Hydrogen suffers from the classic chicken and egg problem. That means there isn't enough demand to get suppliers into the game, and there isn't enough supply to drive enough demand.
One startup thinks there's a solution for both sides.
Chicago-based Celadyne has developed a nanoparticle coating that can be applied to existing fuel cell and electrolyser membranes. Gary Ong, the company's founder and CEO, said the material has the potential to significantly improve the durability of existing fuel cell designs while increasing hydrogen production efficiency by 15-20%. He said there is.
Celadyne recently raised a $4.5 million seed round, according to information obtained exclusively by TechCrunch. The round was led by Dynamo Ventures and Maniv, with participation from EPS Ventures. The funding will be used to manufacture more of the material, allowing the company to run more tests to prove its durability and efficiency.
When Ong was working on his initial business plan, he heard some experts advocated working on the demand side first, while others favored the supply side.
“The truth of the matter is that it's actually both,” Ong told TechCrunch. “We believe that decarbonising industry requires the introduction of hydrogen, but we truly believe that everyone else is addressing one side of the problem and not the other. I am concerned.”
To produce and use hydrogen, engineers perform the same basic chemical reaction in one direction or another. When moved in one direction, it uses electricity to produce hydrogen and oxygen from water. This is known as an electrolyzer. When moved in the opposite direction, electricity and water are generated from hydrogen and oxygen. This is known as a fuel cell. Fuel cells and electrolyzers are each tuned to perform half of the cycle more efficiently, but are essentially essentially the same design.
In both cases, there is a risk of hydrogen passing through the proton exchange membrane (PEM) that separates one side from the other. Hydrogen crossover can reduce fuel cell durability and create hazardous conditions in the electrolyser.
Scientists cannot block protons completely because the membrane still needs to be permeable to hydrogen. Instead, it tries to slow down the crossover. Usually that means increasing the thickness of the membrane. Unfortunately, thicker membranes reduce system efficiency and do not completely solve the durability challenges facing fuel cells. Producing hydrogen isn't cheap, so every little bit counts.
Celadyne says its technology allows for thinner membranes. According to a patent filed by the company, the membrane is coated with a crystalline metal oxide, such as titanium oxide. To manufacture the finished material, Ceradyne inserts a step into the traditional roll-to-roll process for membrane manufacturing. “The rest has been preserved,” Mr Ong said. It should help reduce overall production costs.
A sample of Celadyne's membrane is housed in a display case in the company's laboratory. Image credits: Ceradine
The Inflation Control Act provides a green hydrogen production tax credit of $3 per kilogram of hydrogen, which allows Ceradine coatings to reduce hydrogen production costs to $1 per kilogram today. said Ong. This is the cost that many believe will make hydrogen competitive with fossil fuels in a variety of applications.
Ong said Ceradyne is in talks with car companies and is sending membrane materials to them for validation. (Toyota is not an investor, but advised the startup as part of the Sputnik acceleration program.) Ceradyne also signed an electrolyser project with a grid partner in the Northeast.
The startup initially plans to sell membrane materials used in fuel cells to auto and trucking companies. With the proceeds from these sales, the company plans to begin construction of electrolyzers ranging from 1 MW to 10 MW, which will then be sold to power companies and oil and gas companies.
Ceradyne's business model deftly addresses both sides of the chicken-and-egg problem, but the success of both depends heavily on the company's ability to scale up production of its nanoparticle coatings. The company's work is shoddy. Tackling both sides of the market, especially an untapped market like hydrogen, is a challenge for seed-stage startups. Once again, startups don't succeed by aiming low.