Hgen Aims to Lower Hydrogen Production Costs by Adopting Tesla and SpaceX Strategies

Hydrogen is frequently lauded as a critical element in the future of sustainable energy, with promises to decarbonize industries such as shipping and manufacturing. However, the reality is that approximately 90 million metric tons of hydrogen produced today primarily come from natural gas, oil, or coal. This method, known as steam methane reforming (SMR), involves heating methane to release hydrogen, but it simultaneously generates carbon dioxide, a significant greenhouse gas. This process, which has been the dominant method for hydrogen production, undermines the vision of a climate-friendly future.

The need for a more sustainable approach to hydrogen production is pressing. The industrial sector alone spends over $100 billion annually on hydrogen, highlighting both the scale of the industry and the significant potential for innovation. To address this challenge, Hgen, a startup co-founded by Molly Yang and Colin Ho, is working to revolutionize hydrogen production with a focus on green hydrogen. The company’s approach involves using electrolyzers, devices that produce hydrogen through the electrolysis of water, separating it into hydrogen and oxygen. While electrolysis itself is a cleaner method compared to SMR, it still depends on electricity, which may come from a mix of renewable and fossil sources. As the energy grid becomes greener, electrolysis will become a more sustainable method of hydrogen production.

Founded three years ago by Yang, a former Tesla engineer, and Ho, who previously worked at SpaceX, Hgen’s mission is to make electrolyzers more efficient and affordable. The company's initial efforts were supported by a $2 million seed round in 2022, led by Founders Fund, and its inclusion in the Breakthrough Energy Fellows program. Now, Hgen has secured an additional $5 million in funding from Seven Seven Six, Fontinalis Partners, and Founders Fund, reflecting continued investor confidence in its innovative approach.

Hgen’s focus is on optimizing existing electrolyzer technology rather than developing new materials. Yang emphasizes that while many companies engage in materials research and development, Hgen’s strategy is to enhance the overall efficiency of electrolyzers. The company employs alkaline electrolyzers, a well-established technology known for being cost-effective but typically less efficient than newer methods. Hgen's breakthrough lies in reducing the size of these electrolyzers by a factor of twenty. This size reduction translates to lower material and manufacturing costs, making hydrogen production more affordable.

The core of Hgen’s innovation involves improving the interface between the electrolyzer’s electrodes and the liquid. Electrodes are crucial as they conduct electricity into the liquid, facilitating the chemical reaction that splits water into hydrogen and oxygen. The challenge is that hydrogen and oxygen bubbles often accumulate on the electrodes, hindering their efficiency and reducing the overall effectiveness of the reaction. Hgen has redesigned the electrode system to encourage these bubbles to detach more quickly, preventing them from obstructing the electrodes and thus maintaining the electrolyzer’s reactivity. This design innovation allows Hgen to build smaller electrolyzer stacks that can produce the same amount of hydrogen as larger systems, thereby reducing material usage and overall costs.

In addition to optimizing electrolyzer design, Hgen plans to package its technology into a 40-foot shipping container. This modular approach simplifies deployment, allowing the container to be delivered to a site and connected with minimal labor—only requiring water and electricity inputs. This containerized solution aims to make it easier for companies to adopt green hydrogen production without the complexities associated with traditional setups.

Hgen is initially targeting businesses that currently rely on liquid hydrogen deliveries, which can be prohibitively expensive—often exceeding $10 per kilogram. By providing a more cost-effective alternative that eliminates the need for liquefaction and transportation, Hgen offers a more attractive solution for these companies. The potential for cost savings and a more stable, secure supply chain makes Hgen’s technology appealing to a range of industrial clients.

Overall, Hgen’s innovative approach to hydrogen production addresses key challenges in the industry. By focusing on optimizing existing technology and making it more accessible, the company is positioned to play a significant role in the transition to a more sustainable hydrogen economy. As hydrogen continues to be a crucial element in the global effort to reduce carbon emissions, advancements like those from Hgen will be essential in making green hydrogen a viable and widespread alternative to traditional production methods.