Greenbuddies tips – December 2020

Hydrogen or electricity – what has a better chance of taking your place under the Sun?

In the current issue of our newsletter, I have decided to address at least briefly the controversial topic, which has for long divided the motoring public into two very opinion-based camps, and which probably does not yet have a clear answer. When it comes to the question what will replace fossil fuels in our cars in the future, either hydrogen or electricity would be mentioned most often. While classic battery electric cars are quite well known, with hydrogen it is different. So what is a “hydrogen” car?
It should be emphasized right from the beginning that this is not actually “hydrogen versus electricity” at all. Every hydrogen car is also an electric car. However, the energy for driving the electric motor does not flow from the battery, but from the fuel cell. The principle of operation of a fuel cell – known to mankind for 200 years – sounds like pure sci-fi to most of us. Nevertheless – yes, there is a device that converts the supplied hydrogen and oxygen into electricity. Hydrogen is fed to the anode and oxygen to the cathode. Between the anode and cathode is an electrolyte or PEM (Proton Exchange Membrane) membrane. The only waste is clean water and heat, and that sounds great! Another good news is that hydrogen is the most abundant element in the universe, where it forms the bulk of all substance. Hydrogen is all around us, there is plenty of it everywhere. It is the fuel for all the stars in all the galaxies. However, there is a small issue – we cannot extract hydrogen as oil or gas. This element is all around us, but only in compound form. So we have to produce and store free isolated hydrogen. Both are complicated and expensive.
However, by far not everyone believes that battery electric vehicles (BEV) are the right way to go, especially because of the infrastructure and the load requirements on the electricity grid. This can be clearly seen in the strategies of some car manufacturers. While announcing billions in investment in electromobility development and competing to introduce new electric cars, they are also investing in the development of hydrogen propulsion. What if it turned out that BEV are not the right way to go? Toyota, Honda, Kia, Hyundai or Daimler – they all have real hydrogen cars on the market and are making significant progress in hydrogen mobility. Daimler, for example, estimates that in 2050 hydrogen will be used as a source of energy by slightly less than 20 percent of vehicles, although even in Stuttgart, they consider hydrogen having a future more so in freight transport rather than in passenger traffic.
On the other hand, the VW Group has clearly taken the side of BEV, simply put, mainly due to the much higher efficiency of batteries compared to a fuel cell. The Wolfsburg-based manufacturer has formed its opinion on the basis a study by the renowned consulting company Horváth & Partners, which concluded that while battery cars have an efficiency of 70% to 80%, for a fuel cell it amounts only to 25% to 35%. Much of the energy is lost in the electrolysis process, which is the most common method of hydrogen production.
Proponents of fuel cell cars point out to indisputable advantages, especially the short time needed to fill hydrogen in the tank (comparable to the time we spend on refilling conventional gasoline or diesel) and the relatively long range. So what is the situation today in terms of these two key parameters?

Driving range
This is the first question of many people about an important parameter of electric car performance. Once the answer is less than 500 kilometers, they often lose interest in the car, although not always rightly so. The average daily range of the vast majority of drivers is in the lower tens of kilometers. The mentality of us drivers, however, focuses on maximizing the driving range, and hydrogen cars are to some extent a better answer than BEV. Their range is still somewhat higher than in today’s electric cars.
Hyundai NEXO promises, for example, 600 kilometers, Toyota Mirai about 500. But it is not always the case – for example, the Mercedes GLC F-Cell will ride “only” 350 kilometers at one refueling. Very generally spoken, a kilogram of hydrogen in high-pressure tanks will last for about 100 kilometers. Today’s best electric cars will actually cover 400 to 500 kilometers, which is no longer such a considerable difference. In addition, a look under the hood of a Mercedes GLC F-Cell shows that hydrogen cars are more complicated than battery cars.

