HydGENE-Renewables

Paul Howdle: Good afternoon everybody who's joined us and the HydGene team here, for the HydGene Q&A. Welcome, my name is Paul Howdle. I'm moderating this session with you this afternoon. I've also had the great privilege of having mentored the HydGene team over the last year or so, as they've gone through both stages of the ON Prime and ON Accelerate team. Let me hand over to the CEO of HydGene, Louise Brown, to introduce herself and the team.

Louise Brown: Hello, Paul. Thanks for that. I'm the CEO of HydGene Renewables. Joining us today in the room are six of us in total. Individually, we'd just like to introduce ourselves.

Robert Willows: Hi there. I'm Robert Willows, I'm the Chief Scientific Officer, and I've been working on this project for quite a long time, and I'd like to pass it on to introduce the rest of you. I think Jocelyn is up next.

Jocelyn Johns: Hello, I'm Jocelyn Johns. I'm doing the marketing and distribution for HydGene Renewables. I'm so excited about what we have got to offer. It's a fantastic example of science solving really big global problems with our renewable energy. Thanks.

Kirsten Petroll: Hi, I'm Kirsten from the pitch. [chuckles] I'm basically involved in the bioengineering and implementation of our tech. I hand over to Tony.

Tony Jerkovic: Hi, I'm Tony and I'm working on the engineering and analytics side of our hydrogen production. Yes, I'll pass you on to Sam. [chuckles]

Sam King: I'm Sam. I'm involved in the research and development of our cells, particularly, around the bioinformatics. Thanks.

Paul: Thank you very much for the introductions from Team HydGene. Let me now open the floor with the questions that are coming in here thick and fast. Let me start with one here. What's so special about hydrogen from HydGene when compared to renewable hydrogen made from electrolysis? I think this is one for you, Louise.

Louise: Thanks, Paul. Green hydrogen is very much a topic of interest and investment is being made in this area at present by the government. Green hydrogen can be made by electrolysis. Electrolysis is the splitting of water to produce hydrogen, which is green hydrogen and oxygen. It's only going to be green if it's produced by renewable means, so for electrolysis, that would be by solar panels or by wind farms.

Electrolysis has been quite a costly and expensive way to make hydrogen because you need large infrastructure, and the hydrogen is then made on-site and needs to be transported and stored to where it needs to be used, and that's quite expensive and costly to do, whereas, with our technology, we are also green hydrogen. We have a renewable feedstock, and when we produce our hydrogen, we don't need to move it about to where it's needed, we're producing the hydrogen on-site, and we're also producing it when it's needed by the user, so we don't have to store it as well. We can produce it 24/7, around the clock. We have a very small footprint, and we don't need to be located near large water reserves like electrolysis.

Paul: Thank you, Louise. The next question that's coming here is one for Kirsten, I think. It's coming over both through chat and the Q&A here. What do you expect to be the final cost of electricity in dollars per megawatt-hour or dollars per kilowatt-hour, and how do you source the raw input material: sugar?

Kirsten: We've modeled it and based on the sugar cost but also the maintenance cost. Our electricity wholesale cost would be 16 cents per kilowatt-hours. In terms of levelized cost, which can compare our tech with other energy solutions, it will be translated to a $1.40 per kilowatt-hour, and this is pretty much where the diesel would stand, so the levelized cost of diesel is about $1.40.

The levelized cost of solar systems is a little bit less, but with our technology advancing and with the fuel cell cost decreasing, we do hit those competitive levelized costs of energy pretty much. Thank you, Louise, for the slide. For the sugar feedstock, we have been talking with the Queensland Sugar Limited, which are one of the main sugar mills and refineries in Australia.

The Australian sugar market is really extensive, and we basically would go into a contract with those sugar suppliers, and source the sugar straight from them. It can also be sourced from overseas, or it can also be sourced from different waste byproducts from refinery processes.

Paul: Thank you, Kirsten. The next question I'm going to hand to Tony. At what scale can the HydGene system operate at, or what do you intend to scale to, in terms of the size of the system? You're on mute there.

