An ultra-green hydrogen joint venture between Sparc Technologies (ASX: SPN), the University of Adelaide and Fortescue Metals Group (ASX: FMG) subsidiary Fortescue Future Industries (FFI) is progressing further after FFI made its stage one payment of $1.8 million as part of the deal.
Sparc Technologies announced earlier this month the green hydrogen joint venture had been made binding between it, FFI and the University of Adelaide.
As part of the arrangement, the parties have established joined venture vehicle Sparc Hydrogen, with Sparc Technologies initially owning 52%, the University of Adelaide 28% and FFI 20% under stage one.
Under the deal’s first stage, University of Adelaide is contributing the green hydrogen technology intellectual property under an exclusive licence, while FFI has made its required $1.8 million payment and Sparc is funding around $450,000 and issuing 3 million shares.
Sparc Hydrogen will have the licence to develop and commercialise the technology, which is based on producing commercially-viable ultra-green hydrogen via photocatalysis instead of renewable energy and electrolysis.
Sparc Technologies executive chairman Stephen Hunt said the announcement last week was the culmination of more than four months of technical due diligence, negotiation and execution of a number of key agreements between the joint venture parties to form Sparc Hydrogen.
He said having FFI as part of the joint venture added “enormous value” in terms of project development, technology and commercialisation capabilities.
“These attributes combined with University of Adelaide’s research experience and unique skills with photocatalytic water splitting, together with Sparc Technologies’ project management and graphene expertise, makes for a formidable combination in this transformational green energy technology.”
Sparc Hydrogen joint venture
Stage one of the joint venture is expected to take about 2.5 years to complete and will involve developing a techno-economic assessment, construction of a new solar reactor, testing of optimal reactor conditions and materials under full solar simulation, and creating a prototype design for an on-sun system.
The second stage is anticipated to take two years and will comprise constructing a prototype solar reactor in on-sun conditions followed by a pilot scale plant.
In this stage, Sparc Technologies will provide $1.025 million and FFI $1.475 million in funding.
Once complete, the IP developed will be assigned to Sparc Hydrogen with joint venture ownership to be altered to Sparc Technologies 36%, FFI 36% and University of Adelaide 28%.
Ultra-green hydrogen technology
The Sparc Hydrogen joint venture is developing a process known as thermo-photocatalysis, which uses sun radiation and thermal properties to convert water into hydrogen and oxygen.
This process will not require renewable energy from wind farms and/or photovoltaic solar panels and expensive electrolysers.
As a result, capital and operating expenditure are expected to be “significantly lower” than electrolysis and other current forms of hydrogen production.
Sparc Technologies noted this technology can also be adopted remotely and for onsite use – reducing the reliance on long distance transportation and electricity transmission.
The International Energy Agency (IEA) estimates the hydrogen market will grow six-fold by 2050 from about US$150 billion to US$1 trillion.
Clean hydrogen is seen as critical in the global decarbonisation process as it can be used in more power-intensive sectors including industry, heading, transportation and power generation.
The IEA says about US$90 million of public money needs to be invested in clean energy innovation worldwide, with around half of this to flow into hydrogen-related technologies.
According to Sparc Technologies, if the staged Sparc Hydrogen research and development progresses as planned, the entity will have an “advantageous position” over conventional green hydrogen developers.
As mentioned above, these advantages are seen in both cost and scalability, and the ability to establish operations in remote areas.
The joint venture aims to have a commercially ready technology that produces ultra-green hydrogen for under $2 per kilogram.