Infinite Blue Energy has raised funds through a heavily oversubscribed pre-IPO, as it positions itself for the coming green hydrogen revolution. Image: Getty
IPO Watch
Infinite Blue Energy has raised funds through a heavily oversubscribed pre-IPO, as it positions itself for the coming green hydrogen revolution.
A transition away from fossil fuels to renewable energy is not only necessary for our planet, it’s also inevitable.
According to data from the International Energy Agency, 28 per cent of the world’s electricity generation is now already produced from renewables, at the expense of coal and gas.
The Australian government understands the urgency, and in a recent speech to the Business Council of Australia, Prime Minister Scott Morrison said that Australia “needs to change our energy mix over the next 30 years on the road to net zero emissions”.
He pointed to the commercialisation of low-emission technology as the path to net zero by 2050.
Against this backdrop, solar and wind plays have come to the fore over the years, but it’s the hydrogen economy that’s getting everyone excited right now.
Within this hydrogen space, a transformation of its own has also been taking place. The sector has moved from away “brown” hydrogen, which is produced using coal and the Co2 pollution associated with it. Then came “grey” hydrogen, which is produced from natural gas where emissions are released into the air, which in turn gave way to “blue” hydrogen, where carbon is captured and stored underground.
But all the talk now is around “green” hydrogen, identified by experts as the energy source likely to bring net zero emissions to the world, and is expected to grow exponentially over the coming decades. Green hydrogen is produced by 100 per cent from renewable energy, such as solar power and wind, to power an electrolysis process that splits water into its hydrogen and oxygen components – all with zero carbon emissions.
One Australian company that’s at the forefront of the green hydrogen revolution is Perth-based Infinite Blue Energy (IBE), which owns the Arrowsmith hydrogen project in Western Australia.
Speaking exclusively with Stockhead, IBE co-founder and CEO, Stephen Gauld, says the green hydrogen industry is potentially worth billions of dollars.
“Worldwide at this point in time, there’s about 120million tons of hydrogen produced annually. Green hydrogen production is probably only less than 3% of global dedicated hydrogen production today comes from water electrolysis,. However if you consider the available landmass, solar, and wind that we have around this country, the opportunity is worth multi-billions of dollars.”
Hydrogen is the universe’s most abundant element, but it doesn’t appear pure in nature, and requires energy to separate – which is expensive right now.
But Gauld believes that green hydrogen could still provide a cheaper alternative to blue hydrogen in the future, as more players enter the market.
“Yes, you can make blue hydrogen from natural gas. The big problem is you have to capture the CO2 and inject it back deep underground, and that’s very difficult and costly,” he said.
“This is not about competition, it’s about having the ability to have participants in the market delivering the volume and reducing the manufacturing cost of the electrolyser, and increasing efficiencies in solar and the wind.
“As we see greater demand for these components in the carbon-free transition, we will see costs come down dramatically,” he added.
And the addressable market is huge. According to Gauld, Asia Pacific has a market of around 6.5 million tons a year, with South Korea alone making up 2.5 millions of that.
“ When you consider the scale of our Arrowsmith stage 2 and 3 productions, the quantum required would be equivalent to seven of these plants just to supply the demand for South Korea alone. As South Korea energy demand transitions, the scale and scope will commensurately increase in volume there is enough market share for everyone, we just need to support the transition to cleaner energy and grow with the market.”
In Australia, IBE has already closed offtake agreement deals to get its production off the ground.
Just last week, the company signed a long term deal to supply green hydrogen to a major roadhouse operator, Western Australia. The 20-year agreement includes two five-year extension options, which could potentially see IBE supplying hydrogen for the next 30 years.
The deal will initially see IBE supplying and installing infrastructure at existing refuelling stations, which currently services more than 500 heavy vehicle refills a week. The roadhouse network supports vehicles travelling from Perth to the regional WA, including the mining enclave of the Pilbara.
The offtake agreement will see the Group purchasing 100 per cent of green hydrogen from IBE’s Arrowsmith Stage 1 project, commencing at 5 tonnes per day which will then scale up to 25 tonne per day over a 12 month period.
First production from Arrowsmith is anticipated in August/September of 2022, where it expects to reach 18 tons of hydrogen production per day in early 2023 and full production by 2024. It’s expected that 118,000 tonnes of CO2 emissions will be displaced from the plant annually.
An international MoU agreement has also been signed with Singapore’s Enviro Gas, which is currently exploring the feasibility of a Liquid Hydrogen receiving infrastructure at Jurong Port in Singapore – and potentially enable the $2.5 billion expansion of Arrowsmith’s Stage 2 development for the supply of 70,000tonns/annum of Liquid Hydrogen.
IBE has recently closed its pre-IPO raising to investors.
The pre-IPO has gained substantial interest, with the company closingthe raise in just 22 working hours after opening, and two weeks ahead of schedule after the massive oversubscription. The raise had reached almost $10 million before it was closed.
IBE co-founder, Yolanda Gauld, said the interest in the pre- IPO was phenomenal.
“We’ve done two rounds of pre-IPOs. The first round was 10c, and within six months our second round was priced at70c,” she said.
The company has completed its FEED work on Arrowsmith, and is currently finalizing its Environmental Protection Authority referral over the coming weeks, saying that it was comfortable that it was mitigating any regulatory issues. .
The company will also announce in due course on where it will list IBE shares.
Asked why now is a good time for investors to put money into IBE, both Gauld and Yolanda offered a rather modest answer, considering the revolution that’s about to take place in green hydrogen space.
This article was developed in collaboration with Infinite Blue Energy, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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