Tony: Sorry. Now, when you say system, can you specify what system you're talking about? Are you talking about a huge megawatt system or a--?

Paul: I think the focus of this question, Tony, is probably in terms of initial target markets and the different domestic versus commercial applications for the system.

Tony: Right. We're initially starting it at a scale of 5-kilowatt systems, to replace diesel generators. Now, these can, obviously, be scaled up in the future with more infrastructure required to do the development into the large-scale systems. Yes, we can potentially scale up here much higher than that, potentially, to power businesses, maybe factories, that kind of thing.

Paul: Great. A related question here around the preferred size of installation, what sort of cost-efficiency does HydGene deliver with, as the size  scales, do you anticipate? Still with you, Tony.

Tony: Are you talking about cost efficiencies?

Paul: Yes.

Troy: Yes, I'm not really sure about that one.

Paul: It might be better if it-- Kirsten, maybe?

Kirsten: Yes, I think I can jump in there. One of the major components for our device is the bacteria and a fuel cell. Now, with the bacteria, as we improve our R&D and improve our bacteria production process, we can actually decrease the cost over 90% by various simple engineering strategies. Now, that is one thing. The other thing are fuel cells, and as fuel cell demand increases, the manufacturer can start to go into bulk production, which allows it to be automated. That is a major driver to decrease the costs. As we do-- Sorry, can I see that question again, just to make sure?

Paul: It's about the cost efficiency and how that improves with larger systems.

Kirsten: Basically, by advancing fuel cells but also advancing our tech as we scale up, we can decrease the cost by 90%. That's where we see-- Yes, I'm not sure if I answered this question.

Paul: Yes, that's pretty good.

Kirsten: It kind of disappeared, so sorry.

Paul: [chuckles] Let me just answer one of its questions because even I can answer one of the questions here. Which uni are you from? We're from Macquarie Uni in sunny Sydney.

Louise: Yes, we're all based at Macquarie University, correct.

Paul: One for you here, Louise, while you're off mute. What's your go-to-market strategy?

Louise: As Kirsten talked about in our presentation, our first go-to-market strategy is, very much, those in remote communities or those that are off-grid so are relying very much on diesel and diesel generators for energy or to fill that renewable gap, so they might be using solar or wind, but that gap that naturally exists with renewables gets filled with dirty diesel generators. Our first customer is to focus on small communities, small off-grid and remote communities, but then the mining industry also has challenges in this space. There are a large proportion of mines up to about 40% that are also off-grid and rely on diesel, so our first go-to-market strategy is the diesel generation and diesel market.

Paul: Okay. Thank you, Louise. One for Rob here, that's come in and just shot to the top of the question session here. How does HydGene's technology compare with CSIRO ammonia cracking technology?

Robert: CSIRO ammonium cracking technology is a different technology in that it's to store hydrogen as ammonia and convert it back to hydrogen so you can ship ammonia. You still have to make the hydrogen to make the ammonia, so our technology is mainly to make sure the hydrogen using renewables. I think CSIRO technology, the hydrogen can come from anywhere, so it's not really related to renewables. I hope that answers the question.

Paul: Another aspect here is the elimination of storage is an aspect of the hydrogen solution here [inaudible 00:11:00] storage vehicle.

Robert: I guess so. I think, even so, they're still different usage cases. Our technology is still quite rapid in terms of converting sugar into hydrogen and so overcomes that transport costs associated with hydrogen.

Paul: I've got you, Rob. I think the next question has your name, as well, associated with it. How reliable are the designer bugs? This is a comment that I can relate to, just keeping cost posting systems stable is hard. I'm afraid anything more complex.

Robert: Yes. Surprisingly, this is not so much a fermentation technology is a cell-based technology. Our cells once we've got them in a state where we would use them to make hydrogen, we've done testing of nine months, and they're stable and in storage for six months, I think we lose about 30% of the activity after six months, and after that, you'd want to replace them, so this is quite good. The cells aren't actually growing, unlike a composting system where your cells are growing and turning over, we make the cells, and then we use them to make hydrogen. It's quite different from those types of systems.

