Insight Conversation: Tom Campey, Hysata

Australia-based electrolyzer company Hysata has an ambitious target of ramping up its manufacturing plant in New South Wales, betting on the growing number of renewable hydrogen projects globally that are aiming to be ready for business before the turn of the decade. Hysata Chief Commercial Officer Tom Campey shared his views with S&P Global Commodity Insights Editor Ruchira Singh on the company's new technology and the cost economics it is designed to change, the pace of development of the new fuels industry and the support it needs to move ahead.

What can you tell us about the Hysata electrolyzer?

Our electrolyzer will deliver a significant levelized cost saving [for renewable hydrogen]. We offer step-change improvements in three key areas: efficiency, installed cost and scalability. By saving 20% of electricity, we save a huge amount of capex. For a project making a million tons of hydrogen a year, that efficiency saving is equivalent to about $3 billion, based on expected 2030 prices of renewables.

When will you produce the first electrolyzer at the Port Kembla plant? Have you received any interest from potential buyers?

In 2025. We will be developing a 100-MW manufacturing line and then we will be using that manufacturing line to produce the 5-MW unit that will be going in the field with Stanwell.

We've been in talks with customers since the start and we have a significant interest in the technology. We have already signed 9.4 GWs of conditional pre-orders and letters of intent with customers globally and we have a further pipeline in excess of 30 GW.

There is a mix of domestic and international [customers]. We are really focused on large-scale applications where people will be deploying electrolyzers in hundreds of megawatts to gigawatts. Those are industries like green steel, chemicals, refining and sustainable aviation fuel.

Can you elaborate on the 30 GW pipeline?

These are customers that we are in advanced discussions with, but we have not yet signed an agreement. This would be happening progressively.

We are focused on the early stages of the companies at the major western markets. We recently hired a head of Europe and he's been leading our engagements there.

Related story: Australia's Hysata gears up to meet multi-gigawatt order book

What would costs be like? How does your electrolyzer compare with proton exchange membrane electrolysis, or PEM, and alkaline electrolyzers?

On a total installed cost basis, we'd be highly competitive with the other technologies. That's due to the intrinsic simplification of our technology and the use of low-cost, earth-abundant materials. We don't have any of the supply chain constraints of some technologies that use, for example, iridium. [Our dependence] is largely on things like steel, nickel, polymers -- materials that have large, scalable supply chains.

Can you throw some light on the current state of the electrolyzer market? Are you seeing any shortage as hydrogen projects come to construction stage?

What we're seeing are projects awaiting clarity around policy. That's been slowing down some of the projects and as a result I don't expect that we'll see electrolyzer supply constraints early on. This could all change as the industry ramps up and some of the existing electrolyzers run into supply chain constraints as the industry reaches tens and hundreds of gigawatts of production. But early on, we're not seeing those constraints yet in large part due to timelines of existing projects, in many cases, being slower than some expected a year to three years ago.

How are you positioned to meet potential shortages?

Certainly, from our perspective, we see that we can scale our production in a way that is difficult for incumbent electrolyzers. We've focused on developing a product which is scalable. Existing electrolyzers in large part have come from an industry where things were hand-made for small scale because there wasn't a large demand.

We've seen from the outset of our company that this is going to be a very large industry. Therefore, manufacturability and scalability have to be central in what we do. That's how we approached our project.

Ultimately thought, it comes down to demand in the market and that comes down to demand from customers of green hydrogen. But to really get this industry scaling up at the speed that we need, we have to address climate change, and we need to see more policy [decisions] happening faster.

What else should be there in terms of policy?

There is a total quantum of funding question and there is also the question of who is receiving the funding. What we've seen in the industry at the moment is that many projects are waiting for an offtaker to sign on to reach financial close. However, most of the funding that is on offer currently goes to the initial part of the value chain -- there's less funding available for the offtakers. Having support across the value chain can help unlock end-to-end hydrogen projects.

In Australia, will the electrolyzer supply be well-matched with project development?

At this stage, most projects in Australia will be looking overseas for supply. Australia really is a part of that same global market for electrolyzers as other countries. What we've certainly seen though in talking with customers -- and this applies to Australia and other markets -- is that, they are interested in having domestic manufacturing close to their facilities. Governments across the market that we are engaging with are also keen for that domestic manufacturing.

We see that as a real trend. It's not just a case for electrolyzers but it's a case across clean energy technologies. Governments are seeing that these are strategic capabilities and having domestic supply can help in ensuring that their domestic projects go ahead and avoid future supply chain disruptions as we saw with COVID-19.

Are your electrolyzers suited to certain use cases like hard-to-abate sectors or can they also be used for other applications?

The great thing about our electrolysis is that they have multiple applications. They work well with renewable electricity. They are fast-ramping -- that's important with renewables so you can match with the load profiles. The hydrogen they produce is suitable for all kinds of applications where hydrogen is needed.

We are focused on large-scale deployments of electrolyzers because we see those as where most of the market is. That may be directly with an end-user, such as a steelmaker, or it might be with an energy company that could then market that hydrogen to a range of end-users.

What is the timeline for scaling up your manufacturing to a gigawatt level, and what is the long-term plan?

That will happen shortly after our commercial demonstration. By 2026 we will be in gigawatt scale.

Ultimately, we aim to be the world's leading electrolyzer manufacturer. We have the world's best technology.