UK fuel cell firm Ceres posted higher revenue for the year to 30 June while ramping up production from its new Redhill factory and increasing its order book.
The firm counts Bosch and China state-owned Weichai Power as commercial partners and key investors. The two injected a further £49m of equity into Ceres in January. As of 30 June, that left Ceres with £108m in cash to invest in further growth. Reversing its technology to produce hydrogen via electrolysis is high on the agenda.
Bosch push
Bosch is now manufacturing cells under licence for its own stacks and systems in Germany using Ceres’ technology – the first third party to do so.
“We view Bosch’s decision to increase its investment in Ceres in January 2020, from 4% to 18% of the enlarged issued share capital, as a strong signal of its intention to move towards future scale up to high volume manufacture of [our] SteelCell,” stated CEO Phil Caldwell.
The company plans to scale up the size of its fuel cell systems in the coming years, moving from 30kW to hundreds of kilowatts, added Caldwell.
Hydrogen
More broadly, Caldwell said Germany’s commitment to hydrogen and the EU’s strategy published in July presents significant opportunity, alongside core markets such as China, Japan and South Korea.
As such, the company is increasing its investment in developing its technology as a solid oxide electrolyser – essentially reversing the fuel cells to produce hydrogen from renewable power.
“Over the past 18 months there has been significant momentum around the potential for hydrogen,” said Caldwell. “Ceres has a credible path to participate not only in delivering hydrogen at scale but also, due to the characteristics of higher temperature electrolysers, in utilising waste heat making this technology particularly useful in decarbonising industrial processes such as steel and refineries.”
He said more than a quarter of the company’s technology patents could equally apply to using the fuel cells to produce hydrogen.
Meanwhile, the company is also working on a “strategic relationship with a global engineering consultancy with engineering services and business development capability” in order to drive growth.
Ceres posted revenues of £19.9m, up 21 per cent, though a higher adjusted Ebitda loss of £6.5m (£5.9m the prior year) which it said reflected continued investments to enable growth.
Scale grail
Caldwell told The Energyst that the company aims to be the “the ARM of the clean energy sector”, scaling its business through partnerships and licensing. Hence seeking to secure a partnership with a global engineering consultancy.
“We’ve been very successful in getting partners on board, but if we want our technology to become the go-to standard for fuel cells, we need it to be adopted much more widely by the world’s engineering community,” said Caldwell, adding that the company hopes to make announcements in the coming months.
In terms of scaling the capacity of its units to hundreds of kilowatts, Caldwell said there is “technically nothing holding that back”.
“We’ve gone from single kilowatts to tens of kilowatts, the next logical step is hundreds of kilowatts,” said Caldwell. “We can deliver higher power in response to market demand – and that is where it is going.”
Hydrogen ready?
Ceres’ power generation systems can already run on natural gas, hydrogen or blends. “So that is our stance, we can already generate power more efficiently and more cleanly – and the technology is hydrogen ready for the future,” Caldwell added. “There is no risk of stranded assets.”
On the flip side, Caldwell said the company’s push into electrolyser applications using its technology is some years from commerciality.
“It is the same technology running in reverse… A lot of same patents apply,” said Caldwell. “It’s early days, but we see it as a pathway …. something for partners to licence from us in three to five years.”
While Ceres’ business is almost all export, Caldwell suggests it “wouldn’t take much” from the UK government to build on the commitments to hydrogen around the world, and more recently in Europe, where Germany and the EU have outlined multibillion investment frameworks.
“It just needs clear commitment and policy targets. Then private money will follow; institutional investors and the big corporates will start to develop products,” said Caldwell. “But the rest of the world is not awaiting for the UK – it’s already happening.”