Paul: Right. Tony, I think I've got two interrelated questions for you here. The first one is, what's your vision for the product, as in will one unit be enough to power a household? The related question is, how small could you make a complete system, and could it be portable? You're on mute.

Tony: Sorry. I don't know about portable because you have about 50 liters of cells, including the sugar feedstock. For a household, we have an image at the end of our pitch if you remember of these two units sitting under a window. In terms of scale of size to power a house, that's a good example of what the unit would look like in a household situation. Essentially, these can be delivered anywhere. In terms of portability, you can take these to a remote location, thanks, Louise, and set it up in a remote location, fill it up with the components, and that will replace these diesel generator setups that you would normally find in these remote locations.

Paul: Thank you, Tony. [crosstalk] On you go, Joss.

Jocelyn: Yes. I just wanted to say when we look at it compared to diesel generators if you've seen, the diesel generators come in various different scales, and that's an opportunity that we have as well that we can do various scales. It would depend, obviously, on what size it would be as to exactly how portable it is. You can, obviously, get generators that are so small that you can take them camping or throw them on the back of a ute, and then you've got really large ones that you would obviously need to get delivered by a truck, but yes, there's, definitely, a possibility for portability.

Paul: Thank you, Joss. Thank you also for Sherman coming in on both channels here with a question, it's not a question, it's basically an offer to invest already. That is just magnificent. Sherman, we look forward to concluding that conversation with you really, really quickly and for you to be the first of many.

Louise: Can I just say, thanks, Sherman. We'll definitely reach out to you. We know how to find you, so you'll hear from us very, very soon.

Paul: Thank you, Sherman. Back to Rob here. This one is for you. Would you please describe the IP position?

Robert: I mute myself. We've submitted a provisional patent around the technology and some of the ways in which we do it. We'll, hopefully, be going forward with the PCT on that in the near future. We've also got an enormous amount of know-how about how to actually generate the cells, which produce the hydrogen. Some of that know-how is in the patent, and some isn't in the patent. I think I'd worked in this area in bacteria for about 30 years, so there's quite a lot of know-how, that is for myself as well as the others in the group, of how to do this as well. I think that's probably the main IP positions.

Paul: Thank you, Rob. This one's for Kirsten. The first comment here is congratulations to you on winning the Stanford scholarship. I've got that from two different people. The question that follows on to the congratulations is, have you looked into other bugs that can do similar things?

Kristen: Yes, thank you. It's a really good question. The reason we use the bacteria that we use right now is because they're a really good model organism. There are a lot of tools available to engineer this type of bug. What we've seen is, with the start of this project, we actually improved the production rate of our hydrogen already by a thousandfold, and we improved the yield of our production by sevenfold.

These are immense steps forwards, just by using these tools and this particular bug. It's actually interesting because the original system that we used comes from an algae. It's not the algae that you find on the beaches, it's actually an algae you can't really see, but that algae itself is so inefficient in doing this that we adopted that system and put it into our bug, and this now actually does produce hydrogen really well.

The reason why this bacteria is really promising for our type of research or engineering is it's highly engineerable. We can do a few genetic modification and change the whole feedstock that it can consume and produce the hydrogen from. It's quite a useful bacteria to work with, but there are bugs that are doing this but just not as efficient and as controllable as we do.

Samuel: Just to jump in quickly. Part of what I'm doing as part of the R&D is looking at analogous enzymes that are doing similar things and testing them to find the optimal system for our bugs.

Paul: Thank you, Sam and Kirsten. We've just had another question, I think, from somebody who's just joined us that probably wasn't on the line earlier. The team of HydGene are all based at Macquarie University here in Sydney. Let me hand this next question to Louise. What's the total addressable market globally?

Louise: Yes. Thanks, Paul. There's two markets. There's the hydrogen generation market, and at present, that's estimated between $30 to $50 billion worldwide and expected to grow to nearly $150 to $200 billion in five years' time. There's a lot of investment going on in this area because we appreciate the need to be able to change to cleaner energy forms. Then there is the diesel generator market, which is our first go-to-market. In Australia, it's an $800-million market. Domestically, we have about 100,000 units of diesel generators sold per year, but globally, that market is worth up to about $12 billion to $20 billion, really big in Asia, so China, India, very reliant on diesel generators.

