolas Crettenand who is in charge of operations at hydrospider. The company has a subtle business model by which they supply Switzerland’s fuel cell lorries with hydrogen. They discuss the advantages over batteries and the chicken and egg problem of hydrogen. Listen in to find out why Switzerland is a perfect home market and what this has to do with the heavy-duty tax on lorries.
Link to Hydrospider AG:
https://hydrospider.ch/en/
Broadcasting from the commodity capital of the world, Zurich, Switzerland, this is ‘Insiders Guide to Energy’.
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| Timestamp | Speaker | Transcript
| 12:46.80 | chrissass | Welcome to insider' guide to energy I'm your host chris sass and with me as always his co-host Johann obergt yohan how's it going this week
| 11:28.18 | Johan | It's another great week chris as always and by the way welcome back from london last time we spoke you were in in London having a good time.
| 13:19.29 | chrissass | Yes, I was having a good time I got to see my customers face-to-face and and I can't tell you how many of them said they're so happy to actually see someone come into their office and talk to them as opposed to be doing it as we're doing this interview right now on a screen. So. It's been pretty productive. Um, and it's been interesting getting in and out of London with all the energy woes that some of the traders have been having particularly in the U K I've noticed.
| 12:02.80 | Johan | No, it's true. We have the same thing we we just ended up an event in in prague this week which is on trading physical events are taking off a little bit. We're back on track. Good news from germany I think it was. Just recently they came out and said that I wouldn't say it's over. But at least it's now controllable. So as you know Sweden was quite quickly to go back to saying that now we're back to normal if they ever were in in some kind of covid lockdown but it's it's hope I think it's. Good and and and it also looks at business. We're seeing more and more activities we see a more and more lead generation more marketing activities piling up so more work for us but looking forward to that.
| 14:31.89 | chrissass | Yeah I haven't seen so much recently of covid impact in the business as much as traders and and gas prices. Um and energy prices I think that's been more of a distraction from my customer base because I'm more on the trading side of the business. Um, and the risk exposure that that folks are at right now. So depends what kind of bets their traders made and where they are and what kind of liquidity they have. But I think that's been more of what's keeping people up at night these last couple weeks than than covid I mean I think they've come to reality of what Covid is I think there's a new new reality the u k on. Fortunately, it was trending the wrong way and when I was there. The news was all talking about potentially new measures coming back to the uk so whereas the rest of things have opened up in the trade show I went to in London about 3 weeks ago and we did a live show from there I don't know that in 3 or 4 weeks that you'll still be able to do all that there. There's some question of that happening. But. Really not the subject of insider's guide to energy. So what? I'd rather talk about is hydrogen. Perhaps I think that might be cool.
| 13:43.79 | Johan | No. I heard something about it. Someone mentioned whispered in my ear that this is something to talk about jokes aside I think the hydrogen is of course is is is a massive topic. We've had a couple I think we touched on it a few times in the show. We mentioned it here and there. But. Maybe not really as a key topic and for me, it's also very very interesting to see how that attaching to other industries as you know from from the commercial side and the ecosystems of all this how how energy also affects parts of outside of of our our industries and. Course with Hydrogen especially than folks on automotives. But you know what? as always, you know we can sit here and talk forever. But that's not the show either. So what I would like to do then is welcome. Our guest on the show today. It's Nicholas kretenant and. Apologize for my my french pronounation I hope that was pretty all right over my he's head of operation for a yeah company called hydro spider who is focusing on Hydrogen of course and but also some really really interesting collaborations in the automotive industry welcome to the show nicholas.
| 16:44.59 | Nicolas | Thank you John thank you chris.
| 15:04.51 | Johan | Good to have you on. Obviously we had a bit of a pre-chat in the conversation. We did some research on you as we do for all of our guests. But for the guests that are listening to the show today. Maybe a little bit of background who who are you. And who is hydro spider.
| 17:07.46 | Nicolas | So I started with hydro spider this is a joint venture between swiss utility alpi hydrogen pioneer called h 2 energy and the linda group they pull together to create the business that produces Green hydrogen would then get back on the different types of hydrogen. So. We do Green hydrogen we produce it. We trade it and we bring it to fuel stations that are equipped with Hydrogen pumps so that today forty 6 hydrogen lorries are driving around in Switzerland in a partnership with he Andai. So and hydro spider was created 2 years ago I joined a year ago we had the first lorries on the seventh of October last year on the road we had the first fuel station by the end of this year where we be at 10 different fuel station across Switzerland so we're just at the beginning of a journey. And we can then talk more about the ecosystem. Why is that possible in Switzerland and I joined hydro I joined a year ago for the operations to also help on the whole system design scale up setting up the the supply chain on also new hydrogen production sites in the Swiss french b.
| 16:25.43 | Johan | But yeah, go on please.
| 18:24.25 | Nicolas | Speaking part my background is civil engineer I worked now over 15 years and mainly in the energy sector in switzerland and a lot in Africa mostly on renewable energy hydropower other renewable energies productive green mini-grids to bring power to communities and create jobs that was in africa. Also did a ph d on the question of decentralized energy storage and how do you have to shape policy and regulation to to develop it.
