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In Your Inbox: Enabling the hydrogen economy; Bringing transparency to supply chains; Drones and climate change
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.
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?”
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.
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.
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.
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.
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.
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.
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.
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.
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AgUnity takes simple phones and makes them relevant and useful for the very smallest farmers in the world. Functionally, these phones are no different from the phone that you or anyone else has in their pockets. AgUnity’s phones focus on the needs of the farmers – communication with the people they’re selling their commodities to. Without proper communications here, crops can go to waste due to miscommunications on pickup.
The other big thing we do is give people a pathway out of a pure cash economy by providing immutable receipts backed up by blockchain. Without AgUnity, this is particularly disadvantageous for women. Women tend to run the family farm and look after the kids. The problem arises when women go to the market to sell their harvest and come back to the village with cash. Everybody in her village knows she’s doing it, and in a lot of developing societies, they have kind of a shared effort person theory that if someone else has got cash, you’ve got a right to ask for some. And it’s hard for them to refuse. Additionally, there’s also the risk of being robbed.
AgUnity’s phones also serve as data collection devices when there is no connectivity. Phones can store transactions for weeks or months if necessary until that farmer gets connected. We have created both sides of an encrypted transaction.
Many other technologies in this space are just a little bit too complicated or require bank accounts for transactions – both pieces are unfriendly for uneducated farmers, and creates another problem. When farmers can’t use these systems, this creates more of a differentiation in wealth, resulting in pushing the disadvantaged farmers further down the food chain. We’re different from the competition by focusing on making a solution that works for absolutely everyone – including the lowest income farmers with the least education.
AgUnity is tackling sustainability in the supply chain. Our biggest market is commodity buyers, like Fair Trade International. Their big problem is that their consumers that want to know that they are buying ethical coffee. Currently, Fair Trade takes months to get reports from a group of farmers into their annual report, which no one reads.
We are streamlining this process by providing a QR code that customers can scan to see the farmers that grew that coffee, what Fair Trade (or other organizations) has been doing to help that community, and what those farmers got paid for it.
From the supply side, when customers scan the QR code, we are integrating a way for customers to provide a tip to the farmer. For context, the average cost of coffee is $2.80 a cup, the farmer gets roughly 2% of the $2. 30 years ago, the farmer used to get 10-15%. Over those 30 years, the price of coffee at the source has barely changed because the buyers have incredible power over the supply chains, and the farmers are small and can’t do anything. Big companies set a price and if the sellers selling mostly to these companies, then whatever price the company sets is what price the coffee will sell for. Companies have been extremely good at not giving the farmers anymore, even though the middlemen, the brands, the roasters, and the retailers are making four to five times more now. This applies across many commodities, and it’s one of the things keeping the developing world impoverished – they just don’t have bargaining power.
By providing a way to tip the farmers, it gives consumers the power to say, “I care about my farm.” For companies integrating these capabilities, they get great consumer data on who cares about where the products came from. As a result, farmers have the potential of their income doubling. AgUnity is thinking about the supply chain of sustainability.
Once you bootstrap a token, and you’ve got a facility for people in developed markets to interact with the developing markets, the sky’s the limit to what you can do in that scenario – you can buy stuff directly off the developing farms, you can lend money, and you can get paid back with the digital token. We’re trying to create a new vision for how people buying things from a developing country can directly interact with those merchants. Small amounts of income and support can fundamentally change their lives. I genuinely believe if we can show that to the developing world, consumers will support the developing world farmers, and that can lift millions of people out of poverty.
Big companies in many different sectors are announcing they want to bring transparency to their supply chains. The great thing is that this concept can be used for different goods, from fishing to mining.
During the pandemic, many impact brands grew massively. David mentioned that he knew several coffee companies that had 300-400% increases in sales, as consumers started buying online. When consumers switched to purchasing online, they had the time and capability to dig into the brands and the impact/sustainability piece. Quality and mission are resonating more with consumers, and right now we’re seeing almost an increase in demand for quality, provable, ethically sourced products. As bigger organizations start making changes, other companies will follow and consumers will start to expect that all companies are acting ethically and looking after their supply chains.