Paul: A lot of opportunity worldwide, really. Next question, how often would a unit last without maintenance? Probably one for you, Tony.

Tony: Yes, thanks, Paul. We don't know in terms of the unit itself, but we know that our cells will last anywhere between six months to a year. Now, the leasing model that we have proposed will help us to better understand that and also optimize the system. As for now, the unit should be pretty low-maintenance. There's no mechanical parts, unlike a generator, which has many mechanical parts and requires lots of maintenance. Essentially, it's very simple in its design. We just need to know the performance of the cells and how long they're happy to keep working in the system.

Paul: That's great. Thank you, Tony. Next question is for Kirsten. What quality of feedstock is required? Does it need to be highly processed or granulated, or can it use relatively cheap waste?

Kirsten: We are in the process to find out, I'd say. Our bacteria are quite robust, and it's known that they can tolerate a lot of different media, this is known. We've been using quite a simple sugar at the moment, just for our lab research reasons. We do see that depending on-- The thing with this bacteria is if it doesn't tolerate a certain feedstock, we may go around by having certain pre-treatments into our process. We need samples to find out how the bacteria handle different feedstock.

If we use molasses, for example, which is a sugarcane waste or byproduct, that has been shown that there's bacteria tolerance. This shouldn't be too much of a problem. If yes, then we probably can go around it by doing some different engineering approaches.

Paul: Thank you, Kirsten. Back to Tony. You mentioned the bacterial cells aren't growing. How do you keep them alive for the next 6 to 12 months?

Tony: We keep them in a state of suspension in a stabilizing secret recipe. Essentially, they're very stable, like we mentioned before, up to 6 to 12 months. They're not technically growing, so they're not really requiring any support to be alive. We've also done some preliminary tests where we do not kill them, but we deactivate them, and they still seem to work [crosstalk]

Robert: Sorry, I might just jump in there. [chuckles] [crosstalk] The cells don't need to be able to reproduce. They don't need to be able to divide for the longevity. The enzymes, think of them as an enzyme factory without being necessarily viable. The enzymes themselves seem to be stable for long periods, at least under the conditions that we've been testing them.

Paul: Thank you for that. While I've got you, Rob, this one looks like it could be for you as well. Is the generator self-power-generating?

Robert: A generator self-power-generating? It could be. [laughs] You still need a feedstock. You're feeding them sugar, at the moment, or some other carbohydrate source. The carbohydrate is being turned into hydrogen, and we can use that hydrogen if we require pumps or other components that require power that's part of the system, which we currently don't need. We're just using gravity to feed the system, but that may change in the future. We could use the power generated to power any components of the system that we might need.

Paul: Thank you, Rob. Here's one for Joss. How do batteries compare?

Jocelyn: How do batteries compare to us? Actually, I've got a slide that talks about a bit of competition because one of the things we have to think about is where we sit in the whole energy space. Obviously, one of those things is you can store energy in batteries. Just to bear in mind, when we're looking at batteries, we're looking at expensive materials and rare metals, whereas, in our particular case, you're looking at a biological system, just producing hydrogen on-site and on-demand.

Here, you can see we've got a slide just showing some of our competitors that we think about as our competitors, the diesel gen-sets, diesel generators, you can see up here in a few different things that can power things on-demand. Sure, you can fire them up at any time, they're reliable, but they don't have that clean environmental side that we have. They're portable. Coming back to batteries, I'm looking at batteries here.

We only really see them as competing with us in the aspect that they're one of the few things that can provide you with electrical power without making noise because you need to make that originally to charge up that battery. That's one way of looking at it. We see our cells as being a really good device that can work compatibly with other environmental things such as solar and wind when you create a complete remote area power system, where you've got your solar, you've got your wind.