| 17:09.43 | Johan | Really interesting and you know it's always interesting to hear people with with with the right background that that and a slightly different background to my own. So so I have a lot to learn but maybe for me and and i. For some of our guests if we go back? A just take 1 step back and and and you mentioned that the the green hydrogen before we go in and talk about the ecosystem. How do we deploy it to to the industries etc. Can you just give us a snapshot of what is the Green hydrogen.
| 19:24.40 | Nicolas | So what makes hydrogen green is the way you produce it so that the the energy you use to produce it is from a renewable energy sources so Hydrogen is an energy vector it's not an energy Source you have to to produce it now Today 90 six percent of hydrogen is produced emit emitting emissions c o 2 emission. It comes from natural gas from coal. It comes from fossil fuel where you get through different process. You get the hydrogen is used mainly ah in the industry and in the agrobusiness also for fertilizers. Now if we want to decarbonize our society then firstly we have to decarbonize the use of hydrogen today but we have also to look at where hydrogen if it's decarbonized and green can also be a substitute to fossil fuels today and that brings us to the mobility. And we started to produce green hydrogen in Switzerland using and hydropower plant of Alpic. So we take the electricity directly from the generator in the power plant. It doesn't go integrat it goes directly to us is green electricity and then we use water and we. The water into hydrogen and oxygen and that's the green hydrogen produced because this energy source to create it. It comes from renewable energy sources in that case, it's hydropower.
| 20:46.68 | chrissass | And how do you track that do you put is there any way of tracking. Ah the green element throughout the whole supply chain. Is it going to a blockchain this was created or what do you do to say this is different than other hydrogen that someone could buy.
| 21:01.40 | Nicolas | Because we physically can come and see our installation and it's connected to a hydropower plant and we'll take the electricity not from the grids on but really from the power plant so we can track it up back. We don't have blockchain or things like that. It's just.
| 21:15.54 | chrissass | But did did you say you trade as well. Your company I think you said in your introduction that you also trade hydrogen. Okay, but at that point it's still at the point where it's word. Um word of mouth and invalidation.
| 21:20.68 | Nicolas | Yeah, so we buy it from other people producing Green hydrogen.
| 21:33.58 | chrissass | Rather than some tracking in in the trading systems.
| 21:35.12 | Nicolas | So it's different ways either. It is an installation where like in our case with the Lpe hydro power plant. It's the own so-called own consumption of the power plant. So it doesn't go into the grid but it is you can account for at the power plant that this production went into. Hydrogen production. So that's 1 way the second way is that you are linked to the power grid and therefore you will buy green ah electricity certificates for the amount of electricity. You consume to produce the hydrogen which also makes it green And lastly, we also on the project where we'll use wood. So biomass and that's another process to produce hydrogen called pyrolysis and therefore you will use wood and transform wood in Bio charcoal and hydrogen. So on there, you don't need certificates neither because it is the real wood that you transform into hydrogen and you can track it back. There.
| 20:49.00 | Johan | So an interesting interesting setup if you look at the hydrogen as as a whole and I think clarified also a little bit just between the green and and the maybe the non green of hydrogen which which has always been the question. Ah. So now we have it and then hydra spider came around ah how how did that start? How did you choose the first kind of deployment areas of of the height of the green Hydrogen. So you have produced it and now what.
| 23:03.27 | Nicolas | So so we have to go a few years back where h 2 energy a shareholder of hydro spider the pioneer in Switzerland convinced that hydrogen green hydrogen has the key role to play in the energy transition. Started a pilot of producing green hydrogen with a small hydropower plant and for 1 fuel station that had a hydrogen refueling station fits in the first 1 and there were just 2 lorries driving around so it was kind of the proof of concept. It works. But then you come to the problem of the chicken and egg. So either. We start to produce green hydrogen but we don't have the offtaker or you bring the demand but they will not deploy for example trucks if they're not sure to have the fuel for their trucks. So it was the chicken and egg problem and h 2 energy managed to solve it.
| 21:54.21 | Johan | Um.
| 23:54.80 | Nicolas | By firstly going to different the Lori producer and in the end it was he and I who committed for now we're talking about the Thousand 600 hyron trucks coming by end of 25. They committed to come with an amount of trucks to switzerland and then. Um, the other sideage drain energy approached electricity utilities in Switzerland to say look the demand is coming who is going to help us to produce the green hydrogen and then that's when alpiic got on on board and when then h twogen alpe formed the joint venture to create hydro byider. To produce the initial green hydrogen for the first loris and that's where we are today we can with our own installation which is a 2 Megawatt equivalent electrolizers. We can produce hydrogen for about forty to fifty trucks of of he and I so it is in the beginning is about How do you create the demand and supply and grow together. But you need to coordinate. It.
| 23:08.28 | Johan | So so was this ah was this a natural thing of you have the energy was it a natural thing to focus on trucks or because you could use it for a number of different areas.
