How predictable is the speed of technological innovation and what significance does this have in particular for the exit of a plant?
The speed of technological innovation, especially in the field of electrolysis technology, plays a crucial role in the long-term exit value. Therefore, choosing the preferred technology is of great importance. Depending on investors’ risk tolerance, the advantages and disadvantages of the various technologies are weighted differently.
Overall, however, it can be said that due to the complexity of hydrogen/power-to-X projects, today’s projects are usually implemented with relatively mature technology. These technologies are therefore in competition with each other. More efficient technologies are unlikely to be realized until projects with mature technology have been implemented in large numbers and sufficient experience is available.
Lenders will be very reluctant to finance newer technologies. Therefore, it can be assumed that projects with more innovative technologies will be realized on a much smaller scale and much later, so that they should have only a limited impact on future exit values.
The use of mature, proven technologies can mitigate potential risks related to technological performance and/or obsolescence. A high Technology Readiness Level (TRL) (i.e. at least 8 out of 9) must be taken into account. In addition, suppliers should have sufficient experience, for example in the areas of biofuels, hydrocarbons and petrochemicals. Partners should have in-depth expertise to deliver TRL 9/9 to minimise concerns about technological uncertainty in the short to medium term.
There are currently three known electrolyser technologies:
- Alkaline under atmospheric pressure and with the variation of pressure systems
- Membrane-based, either as proton exchange (more mature) or anion exchange (new development)
- High Temperature Solid Oxide Electrolyzer
The first technology is the most mature and has been in use for many decades, with pressurized versions significantly improving flexibility and system efficiency. The second technology can also be considered mature, but it is slightly behind alkaline technology. This technology offers much greater flexibility with similar system efficiency, but comes with much higher capital and operating costs. The third technology is significantly less mature (TRL approx. 6-7) and operates at very high temperatures (up to 900 °C), which makes it difficult to operate, but potentially achieves higher efficiencies.