When the sun's not shining, the wind's not blowing, you typically have something like a battery and then a diesel generator that backs up that power in between. We see ourselves as slotting in and initially just replacing that, but we also see us potentially competing, at some point, with something as big as grid power because we may become a more competitive renewable power for any house. I hope that helps.

Paul: Thank you very much. Next question is for Louise. What are the market opportunities than energy in diesel generators do you have?

Louise: We're making hydrogen gas. Hydrogen can be used for a generator to make electricity, but it can also be used for heating as well. Another big opportunity for us is to produce hydrogen for the gas network. There's a big push, at the moment, to decarbonize our natural gas network. We can make the hydrogen and feed it directly into the pipeline system. There is also other industries that rely on hydrogen, steel manufacturing, a huge industry.

Maybe we could bring it back home with the hydrogen that we make here. Hydrogen is also used to produce fertilizers and ammonia, another massive market opportunity for green hydrogen. Also, it's used in a lot of food processes as well. To make butter, you need hydrogen. Our food-grade hydrogen would go well into those processes. Many different markets for green hydrogen.

Paul: Just related to that, Louise, while I've got you, what volume can you generate hydrogen at? Would it be at a useful scale? I think you've probably just touched on that, now, maybe a little bit expansion, perhaps.

Louise: Sure. While we're in a lab-based environment at Macquarie University, there's limits to how much we can make on-scale to demonstrate how useful it can be. We know that our system is scalable. We've shown that, so we've done small amounts of growth, and we've been able to scale that to the limits that we can do within the university environment quite safely. Our system, we project the first generator, we're hoping, is large enough to be able to power a house.

That's the first prototype that we want to build. That is the prototype that we want to install a few of those outside of the university environment to get better ideas of how robust our cells are, how much hydrogen can they produce, how long can they produce it for, and is that continuous production possible?

Paul: Which circles back nicely to the question around the target-addressable market because if you think of it basically as being every house, then the market is massive. Here's a question for Sam here. What's the CO2 impact of HydGene's technology.

Samuel: A good question. There's actually no net CO2 emissions. It's is part of the metabolic pathway that CO2 is produced when you're making hydrogen. All that CO2 has been trapped from the atmosphere when the renewable plant material is photosynthesizing, to begin with. In the end, there's no a net change of the CO2 produced, but additionally, on the CO2 part of things, we've spoken to some gas companies, and they're telling us that the CO2 we'll produce is food-grade, and they're very much interested in buying that. When we hit a scale where we can trap the CO2 as well, that's another potential product and revenue stream for us.

Paul: You'll effectively be negative CO2, which is a beautiful thing. Back to Louise, how do you expect to use the $100,000 seed funding that you're looking for?

Louise: I think I just touched on this a little bit. What we want to do with that seed funding is our tech trials. We want to build several prototypes to be able to employ out there in the real world with customers that might already be involved or have other wrap systems with solar and wind and see how that integrates into the energy supply for their homes. The first 100K is really important to us for helping us upscale fermentation of our bacteria. We need to be making more cells, and that's not something we can do in a university environment so that the funding is very much to look at fermentation technologies.

Paul: While I've got you, Louise, the next question, I think, has your name on it as well. There are some great aid opportunities at the moment in Asia park, have you looked into these?

Louise: Yes, it's huge markets, lots of interests from Japan, South Korea, but even over in Europe, in Germany, Canada as well, California, there are definite hydrogen hot spots globally. It's very much the market, domestically, is to then produce hydrogen here and export it to these other countries. That's what the government is currently looking at. Right at the beginning of this session, we talked about the cost, about storage, and transport.

The export market will be quite expensive to be able to do that effectively and move large amounts of hydrogen to these countries that are looking to change their energy supply routes. Where we're a little bit different is we won't be exporting hydrogen that we make here. We can actually make the hydrogen where it's needed. We would export our technology, which is our cells. Those customers or countries that are interested in transforming to hydrogen can grow their own energy.

Paul: Thank you very much. One for Tony here. What's the largest scale prototype you've built so far?

Tony: Thanks, Paul. I can show you on the screen right now. I can just give you a quick demo of it. I'll just share my screen. Give me a moment. Can we see that?