| 25:05.16 | Nicolas | So it was to say if you have 1 kilo of hydrogen and you want to see in which process you use it in order to avoid c o 2 emissions then mobility is very high up so you will will save like 10 to fourteen Kilos of c o 2 per kilo of hydrogen that you said. For cars and also for loris so that was then to say okay, that's a very good way environmentally to substitute fossil fuel with renewable fuels. Then next point why it works like that in Switzerland is that for the loris there is a heavy duty tax. In Switzerland which is quite expensive which means that in addition that the diesel price is expensive more expensive that other european counters in Switzerland plus this tax makes actually the fuel quite expensive for diesel trucks and hydrogen trucks in Switzerland don't pay. Heavy duty tax at the moment because they we don't have the same external costs with hydrogen los than with fossil fuel lowers. So the model became financially viable without substitutes or grants from the governments. It's a pure private initiative and with the approach that. Total cost of ownership of a hydrogen larry over its lifetime should be in the same range than a diesel laurry so he and I doesn't sell its truck in Switzerland it's a long-term leasing and the laasing price is on a kilometre that is driven includes everything except the driver and fees. If you drive to craco park over a wrong place but it includes the fuel. So that's when then the he and eye hydrogen mobility which is the John adventure in s between hey and die and age- 2 energy. They bring the truck to the clients and. Have and an agreement that we will provide the green hydrogen for these trucks. So why go into mobility because there's this heavy duty tax in Switzerland and that works for the lorries as an entry point and with that we can start to create this green hydrogen economy with the loris and then the. The private cars can can track along and also benefit from the infrastructure with the few stations that are being setting up.
| 27:22.92 | chrissass | So that's pretty cool. The the business model. So so what I've seen across all the renewables is we do more and more interviews over time is that if the business model works the renewable takes off if if it needs to be subsidized or if it it needs to be It's a bit slow to get accepted. And so so I like that what I I think I just heard you say is is part of the lease of the vehicle or the truck in this case includes a per mile cost which includes fuel and and so their their business models attractive because you have a renewable Source. You're able to build There's apparently. You know some amortization of the the power generation or the partnership of of all those components there does that mean your your fuel price is pretty stable or how variable is the Hydrogen market to price bits and things like that for green energy over. Let's say a 3 or 5 year lease
| 28:15.89 | Nicolas | So in our case, the hydrogen price is linked to the fossil fuel price in Switzerland of the the fuel. So if the fuel price goes up then also our hydrogen price pay killer will go up so that's also the that from the cost. Ah, the cost of ownership model and.
| 28:34.30 | chrissass | Okay, so the contract adjusts based on cost of Fossil fuel that but you're just using a different fuel is that what I'm hearing.
| 28:41.94 | Nicolas | But we we want that the people to change from a diesel truck to a hydrogen truck whereby the costs total cost of ownership are equivalent. So we also have looked that from the fuel cost. Theres a link between the Fossil fuel and the hydrogiene costs and in the whole ecosystem you have.
| 28:47.30 | chrissass | Okay.
| 29:01.88 | Nicolas | You have the trucks you have also few stations who have to invest in so-called Hydrogen fueling stations. They also have to to invest and there's us who produce and we are great for the initial phase on a price formula where the producer of hydrogen will get something the fuel station will invest in Infrastructure. We'll get something and that will provide the fuel for the he on dive trucks who leads it to their clients.
| 29:27.74 | chrissass | So then I think you said there's 10 lores driving around right now in switzerland and and how many fuel points are there at this point. Ah.
| 29:36.62 | Nicolas | Now there's ten few days of high hydrogen refueling station. That's the the term the hrs and there's 6 forty six lorries at the moment driving and about a hundred and 30 private cars.
| 29:50.40 | chrissass | Okay, cool and is there any marine applications in Switzerland I mean we've got boats on just about every lake and things of that nature as well. So if you had any interest from Marine industry. Okay.
| 29:59.63 | Nicolas | Yes, but I will not comment more. We have even our first we have even the first project of Hydrogen plane that came which is a research project at et zurich so they already came and conducted us so.
| 28:21.44 | Johan | So take.
| 30:18.39 | Nicolas | And will go in different sectors but prair at the moment is the lorries and the cars.
| 30:22.76 | chrissass | And then for an impact on the environment Hydrogen produced Green what what impact if if trucks are off the road move to hydrogen what kind of improvement. Do we see what what does that do for air quality and and greenhouse gases how dramatic. Does that reduce what what? what percentage are coming from trucks.
| 30:45.13 | Nicolas | So basically you don't have c o 2 emissions anymore. What comes out of your truck is is water so it goes back to where the beginning you used water and the actualizer to produce hydrogen and oxygen and at the end in the fuel cell of the truck. Use the hydrogen. You take the oxygen from the from the air and in the fuel cell you produce electricity. So the truck has an electrical engine like a batteryjan truck but what comes out is is water so it has like an electro tu where working is battery. It doesn't make noise. There's no engine making noise. Much quieter. So that's the same than with a battery-driven truck and it doesn't have the other pollutions that the the and x particles and other problems that we can have in Cities. So unless the the footprint that you have to produce the truck and produce the infrastructure that produces a green hydrogen. Once it's working you don't have a other kind of ever environmental footprint just some usage of of the roads.
| 31:47.44 | chrissass | So that so that makes sense that's cool. So There's definitely an impact there now in this project as you've kicked off you mentioned that you partnered with an energy producer or I'll pick I think is that what you'd said and that they had a Hydro dam now was that dam. Providing power to the grid before this project or was it built specifically for this project.