As corporations tackle climate change, many industries and verticals can leverage new technologies in their day-to-day operations to reduce their emissions and costs while increasing safety. Drones, a subcategory of autonomous vehicles, can play both a direct and tangential benefit in the environmental space through a variety of alternatives to “business as usual” with some being implemented at scale while others still being tested. Drones are particularly interesting because they touch both the consumer and enterprise verticals, meaning they can have broad reach and appeal.
Below is a highlight of drone innovation and examples where drones can directly or indirectly impact climate change.
There is no secret that electric vehicles, specifically cars, have had their shining moments as we transition from oil and gas (O&G).
To validate that drones are making an impact on climate, Amazon’s Climate Pledge Fund recently announced a $368M investment round along with others in BETA Technologies, an electric vertical takeoff and landing (eVTOL) drone aircraft. This investment further cements the development of sustainable and decarbonizing technologies to facilitate a lower carbon economy. More specifically, seeing a large corporation such as Amazon committing investment capital and importantly, aligning this investment to their own goal of 100,000 electric vehicles on the road by 2030, reaching net-zero carbon emissions by 2040 is key, i.e. beyond lip service.
The public capital markets also seem to be semi-receptive to eVTOLs with the numerous announcements of SPAC mergers/IPOs. One interesting startup to keep an eye out on is Archer Aviation that plans to roll out its services in Los Angeles and has a large contract with United Airlines.
In an era of e-commerce, a single click to order anything takes a lot of energy to bring it to your front steps. The supply chain and fulfillment operations are massive, especially with long haul and last-mile delivery done by medium and heavy-duty trucks accounting for about 8% of U.S. greenhouse gas emissions. Companies such as UPS, Google, Amazon have dabbled in delivery but the battery technology, and more importantly, FAA regulations have limited the scaling out of drone delivery.
Additionally, drones may only serve a subset of packages (small parcels) and due to their range, a vast network of charging stations may be required at scale. These charging stations could be linked across city centers or at distribution warehouses on rooftops, obviously powered by renewables. Others have thought about deploying drones in coordination with the trucks that could in theory scale last-mile delivery, reducing the truck delivery drive route, thus miles and emissions. All of this, of course, is technically challenging, ripe with logistics and technological hurdles. For now, drone delivery in the US, at least, is still at trial stages.
For long-haul-based drone delivery, large autonomous cargo drones are picking up steam. Natilus, for instance, is developing an air freight drone that is touted to reduce costs by 50% with fewer emissions due to optimized aircraft aerodynamics. The underlying return on investment (ROI) allows for Natilus to increase shipping volume compared to traditional aircraft of the same weight.
As energy corporations continue to transition to developing and maintaining renewables, drones are also playing an important role in the inspection of those assets and critical infrastructure such as solar fields, wind turbines, and miles of power lines. Companies such as DroneBase utilize drones and other forms of imagery for construction monitoring of these projects to ensure that they are on time and on track, visualize any damages to infrastructure, which is critical to making sure that for instance, solar is creating enough output as projected. Operations and Maintenance (O&M) teams find drones are an effective solution because they are faster, safer, and cheaper than traditional methods of climbing towers and powerlines.
Drones are also used heavily for research in visually creating detailed maps of protected areas for land-use planning, for instance, in rainforests. As always, the value of drones gives the user a different perspective but is also cost-effective, allowing research budgets to stretch further.
Drones and robotics can have a positive impact on reaching climate goals. Personally, I am interested in how any form of imagery or video can help in the management of all critical infrastructure, especially in renewables. Drones are being used for image analytics in so many forms across industries, and to be able to use them for full lifecycle asset management is exciting (development, operations, and maintenance).
America as we know, has an aging infrastructure problem. Using technology allows us to speed up the construction of renewables and maintain them for 20-plus years so they perform correctly.
Pairing visual intelligence from drones and integrating them with other forms of data like weather, and millisecond real-time information from the actual assets creates a powerful combination for performance optimization. Machine learning (ML) and artificial intelligence (AI) can then be run on this data to ensure peak renewable generation at all times with reduced outages via preventative maintenance.
Editors: Swarnav S Pujari, Daniel Kriozere Writers: Nick Osgood, Max Melnick
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