Refiling and charging time
Fast refilling is the biggest advantage of hydrogen cars. It doesn’t take much longer than with conventional internal combustion cars – about a kilogram per minute. So you will spend about five minutes at the filling stand. This is a huge difference compared to tens of minutes even with “fast charging” electric car stations. However, this big advantage of hydrogen cars may soon disappear. The Tesla Supercharger V3, for instance, can handle 250 kW of charging. IONITY has already 350 kW stations, which will rapidly reduce the time you have to spend at charging stations. Nonetheless, we have to yet wait for models that will be able to handle such a high-power and high-speed charging. One such is the Porsche Taycan and others will surely come. Let’s not forget that the advantage of electric cars is the ability to get recharged anywhere, even from a normal Shuko 230 V outlet. So if you live in a family house, you can leave every morning with a full battery without losing time. No hydrogen vehicle can compete with that.
Of course, the issue of comparing the two forms of vehicle propulsion of the future is much more complicated – let’s think only of the infrastructure of electro-charging or hydrogen filling stations. A major problem in the development of electromobility will be the insufficient capacity of distribution networks. When many BEVs should charge at high speed at once, it would require a robust supply of energy, which can be a problem in some locations. On the other hand, hydrogen filling stations deployment are also not exactly a cheap and easy task – judging at least by the plan of leading German and world industrialists that there should be more than 400 hydrogen filling stations in Germany by 2023. This ambitious plan would require a total investment of around € 350 million.
In conclusion, hydrogen propulsion certainly has some advantages. However, these will be likely eliminated in a few years by a new generation of electric cars and chargers. Yes, there are still many questions, but current developments speak in favor of electric cars. While more than three-quarters of a million battery-electric cars were sold worldwide in 2018, only 7,000 hydrogen cars were registered by respective authorities. Therefore, their future will probably reside mainly in freight transport, or even public (for example, long-haul) bus or train transport, i.e. wherever very long journeys in “non-stop” mode and fast re-fuelling are needed.

Financial aspects PV projects

Being in PV for 12 years we have seen many at that time strong companies gone bust because of under estimating the level of working capital, cash flow management or the bankability. We are aware of the risks associated with it since the beginning of our market presence. Our Clients need a healthy supplier to keep up with long term warranty obligations so we introduced already from 2017 strong rules regarding financial aspects of the PV projects.
Also our belief is that only fair win-win approach is a long-term viable and beneficial for both our clients and our suppliers. These rules which we keep are the following:

  • We build offers bottom up.
    Although certainly we follow the market levels, we build the quotations based on understanding what are the fair cost, fair margin and fair salary of everyone in the our supplier value chain.
  • Positive cash flow of each project.
    We try intend avoid pre-financing the projects and keep always our operations at least little bit cash positive. This allows us to build several projects in parallel where working capital is not a limiting factor.
  • We have at least minimum positive margin on each service we provide.
    On every service we provide duly identify the real cost and add margin on top. Margins keep our company running and alive.
  • We strictly pay our suppliers on time according to the agreed contract.
    We believe that the benefits resulting from this approach where the workers and subcontractor can rely on us keeping the due dates overweight’s the benefits from financing internal structure through subcontractors. Like that we can build stable teams and long term partnerships who provide for our customers required excellence in quality.
  • We never close cartels, we never go for dumping pricing.
    We are ethical in what we do – we believe only ethical approach keep strong relations and good position on the market.

Our general rule in project finance management is to go to the detail of each individual situation and understand motivations and internal dynamic of what we do. The Client is our first priority but also our Worker is our first priority. If the Worker is happy and doing the job properly the customer is satisfied also.

Mud and other inconveniences on the construction site

Since November we are in the most demanding part of season. Not only because of number of projects, Megawatts build but also because of the weather. Since then till end March we need to count with tons of water coming down. The weather profile differs between South Germany, France and Holland, but the ultimate risk of bobcat locked in morass, box of panels sinking together with Merlo in the mud, work stopped because of ice on the roof, road lost under meter of new snow – in that season – is high. Also this year our crews are fighting with the hectolitres of rain. This is all part of our unstoppable attitude.

However – the start is earlier: we provide a quotation to the client typically 2-3 months earlier, so it means during nice summer long days. To be precise we check the length of the sunlight in December, typical rain profile in November and snowload of January… And then we preise that this year is statistically similar. And we also hope that just this Client appreciates that the conditions are too extreme and understands that the work takes longer and is more costly.

We love the work, our staff copes with difficulties but sometimes its really not easy:

Dear Business Partners,
How time flies! The festive season is upon us once again. It is a time to enjoy the closeness of family and friends, to savour the year that has passed, and to look forward to what lies ahead. Within this spirit, we would like to take this opportunity to thank you for the trust you placed in us in 2020, and which we hope you will continue to do so in 2021.
We wish you a delightful, peaceful Christmas in the presence of loved ones, and good health, happiness and success in the new year.