| 32:06.87 | Nicolas | No, it's it's still providing to grid. We don't take the whole production. We take some of it So it's it exists for a while is done. Yeah.
| 32:15.13 | chrissass | And and as you look to scale up. Do you look to scale up through other hydrogen and you talked about you know, 2 or 3 different ways. How how does this scale up so that all the trucks across Europe use this kind of system. What is it just creating new Hydrop plants. Is it creating new wood burning plants. What What do you. Doing to scale this so that that it goes massive.
| 32:34.44 | Nicolas | So the first day we will have to talk about Switzerland because outside of europe it will be subsidize because you don't have this tax on the heavy duty trucks. So it's not the same formula. But how we want to scale up in Switzerland is by we are talking at the moment with about 10 other projects. Some will be hydros by the project. Some will be search parties from whom we will buy the hydrogen from so there's some that are publicly known and next production site should come by next summer in the eastern part of switzerland and then it will be all across Switzerland because we want the production. Not too far from the refueling station to limit the transport of the hydrogen which list all the topic we haven't touched on it at the moment which else were going to be an issue so at the moment we will use existing power plants mainly baseload so that we have enough hours that we can produce hydrogen. So we're talking about hydropower and of river plants. We're talking about waste treatment plants that have in certain bays load over the year and we're not talking at the moment of new power plants specific in Switzerland specifically for hydgen what may come is if we really build up a massive pv. Then the pv production that can't be absorbed by the grid than by the consuming during the Summer could also be a source of Green hydrogen and then if you want to stay on zero emission or very low emission hydrogen. Then 1 there 1 day also comes to the question of and and not for Switzerland but more globally then also of nuclear power which is called pink hydrogen not Green. It's pink but it would be also without c o 2 emission in that sense or very low 1 is built and that would be also base load which is another topic may be to explore if you really want to. Go into ah if the aim is to reduce c o 2 emissions that will be also way but for us as hy of spider and switzerland we talk only about grain no nuclear power to produce hydrogen. It's just green from renewable energy sources.
| 32:49.82 | Johan | There's so many parts to this that I like you know we we had on the show a number of innovative things and when you start combining innovation. Only recently we read that Switzerland was named the most innovative country. In the world which I think all of us on this call. Ah like because this is where we're where we're located. But what? what? I really find interesting is that you have the renewable which is key to to everything I think we can all agree on that. Then you have the business models which I think is also fascinating something that that I'm always trying to follow that we we're not just doing the same thing as we have done before but we're actually changing business models. But then we also had the third leg which I'm equal much interested in and that is the ecosystem around it. Building this requires an ecosystem you you require your your truck you manufacture your oems you required your your energy you require that that the gas pay or the former gas patients. There's there's a number of of companies around this but that also requires. Everyone to buy into it. So as you mentioned now that there's it a trial I think that's fine. You have 1 brand from the oes. How are how are other ah truck manufacturers oem looking at this you know we have some big ones in europe. Is there any trends around this for them or is this still a little bit of a specific for swizland as an early out test.
| 36:03.39 | Nicolas | So he and that has in my opinion a few years advanced on other o on the hydrogiegen truck now. Obviously others will follow. We had also competitive of hi fion dao already contacted us and said if you come in a few years will you have hydrogen for us as well or just for he die. So obviously I 1 day there will be a hydrogen market. There will be different type of lorries driving around all of that will come the this the specific thing that it worked was you mentioned about the system is really what age 2 energy managed to do in the beginning. To get the buy-in of loads of people to create this ecosystem. So there is only 1 type of lorry of he andaii today driving around so they had to find a compromise between the future clients of he and ii of what type of truck they want it for what type of use. So. It's a compromise where everyone can live with it. But not optimized and you have real competitors like if you know ah in Switzerland there's big too. Big supermarket chain coppe and migro I mean there are few competitors but they came together for this project to decide on which type of flori and also. The deploy the hydrogen refueing station you have competitors in the same association that was created in Switzerland to promote edge 2 mobility so that they coordinate between themselves that not the the same in the same village the same town you have 2 hydrogen ref fueling station in and in the same road. And you don't have another 1 another 1 hundred kilometers. So. There's also coordination and that's all private sector. There's no government involved and that was to to get the buy-in of the people who have petrol station off Laurie's transport firms to say we have to decarbonize this part of the economy. You will have to move from diesel away. Let's ah, come together. Let's start to create a market where every 1 of us will benefit and that was the visionary part of h 2 energy.
| 36:18.32 | Johan | which which I found really really interesting because this is something that usually is a stumbleblock. You have a pilot case with a restricted number of partners and scaling this to what we what we probably need to do requires collaboration. and and I think that was it's really interesting because this is usually what we've seen stumble blocks on before but that leads me to another question because who leads this innovation. We're talking about major sometimes conservative industries. If we look at the automotive industry if we also look at the energy industry someone needs to make the decision that this is the road ahead I always come back to the question we have an american company called tesla who says that we don't need Hydrogen. We need. She will sell batteries and then we have this 1 is that a conflict or is the market big enough fear that we can continue driving it because I think we all want ah c o 2 free drugs.