Paul: Yes.

Tony: That'll just give you a quick play of that.This is our biggest demo. That's a one-liter-size device, and this is doing the testing stages, and we're just running hydrogen through the system to make sure it's running as we expected, and we can get some voltage and watts and data that we need to further progress what we're doing with the prototype.

Paul: Yes. This is great stuff. Thank you, Tony. Here's one for Kirsten, discussing the business model and the selling price. What's your eventual expected selling price for a commercially available model?

Kirsten: Yes. Thank you. We have a good slide for this one as well, Louise.

Louise: Kirsten, I'm just going to jump in, which slide do you want? The average home versus the [crosstalk] user or--

Kirsten: The one comparing, the table where we have now and in the future.

Louise: I'm just sorry, one slide.

Kirsten: The other one.

Louise: Yes, one backwards. Got it.

Kirsten: The cost of the device, as it stands now and predicted for the next 12 months, would be around $10,000. In the future, as the fuel cell price drops, it's projected to drop by 50%. Actually, we predict to have around $5,000. If you compare this with a 4, 5-kilowatt generator system, this is pretty much in the range of a diesel generator and even lower. Yes, I hope that answers the question.

Paul: That's great. Thank you, Kirsten. This work is one back for Tony. What are the non-hydrogen byproducts of the fermentation process? What form are they, gas, liquid, or solid?

Tony: Thanks, Paul. I'm not sure what you mean, maybe Rob could take this one.

Robert: Repeat the question.

Paul: What are the non-hydrogen byproducts of the fermentation process?

Robert: We get hydrogen and CO2, the CO2 we can capture. At the moment we get two-parts hydrogen for every CO2 we produce, and that's about it apart from-- We never really produce any other byproducts apart from a few organic acids, and we're looking at recycling them in the growth.

Paul: Then, of course, as hydrogen feeds into a fuel cell, the output is water. Thank you for that. Now, just on the CO2 piece, I'm conscious that we are the busiest team here in terms of the number of viewers. For those of you listening in right now, many thanks for voting with your feet or ears or keyboard or whatever the expression should be and tuning into the HydGene group here. I might just ask, Rob, while I've got you, just to circle back on the CO2, to revisit Sam's response for any newcomers that didn't hear Sam's response around the fact that we, effectively, got a negative CO2 output, potentially.

Robert: Yes. It's net-zero CO2 because we're using renewable carbohydrates. Plants are made up of fixed CO2 to make the carbohydrate and then we're converting that back into CO2. There's no net CO2 emissions from this product. That's one thing, and I just want to emphasize that because we're not growing the organisms in the device, the things that we make at the moment, some organic acids, we're trying to minimize that production in the liquid phase, but the only thing we produce is CO2 and hydrogen in the flow-through system.

Paul: For those that have just dialed in recently, the beauty of the CO2 that comes, that of the HydGene system is that it is a food-grade. There's already interest from some of the food-grade gas companies inquiring about making use of that, hence my comment about effectively being CO2 negative, not quite right scientifically, forget being licensed there, but in principle, there's a good application for it. Next question is back to Tony. Apart from a house, what is the largest possible facility you think this will be able to power as the prototype, as the solution develops over time?

Tony: Thanks, Paul. That's anyone's guess. We can go pretty large as we increase the rate of hydrogen production from our cells, we'll decrease the required volume to get the same amount of hydrogen. Over time, you could build several-thousand-liter facilities that can-- Again, we don't know until we start to see what levels we can get to, which we're already exceeding our expectations. It's looking pretty good, I'd say at least potentially power something like a factory or something.

Robert: Yes, or a small community. At the moment, the rates that we can produce hydrogen, we only need about 20 to 50 liters to produce a kilo a day. In terms of the volume, if that's scalable, we can produce a ton a day with 20,000 to 50,000 liters. As Tony said, we're improving the rates of production almost every month, at the moment, as we're improving the properties of our cells so that that number will come down.

