‘Don’t let perfect get in the way of better.’

This is a motto the founders of a hydrogen energy start-up that’s just received $950,000 from the Government’s Provincial Growth Fund, are keeping at the back of their minds.

Taranaki-based engineers, Andrew and Catherine Clennett, founded Hiringa Energy in February 2017.

They are planning to produce hydrogen fuel to power electric vehicles and buses already used in the likes of South Korea, Japan, China, the UK, Scandinavia and Germany.

The upsides of hydrogen fuel are its cleanliness and efficiency. The hydrogen-powered Hyundai Nexo for example can be driven for 600km without needing to be refuelled. It doesn’t require recharging like battery-powered electric vehicles either.

Yet ironically, the cheapest way of producing hydrogen fuel is by splitting hydrocarbons or gas - the energy source the Government is trying to phase out by banning new oil and gas exploration.

The idea is to gather excess hydrogen from the major petrochemical companies, and purify it, before putting it in a fuel cell.

Hiringa Energy is talking to Methanex about using the hydrogen by-product from a waste stream at its Motonui plant.

For the hydrocarbon splitting process to be truly zero emissions, the carbon omitted needs to be captured.

Hiringa Energy is looking into converting this to solid graphite.

The other way to get the hydrogen molecule without omitting carbon is by electrifying water.

Using the existing gas resource - for now at least

Speaking to interest.co.nz, Andrew Clennett says the initial plan is to use both methods.

In the future he believes it will be more economic for the gas option to be ditched and for renewables to provide the electricity to electrify the water.

This is the ultimate goal.

“Electrolysis from renewables has the advantage of capturing full energy potential of renewables, and as technology improves and prices decrease, electrolysis using renewable energy will become a more cost effective zero emission solution,” he says.

He maintains that with some infrastructure in place, Taranaki is well positioned to generate much of this renewable energy.

But to the get the project off the ground, Clennett accepts using the existing gas resource makes sense.

“Let’s not waste the stuff that already exists, even if it has CO² associated with it,” he says.

“If we can manage CO² or greenhouse gas emissions, that’s what we need to be reducing. Unfortunately we’ve kind of made the methane molecule the baddie here, or the hydrogen carbon molecule the baddie, but we still need those molecules…

“It’s not about the molecule, it’s about the emissions.”

Clennett says “there are a lot of people chasing perfect”, but for it to be economic to scale up the production of hydrogen transport fuel, gas might still have a role.

He notes a hydrogen-powered vehicle that uses hydrogen made from gas still has a smaller carbon footprint than a petrol-powered vehicle.

Asked whether Hiringa Energy would be better placed if the Government remained committed to incentivising green investment, but didn’t ban new exploration (keeping in mind the fact gas is needed in the transition to a low carbon economy and New Zealand’s gas reserves are expected to be depleted within the next 10 years), Clennett says it’s a double-edged sword.

A sense of urgency

Clennett fears the exploration ban will see Taranaki lose the oil and gas experts the hydrogen energy sector relies on.

He also worries that the reduced stream of capital from the oil and gas sector will reduce the funds available to help pay for the infrastructure the hydrogen energy sector needs.

Yet on the flip side, Clennett says the ban has brought about a sense of urgency and government stimulus.

Noting the amount of upfront capital necessary to bring a new energy source to market, he hopes to continue getting government support through the Provincial Growth Fund, and also the Green Infrastructure Fund.

With Catherine Clennett Hiringa Energy’s sole shareholder, Andrew Clennett says the company hasn’t had to raise its main capital yet.

Yet infrastructure companies, iwi and private investors have expressed interest in the business.

Hiringa Energy is already working with freight and logistics company - Transport Investments, engineering firms - H2H, BTW Company, Beca and Fitzroy Engineering, and regional development agency - Venture Taranaki.

Clennett is confident hydrogen energy really is the way of the future.

He points out South Korea is replacing 26,000 compressed natural gas buses with hydrogen fuel buses.

Japan - the place New Zealand imports most of its cars from - is also betting on hydrogen fuel cars as it fears it won’t be able to generate enough electricity to only run battery cars.

Clennett maintains New Zealand could be “first to be second” in the transition.