| 39:10.11 | Nicolas | So we definitely say it needs both. It's not 1 against the other is for for which application. Do you need which type so we we in our opinion like from below 200 kilometers a day. A laurie can be with a battery and electric engine.
| 37:33.79 | Johan | Yeah.
| 39:27.41 | Nicolas | But if you get to more than kilometers then your battery becomes significantly heavy on your truck. You have the question of recharging times because the hydrogen lorries they recharge like a diesel truck ten minutes and you can drive again. 40500 kilometers which won't be the case with battery day driven cars. So we say for both type of floris and cars will be required it depends on your application then maybe just a little comment on on the batteries because there we still have also to really have a sustainable model on recycling all these batteries and we also have to have enough ma material and components. But just leium or other types of batteries. That's not the same with the hydrogen that's less of a battle of rare earths or rare material. Even so we have to say that in a hydrogen truck you still have a small battery like in a fossil fuel car you still need a battery just this much more smaller. Then if you have a solely battery driven lari. So in summary, it depends what type of application. We think we need both and it's not the competition. It's a collaboration also between the the haljagen and the battery in the mobility sector.
| 40:37.65 | chrissass | So help my ignorance here understand the Hydrogen battery you you talked a little bit about the effort of moving hydrogen from where it's produced to where it's consumed help me understand how big how heavy how you get it into the battery. Help me understand a little bit of that side of the equation if you would.
| 40:58.70 | Nicolas | So I may so we have the bat the solely battery the loris and for us hydrogen is not the Hydrogen battery. It's the Hydrogen car on lorries that need a small battery also to run. It's just model.
| 41:09.51 | chrissass | Okay.
| 41:12.31 | Nicolas | Like ah for a fuel car a dieel car. You also have a small battery in your car and that's the same with your hydrogen Loureal Hydrogen car.
| 41:17.46 | chrissass | Okay, so then explain how the hydrogen so you produce Hydrogen It's green is it moved as a gas is it moved as a liquid How how is it moving around. What is this this service station going to have to connect to my vehicle and and what do I get in result.
| 41:21.35 | Nicolas | 1 that.
| 41:32.51 | Nicolas | So in Switzerland at the moment we are on gas form of the hydrogen not liquid hydrogen there's various reasons for that. So ah for us at the moment we produce hydrogen and then we compress it into containers twenty feet containers and that's a high pressure 3 hundred and fifty bars because Hydrogen is a very tiny element is the first element and so yeah, you need to compress this if you don't want a huge reservoir to drive them around so it put them into containers and this container I then put on lorris that transport them on docking station at the f stations. And from and there the hydrogen is compressed again at higher pressure level for the loris and even higher pressure up to nine hundred bars for the the cars because the cars have very small reservoir they take about maximum seven Kilos of hydrogen. Few weeks ago. Toyota is the mirror I did a new record of over 1000 kilometter with 1 fuel tank then you will see that basic on cost of fuel period in Hydrogen car and a fuel or diesel car on the fuel costs. You will competitive in the distance. And in the ah hydrogen laris at the moment. It's 30 2 kilots of of hydrogen that you bring in for about 4 or 500 kilometers driving but you have to compress it. It's really compressed.
| 42:47.48 | chrissass | And so is is it a stable gas if you were in an accident and you have compressed gas. What what are the risks inherent of driving a motor vehicle with compressed gas on it.
| 42:57.82 | Nicolas | Um, so Hydrogen is long used in the industry. It's not new and there has been driving around also hydrogen in other forms. It is the way that it's done in the car is that this is safe. It's bulletproof that they they have to try it first before going around. So and in certain application. It's even safer than fuel because Hyogen is so light that if there is a leakage it goes up in the air and unless you have initiation of very clearby and it goes up and then there's no risk whereas fuel if you have a leakage it goes on the floor. It goes in the environment. So it. Both we have learned to to have tackle the risk around diesel and fuel. The same is is the case with hydrogen.
| 43:43.73 | chrissass | Okay, so so I get that now using Hydrogen from plants I think your prototype as you said was ah was a generator plant. Are you also involved with wind farms and solar I mean it would seem that this is a good thing to do that once the sun's out or the wind is blowing you. You'd make. Make power when it's not so much it would store the power. It would seem that that's a good use is that in your plans.
| 44:07.33 | Nicolas | Correct. That's why I mentioned before if we have a massive pv rollout in Switzerland we'll use that to produce also hydrogen in Switzerland at the moment doesn't look like we will have a massive rollout of wind parks because there's so much but opposition of the people to have ah even a few windmills. So. We are lacking behind on that 1 so if we go out of the outside of switzerland and h 2 energy are our partner and shareholder they have projects in europe where is the hydri production is linked to wind farms.
| 44:37.47 | chrissass | And is water I mean switzerland we have lots of water. It's 1 of the unique places that that you can live or water you know and in Zurich we have fountains pretty much in every corner and they're running all summer long which as an american's very foreign because we really valued our water and was it was a scarce thing and here it seems to be plentiful. So is water challenging in other parts of europe or is that always okay.