Paul: That nicely answers the next question here of how many kilograms of hydrogen you could make a day. As you scale up, basically, it can be measured in tons as opposed to kilograms, which is very, very scalable. I'm going to circle back to one of the earlier questions, for the benefit of those members of the audience now that have tuned in recently and didn't hear one of the opening questions because it's one of the particularly compelling aspects of HydGene, given that there's so much excitement in the press and focus from government about developing the so-called green hydrogen. This was the question for Louise right at the beginning, what's so special about HydGene's hydrogen when compared to renewable hydrogen made from electrolysis?

Louise: Renewable hydrogen from electrolysis, which is the splitting of water, requires water, to start with. You need large amounts of water, but then the renewable part comes into it because the electrolysis process needs to be driven by something like wind farms or solar. When you make green hydrogen or renewable hydrogen from electrolysis, you need to be making the hydrogen gas where those renewable forms are. You're making it not necessarily where the customer requires the hydrogen or the customer who wants to use the hydrogen.

Once it's been made by renewable electrolysis, it needs to be transported or stored, and that's quite costly to do. Estimates are it's roughly between about $6 to $8 a kilogram at the moment, by electrolysis, to make hydrogen, and that's starting to be competitive with the cost of diesel. We're just as competitive with electrolysis, but our advantage is, as Rob and the others have been saying, our continued improvement in our cells.

Our engineering of our cells allows us to make more hydrogen and make it faster. Our prices will continue to drop, but the real advantages of our technology is we can make the hydrogen where it's needed. Where the customer needs to use it, we can make it on-site. That eliminates, again, those transport and storage costs, which can add up to about 80% of the price of hydrogen.

We can do it around the clock. We don't have to wait until the sun is shining or the wind is blowing. We can make hydrogen around the clock 24/7, and we can do it in the dark. Our footprint for doing this is quite small as well. Our cells will be in a tank-based system, so we're not taking up large amounts of land. They're quite different technologies, same output. Together, we will replace diesel, but we have a greater scope to move in terms of price because we can continue to improve our cells to make hydrogen gas more efficiently.

Paul: Thank you, Louise. The next one is for Tony. When will a prototype that is large enough to power a home be available?

Tony: All right, thanks, Paul. Actually, I might pass this one on to Kerstin if you don't mind, Kerstin, thank you.

Kerstin: We anticipate it to be ready next year, pretty much. The tech that is required is developed, but we need to upscale, and that requires to upscale our fermentation. Upscaling fermentation, yes, so there we go. Pretty much, for now, we're working on a 3-watt prototype. Let's say an energy-efficient house can be powered with a 1-kilowatt system. A bigger household usually requires 5 kilowatts.

We already have the fuel cell that is required to build this prototype, but it is our cells that need to be upscaled fermentation which we're working quite heavily on at the moment. Next year we hope to launch our first minimum viable product. We will have, soon, on our website, www.hydgene.com, we actually have newsletter signup, so you can also sign up. If you want to be trialing with us and our prototype or reach out to us in any way, we're always happy for people that are into new techs to try them.

Robert: Just an update as well, the system that Tony showed previously in the video is a 30-watt system. We just made the cells for that system to verify that it works. We've got a 3-watt system. Tony had that video if anyone is interested, that's a really small large-scale system.

Paul: While Tony is just looking for that video, Tony, I'll just throw this next question also at you which is referencing the dispatchability of HydGene. How quickly can the system turn on and off in line with electricity demand?

Tony: The system will have a Lithium battery integrated into the system. That's a small battery that will be there to give you the immediate power when required. The system itself may take about 5 to 10 minutes to get up to the levels required to generate on its own, but like I said, that buffer battery is there to get the system going. As soon as you switch the light on or turn your TV on, it'll come on immediately. The power that it consumes during that process will be recharged once the hydrogen is being generated and then will top up that battery so when you leave it, just start it up again. There you go. It's immediate power.

Paul: Immediate power, dispatchable power. This one is for Louise. Have you secured the IP, and have you spun out yet?

