HydrogenOne (HGEN Follow | HGEN ) announced it has agreed to invest €10m (£8.4m) in Netherlands-based hydrogen pipeline company Strohm Holding. HydrogenOne is investing alongside Shell Ventures, Chevron Technology Ventures, and Evonik Venture Capital, in the first close of a funding round totalling €14m (£11.8m).
HydrogenOne said it may also invest up to a further €2m (£1.7m) in the second close of this funding round, expected later in 2022. As a result of the investment, HydrogenOne will gain a board seat.
Strohm is a supply chain company, focused on offshore wind-to-hydrogen. The company is a leader in TCP pipeline infrastructure whereby green hydrogen generated at offshore wind turbines can be transported to shore. TCP is more cost effective than steel pipe and has c. 50% less manufacturing greenhouse gas emissions. The technology can be used to safely transport hydrogen, CO2, ammonia and water. This fundraise should enable Strohm to scale up its plant capacity in the Netherlands.
Simon Hogan, Chairman of HydrogenOne, commented: "We continue to demonstrate the impressive pace and quality of our capital deployment through this latest investment in Strohm. This is our ninth private investment since the launch of our clean hydrogen-focused fund and an excellent addition to our growing portfolio."
Martin van Onna, Managing Director of Strohm, said: "We recognised the fit between clean hydrogen and offshore wind at an early stage, and developed a compelling pipe solution to support it. TCP can transfer up to nine times the amount of energy compared to a cable, and can be used to store hydrogen, thereby increasing the uptime of offshore wind farms. The pipe's flexibility, lack of corrosion, fatigue and embrittlement make it the superior pipeline solution for offshore wind farms, generating hydrogen.
The investment by HydrogenOne allows us to increase our capacity to service this exciting and growing market."
Soaring oil and gas prices, coupled with the global transition to net-zero carbon, have led to a surge of development in hydrogen, seen as a viable alternative to fossil fuels where other green technologies may struggle.
HydrogenOne is the LSE's first investment fund dedicated to clean hydrogen. The company recently reported Q2 results where it detailed two new investments made in the quarter - Elcogen, a solid oxide fuel cell and electrolysis company worth £20.5m, and German project developer HH2E, worth £5.1m. These investments brought HydrogenOne's total number of private portfolio positions to eight. In total, the company had invested £95m in low-carbon growth, with a further £500m+ pipeline of opportunities.
Today's investment in Strohm represents another key piece of puzzle for HydrogenOne. Over 9 GW of offshore green hydrogen projects have been proposed in the North Sea basin, with further multi-GWs growth potential, alongside Carbon Capture, Utilisation and Storage, all of which will require specialist pipeline solutions at scale.
HydrogenOne's cash reserves stood at £29.9m at the end of Q2, a £3.5m decrease from the previous quarter, due to the aforementioned 2 new investments made in the period, worth £25.6m. That capital deployment was partially offset by the £21.5m in proceeds raised in the company's oversubscribed placing. Investors have shown excitement for the bold moves made by HydrogenOne in the clean H2 space, which appear to have paid off so far.
Some recent highlights from the company's existing portfolio: Sunfire received new investments from Amazon and funding from the European Commission for its electrolyser developments. HH2E announced a 6,000 tonnes/year clean H2 project in conjunction with MET Group in Germany. Bramble Energy was awarded UK Government funding for its fuel cell technology. Cranfield Aerospace announced a supply agreement for 10 H2-fuelled planes. And NanoSUN was awarded £450K by the UK Government to expand its H2 refuelling infrastructure.
HydrogenOne stock has remained mostly flat in the past year, defying challenging economic conditions and the broader downturn in equities.
Dr JJ Traynor of HydrogenOne was a guest on the Vox Markets podcast in July and spoke with Justin Waite regarding the company's investment strategy. Click here for that conversation.
For more news from the hydrogen sector, see our Hydrogen Roundup from 29 June, and recent news from Atome Energy and Johnson Matthey.
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