| 45:00.46 | Nicolas | I don't know carlands because we at highest by that moment we focus in Switzerland I would say as long as there's no water scarc city then it's not a problem then you have the water and you you start with water you end with water so we're not polluting water.
| 45:19.46 | chrissass | And is there different quality have last question on water so is there different walllater that works as like all water equal when when for the power you get out of it. Is there a big difference between water and I'm sorry I'm totally ignorant here. So if you can smile laugh as I ask questions I just kind of wonder.
| 43:36.30 | Johan | So clicking.
| 45:30.37 | Nicolas | So we oh my god.
| 45:37.68 | chrissass | You know if if 1 reserve is the same as another when it comes to water.
| 45:39.40 | Nicolas | So we take water from the normal kind of swiss pipe water but we have then to deminerize it so we have to take out of the water every element that is not h 2 o because then it electizes they don't like other elements than h two zero because that's what we need so that's. So as long as you can guarantee a completely pure water and we have an our plant in in in Gerskin we have to demineralize first water before we can use it and that would be the same case everywhere. There's also a project that I heard where you take seawater and you have to take the salt out and other minerals and then you could also then use it to produce hydrogen.
| 46:18.91 | chrissass | Um, understood.
| 44:36.88 | Johan | Is that I continue on Chris question before I jump on to another 1 because as it's quite interesting is that a big process because water seems to be around the world. You know a majority of the the earth is on water and is is there a big process to make sure that you. Clean, though. Take out the minerals take out the salt or whatever needs to be done.
| 46:41.70 | Nicolas | It's mature technology we have to do it in other industries for a while so that's not the innovative part.
| 45:02.27 | Johan | So and and I guess this is coming back a little bit to what we've had on the show before where where really we we put innovation on existing technologies in many many ways which which makes it take off a little bit more than to kind of start from the beginning and and create something. Brand new. So so I think this is I like the idea of utilizing existing infrastructure existing industries existing parts but adding that innovation to it to create something new and talking about new then. You you mentioned a little bit I know hydro spider is folksing our Switzerland we're focusing on on the specific on on the trucks but with your expertise in renewable energy you mentioned and your backgrounds and and hydrogen in general especially than green and Hydrogen. Where do we see the big. Big opportunities outside of what we may be said here in terms of transport and heavy transport.
| 47:45.00 | Nicolas | Maybe before answering that just quickly go back on the innovation part also technically the innovation part today on the green hydrogen is the way we produce this with the technology like the Proton exchange membrane with what the technology we use and there we still have to scale it up. So we have 2 megawatts the challenge is to go to our 1000 a Gigawatt so there we still have technicalological innovation like with the wind farms and the pv when cost came down so we'll see that probably as well on the electroizes that cost with scale will go down so there is still technical innovation. There. Second part where we have technical innovation is the compression of of hydrogen. So usually it was 2 hundred bar and most of the gas industry Today. We are at 3 hundred and fifty bars already today we want to go at four hundred and fifty bars for the transport at the the car storage is. Seven hundred bars where you have your hydrogen so we're playing with other levels of pressure where also there's new technology to where you compress the hydrogen. So we still need a technical innovation and not just also business case innovation and cooperative innovation like people come to get it. So just do. Close on the innovation part and.
| 48:56.10 | chrissass | Do your do your partners need to innovate as well. So like you know a diesel engine. We we understand it's been around forever. We understand a life expectancy of you know what? you'd expect from ah a diesel engine right? So when they're engineering the electric motor with which you know there's plenty of electric trucks out. They've been around for a long time as well.
| 47:12.20 | Johan | Are.
| 49:15.58 | chrissass | With Hydrogen power is is your partner having to innovate that as well to to get the kind of performance as well. So are you working closely with multiple vendors then to figure that out.
| 49:24.51 | Nicolas | So We work on the part where we produce the hydrogen and the Os like you and die they will work on the way to consume a Hydgen to produce power which is the fuel cell. And there as Well. We'll have still technical innovation and also the whole scale up to bring cost downs which is the same issue that agree car with batteries for Pars.. It's the question of scale and innovation and bringing the cost downs.
| 49:47.28 | chrissass | So other than Marine and potentially aviation you mentioned eth where do you see hydrogen change in the game going forward. So it is the primary I mean to me, it's always been about Bunker fuels that I think that's a nasty fuel that if we can get rid of and use Hydrogen. Perhaps that's. Ah away I mean I think there's people trying to use liquid gas and in the interim but but I see Hydrogen is a very interesting play. There is it reducing emissions from from evs is that the most important thing you think that your contribution would be with hydrogen.
| 50:22.90 | Nicolas | No mobility is a key part because it's difficult to substitute with other energy sources unless you you start to use you you move like from the the road to the train and and you kind of change the Modal way to to Transport. So mobility will be a keypod. But that said in the beginning a lot of halgen today is using the industry in the agrebusiness for fertilizer so there as well. There's a lot of of potential do avoid c o 2 emissions to ch.
| 50:48.63 | chrissass | So does that mean I won't smell the fields with my my neighbors I live out in the country here in Switzerland and several times through the summer whenever but we're trading crops they they go and they fertilize and I get the the sweet smell of a farm does that mean that's gonna go away.
