Home Venture Capital Hydrogen’s ‘irreplaceable’ role highlighted by platinum-linked venture capital provider

Hydrogen’s ‘irreplaceable’ role highlighted by platinum-linked venture capital provider

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JOHANNESBURG (miningweekly.com) – The role of hydrogen in the decarbonisation of the hardest-to-abate sectors of the global economy continues to be highlighted as “irreplaceable” by AP Ventures, the independent venture capital fund focused on investing in early-stage companies that use or enable the use of platinum group metals (PGMs).

“We remain very excited about the hydrogen sector,” was the comment of AP Ventures co-founding partner Kevin Eggers in a Zoom interview with Mining Weekly. (Also watch attached Creamer Media video.)

“It’s an existing market today. There’s a tremendous amount of grey hydrogen that is produced on the market, and we ultimately, as a minimum, need to decarbonise that hydrogen production,” Eggers emphasised.

While today hydrogen is used in oil refineries and other emerging applications, in the future, it is earmarked for use in aviation fuels, steel production, transportation and other verticals.

“Based on what I see today, we have a very robust pipeline. We continue to see a lot of interesting technologies, and a lot of countries remain committed to the original hydrogen strategies and agendas.

“That said, we can’t hide away from the fact that the last year has been a little bit more challenging for the transition. Interest rates have been higher. There’s general concern around politics and there’s multiple wars in the Middle East and Europe.

“All that has provided a little sense of caution. If I look back to two or three years ago, we’re certainly in a slightly more cautious perspective. That’s not a bad thing. We want to see sensible investments made. We want to scale the most interesting and relevant technology.

“We don’t want to see the wrong technologies get funded. To the extent that that’s causing people to be a bit more thoughtful and mindful about what gets funded, I’m all for that,” added Eggers.

SOUTH AFRICAN COMPANIES INCUBATED

Meanwhile, in South Africa, AP Ventures has incubated two entities, which it is using as a tool to develop new projects and opportunities in South Africa. The two entities are MatiTech, a water technology startup, and African Hydrogen Ventures.

“We’re seeking co-investors into both those entities and we want to have a meaningful impact on the development of the hydrogen economy in South Africa.

“We’re very grateful for the support we’ve received from Anglo American, Impala Platinum and the Public Investment Corporation, three very supportive LPs, who share our strategic ambition to develop hydrogen projects and opportunities globally in terms of the meaningful impact that should have and will have on PGMs but also domestically in terms of the opportunity within South Africa, which has abundant wind and solar renewable energy resources,” Eggers outlined.

The production of green hydrogen relies on electrons from renewable energy, which provides a starting framework.

“Then we’ve got expertise in South Africa, so we do continue to think that from our mining and extractive industries, companies such as Sasol etcetera, there’s lots of existing infrastructure and expertise to leverage, and we’re seeking to do most of that investment through MatiTech and African Hydrogen Ventures.”

Mining Weekly can report that MatiTech is leveraging the technology of one of AP Ventures’ existing Danish portfolio companies, which has developed technology to synthesise hydrogen peroxide in a continuous form and in low concentration to enable safe drinking.

After incubating a business about three years ago, AP Ventures found a team including various board members and a CEO to lead it. The most significant installation is a project on an operational mine site in South Africa where hydrogen peroxide technology and significant peripheral equipment has been installed to enable independently validated safe water, which is now being provided to the community.

Many more opportunities to make local use of hydrogen peroxide are also being pursued and early conversations are under way with vineyards looking to treat their water.

Through the Danish company, a trial has taken place in Napa Valley, in the US, which is being leveraged to find local applications across South Africa

Eggers’ view is that the PGM-linked hydrogen peroxide technology is going to have a profound water impact in South Africa for years to come.

Concurrently, African Hydrogen Ventures has been set up to develop hydrogen-related projects with partners in South Africa.

Being leveraged for application in South African is some of the technology in which AP Ventures has invested in North America and Europe.

In addition, own projects being developed are in dual fuel applications, involving the use of hydrogen in internal combustion for mobility applications, and a wide variety of other initiatives that make use of existing technology and know-how from the other 26 portfolio companies in which AP Ventures has invested, which includes electrolyser assembly. The high-performance characteristics of PGMs play a key role in proton exchange membrane or PEM electrolysers, which generate green hydrogen.

Eighty per cent of the investments of AP Ventures are in the northern hemisphere, with the remaining 20% going into ‘other’, which takes in Australia, New Zealand and South Africa.

DECARBONISATION FOCUS

The portfolio of the venture capital company is focused mainly on hydrogen’s role in decarbonising energy and industry.

Since 2013, its investments have gone into technologies that unlock the hydrogen value chain to enable the transition to sustainable energy.

Investments are in hydrogen production, storage and transportation as well as hydrogen applications that address the structural constraints affecting mining, transportation and heavy industry.

Targeted are early stage technology companies with global mandates that address the UN Sustainable Development Goals.

Owing to hydrogen being a zero carbon emission energy carrier, its growing value chain has established applications in many industries.

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