| 51:00.18 | Nicolas | You will no, you will still have the same smell but they will have to be produced with green hydrogen that the fossil sure will not because you produce ammonac and so that that the age as an element but it's a different molecule. Um, and then.
| 51:07.91 | chrissass | Ah, if you could solve the other problem I'd be appreciated. Ah.
| 51:16.38 | chrissass | So.
| 51:19.80 | Nicolas | Well, it has a big potential. The 1 of the key challenges with Hydrogen will be the transport of it so we talked about we use content at the moment because it's like not massive amounts of hydrogen and it's a kind of distance that we can handle. But at 1 point we'll have the question of pipelines. And so 1 way is to put the green hydrogen in the gas a natural gas pipeline and start to substitute five ten twenty percent of the natural gas and still use the same engines and application and have just a small part of of hydrogen in it for green hydgen like we have like bioteelenstics like that. That could also be so 1 way fun challenge will be how do we transport and if we also want to in a case of europe to decarbonize the industry agrobusiness debability. We may not have enough green hydrogen produced in europe. So if you look at germany they have already sign and mous. With australia with african countries to import massively hydrogen green hydrogen and that would also be a challenge then you will be talking about liquid hydrogen so that we can bring more quantity on a ship or through pya to europe. So that is also then a massive challenge to solve is if we really want the Hydrogen economy. How do we set up the transport between where we can produce it quite cheaply to Green hydrogen so with Massive pv and massive sort of wind forms and where is it consumed. And how do we bring it cheaply from the production to the consumption. What we do with hydroside in Switzerland is a start is kind of on our local scale where we'll try to produce the hydgen not too far from fuel station delores are are across all this old switzerland. But today we produce a ton of Green hydrogen a day so that's about 3 hundred tons a year and switzerland consumes grey hydrogen thirteen thousand tons a year so the way is still long to even decarbonize the way we use hydrogen today. And addition, if we want to decarboonize like the mobility which was not using Hydrogen so far with screen hydrogen then scared of what we need to produce is massive.
| 53:34.77 | chrissass | Are there vehicles keeping up is there production lines being built in scale I mean you mentioned that that there had to be migros and co-op basically had to agree on a ah compromised vehicle. Um. So you know if yohan and I go shopping for a vehicle. What's the likelihood in the next 3 to 5 years that you know I go to I dont know the volkswagen or Mercedes or Bmw or fiat dealer and see a choice on the lot that I could buy is is that on the roadmap is that likely to happen or is it still kind of a. Corner case to find a hydrogen vehicle.
| 54:08.55 | Nicolas | No, it will come at the moment. It's toyota and he and I you have to lead so I mean south korea is really a hydrogen economy and that's why also they they're pushing also the lorries and and japan as well. But they are european manufacturer coming also with that and you you can have your hydrogen car. But you, you're not going to buy a hydrogen car if you don't have a lot of fuel station where you can ref Fuel. So and people are not going to build a hydrogen refueeling station if they don't have enough customers and that's why we need the lories we need the lorries to create enough demand for Green hydrogen in order that people also invest in fuel stations. That then private cars working with Hydrogen they can drag along and come along this journey. But so in a few years you may have different providers of cars with Hydrogen also hopefully in a more affordable way.
| 53:16.64 | Johan | So so yeah, you you mentioned? ah the just replacing the existing hydrogen in the in Europe or in Switzerland today. It is a big project. Ah correct. Yeah, so where where is that deployed.
| 55:12.19 | Nicolas | To replace the gray hydrogen with Green hydrogen.
| 53:35.98 | Johan | Who is who is the main users of of of Gray Hydrogen is that still the automotive industry or are there other areas.
| 55:24.63 | Nicolas | There are many other areas in the industry referries and also the agrobusiness. So there's a lot of sectors.
| 53:49.16 | Johan | Okay, so that's that's spread out or which should be an even more compelling business case for green energy for Green hydrogen if if it if it is it straightforward replacing is is the same kind of concept. Yeah.
| 55:45.64 | Nicolas | Yes, to say it's the same molecule. The question is the costs because today in europe or like the aia or kind of worldwide benchmark the green hydrogen will be still about 3 times the price of grey hydrogen so the day we have a proper price on c o 2 then maybe people will switch. But today most people also for cost point will not switch now for us in Switzerland with the lories we said we want to decarbonize otherwise because if we also we play we re emmit zero 2 with with hydrogen then why should we not pay this heavy duty tax that alsoizes the external costs. So we have to have green hydrogen also so then and that was and therefore rebuild up the model that also financially it works with Green hydrogen.
| 54:49.89 | Johan | Interesting I think coming back a little bit I know we're running a little bit at time but I have had so many questions. Why do you think? and I I this is a hypothetical question because I know obviously you don't sit on all the cards. But once I have an expert in the room I might as well throw out the questions. We're seeing you you mentioned hondda and hynai as as kind of the leading the the way on this with your the ones where that you are working with if there are reasoning. You see you think that the asian oems are are leading the way on this rather than. The americans and or the europeans or is it just a coincidence that they and they were the first ones out.
| 57:18.19 | Nicolas | So here and then and in South Korea as a nation they are looking sincere on the whole hydrogen economy. So I think they have a certain and ahead of of others now why specific the Asians I couldn't answer you these questions.
| 55:51.14 | Johan | I Guess it leads back to if if they made a ah larger infrastructure decision with hydrogen and then we're early out that kind of ripple effects into the maturity of the ones and Chris anything.
| 57:49.86 | chrissass | Sure, Yeah, so just kind of bringing this together. So ah, what makes the project.
| 56:09.30 | Johan | Um, you.
| 58:00.44 | chrissass | Successful and what are the bigger risks from success. What what would keep this project from going from the 6070 eu lorries that you talked about to hundreds of lourries or all the trucks inwi'sland but what's what's the risk to this.
| 58:13.24 | Nicolas | So to start with the success a year ago we didn't have a clue if they would really drive well and also a reason why he and I came to Switzerland is because you have all the different climates you have a really cold winter where the lorries have to drive through snow and you have warm summers. You will have very wet times. It's a good place you have mountains you have flat parts it's a good place to test so the thing the first success is that the the lari really works well and the drivers love it and that the demand is is there also that we could start without any ah private initiative amongst competitors. Mentioned cope and mio before to choose on the lorries but there were another 15 other clients competitors coming today today to decide on a compromise design of the of the first laie and then the same on on the fuel station. So I think that. That whole thing exists today and it works and people are driving around and getting their goods delivered without c o 2 emissions in the and the transport is already a success the challenge for us to to go ahead is to scale up so we need to be able to grow in ah in a parallel. Production of Green hydrogen the new production additional production and grow at the same time like the lorries get to the customers in switzerland and there's no central planning entity. So it's all about private actors who coordinate amongst themselves and try to to bring it up. Um. Then they still as mentioned the price of the green hydrogen for the las in Switzerland is linked to the fossil fuel price. So would if for example, at 1 point fossil fuel like diesel and and fuel the price would massively go down for whatever reason geopolitically or others. And the electricity price would go highly up electricity price being more than half of the production cost of a chill of of green hydrogen that would become challenging so the business case is based on set an assumption on electricity price and fuel price. And as long as this goes and stays. Ah among within the range of our hypothesis. We be fine if markets in 1 way or the other play crazy then we will have to redis discusss that figures in the way we we prized the whole thing. But I think there's a clear There's a clear will there's a clear will to decarbonize the Society. So the direction is the derived 1 maybe then for switzerland the particular point is that we will potentially in the next 10 years have challenging winters with electricity supply phasing out of Nuclear power.
| 01:00:47.96 | Nicolas | And not being able to ramp up renewable energy as quick as maybe wished then the green hydrogen will still need electricity. So at 1 point. There's also arbitrage how you use your electricity and then in my opinion you have not just to think. Oh yeah, we need the electricity there because we have always used it there. We need to think where do I use my electricity in a way that reduces the environmental footprint the most where can we avoid your 2 emissions and then maybe it is to use the electricity to bru green produce green hydrogen for loris. And find another way to provide energy for that use where maybe you need to substitute electricity then so that's maybe the challenge to have a really global holistic view of of your energy transition and not just 1 sector or 1 part. We really need a global approach on energy and mobility on heating. A way the industry the agriculture works and and think how can we decarbonize as a society and not just have ah 1 way on just 1 part and forget the whole other part but the electricity supply the renewable energy electricity supply in Switzerland is going to be a challenge in next ten years and we will work that we also have enough electricity to produce green hydrogen to decarbonize the mobility sector.
| 01:02:07.36 | chrissass | Cool. That's all the questions I have I think we have time for you on So I'll let you do your conclusion before we wrap up the show.
| 01:00:29.95 | Johan | Well first of all and ni thanks for joining I thought this was really interesting. We have touched as I said in the beginning we touched on hydg in a few times but having the opportunity for almost an hour to really drill down and into this and how it works and and. Kind of touch a little bit on on the innovation and and the growth of this I thought it was really interesting recap for me I really like the renewable angles I think you've finished off really good on this I like the way where we look at new business models and also the ecosystem between collaboration I think these are 3 main things. That will help this fly so we're really really interesting. Really appreciate you coming on the show and chris I think that is a roundup for today.
| 01:03:03.93 | chrissass | Yeah, Nicholas thank you so much for joining I too enjoyed the conversation I liked your transparency of what the risks were I think it's it's always good when when people are transparent of what's good with what what could be potentially challenging that I have really appreciated. It definitely helped me understand a little bit about the business I think I I still don't know enough to really be dangerous but I know more than I did an hour ago. So I appreciate you joining the show and thank you so much for your time.
| 01:03:29.85 | Nicolas | Thank you chris thank you John for inviting me. Thank you.
| 01:03:33.47 | chrissass | And for our audience you've spent another hour listening to insider's guide to energy I hope you have improved your hydrogen intelligence as well as we have and if you enjoy the show. Enjoy our content. Please remember to share it remember to like it join us follow us on linkedin. And subscribe to us wherever you get your podcasts until next week we wish you a good week. We'll talk to you soon? Bye bye.
| 01:02:16.44 | Johan | Go.