Louise: Yes, we've got the IP. We have a provisional in at the moment that covers the engineering of our cells to make the hydrogen gas. That's quite broad in what it does cover for us. We're currently working through the stages of renegotiating with our institution, with Macquarie University. We're looking at the next six months to go out alone. The support of the university is very important because that's where a lot of expertise and skills are, especially at Macquarie University where there's a very big focus in synthetic biology, which is really what this project is about. Our association with Macquarie is likely to be ongoing, and we're working through that at the moment.4

Paul: Thank you, Louise. Here's one for Joss. You've already talked a little bit about the comparison with batteries but this question is, are there any competitors doing something similar?

Jocelyn: Sorry. I'm just thinking of competitors doing something similar. I think the thing is that essentially, we're making hydrogen. When you look at hydrogen production right now, globally, 96% of that comes from fossil fuels. It's actually a very different scenario. It's just that 4% that's done renewably, and that's where you're looking at, for example, the electrolysis. There isn't actually anyone that's using a biological system right now to make hydrogen at a commercial scale.

Paul: That's pretty compelling. Back to Louise, what are the next steps for the HydGene team?

Louise: Our next steps are, very much, to do our tech trials with our prototypes that we're looking to build up to five prototypes and take them out of the lab to get some real numbers on how well our system is working. How much hydrogen can we produce? How long can we produce it for? How robust are our cells out there in the real world? That's why we've got that ask for a 100K because that's going to help us grow the amount of cells that we need for these prototypes.

That's one of the next steps for us in the lab, but we're also continuing to improve our bacterial strains, so using synthetic biology, engineering of the genetic pathways, and how genes are placed and in what order. We've got a lot of strategies that we're still working on. That's going to improve both the amount of hydrogen we can make and how fast we can make it.

I think Robert mentioned earlier in this session that every month, we're getting continual improvement on our cells. That's really exciting for us to see that. We're not wondering what to do next. I think we have a lot of options and a lot of plans for many different genes and pathways to play with. It's been really exciting to see how quick we've moved with that bioengineering side of the project.

Paul: Very good. This one is for Kirsten. Is there a possibility of lowering the cost to less than US$1.50 per kilogram of hydrogen?

Kirsten: Yes. We are aware that the target for hydrogen is about A$2.50. I guess this is read as US$1.50 that's it's coming from. It's an interesting one because we modeled, with our improved bacteria strain, that our production of hydrogen may be around A$3.70. The cost is mainly coming from the sugar feedstock. The current, the one that we used for the modeling is an average sugar class in Australia.

If we can have the cost for because we use either byproducts or residual products from other generic processes or if we source the feedstock from a cheaper source, then we can hit that target, but it's pretty much depending on the development of feedstock costs and also which other byproducts we can utilize. This is an ongoing research question that we tackle. We are aware of this hydrogen target cost to make it viable.

Paul: While I've got you, Kerstin, the next question that's coming here is, what are your main revenue streams?

Kirsten: Our core technology and bacteria because they are almost like a cartridge system in a printer system. You have to replace the bacteria now and then. That is our revenue because we have to sell this bacteria, it's our IP. The other revenue, it depends on our model. What we want to do is a leasing model at the beginning so we can try our tech environment and generate revenue. The revenue will be from electricity service.

Later on when our tech is fully developed and fully matured and we bring our product on market and sell it as a product, then it'd be the device, but then also the feedstock that we provide will be 100% efficient if it's being sourced from us because we can make sure that the consistency is optimum for our system. In summary, we have three revenues: one is electricity, one is the product, and one is the sugar or the feedstock that we provide.

Paul: That's for any investors, business people, potential partners listening in here. To me, this is one of the things that's especially compelling. Not only is this tech literally world-leading, but the business model associated with it, of having an ongoing annuity stream associated with it, just makes it absolutely compelling. Team, it's 6:25 and we have exhausted all of the questions with five minutes to go unless there's no more questions to come here. I think we're into now just doing a debrief, but we have one more question. Are you the only company with an on-demand hydrogen production model? I think, Kerstin, this, again, is for you.

Kerstin: I think that's quite clear. Yeah so, the otherhydrogen production is from gas or coal or electrolysis or other bioprocesses similar like ours but not as efficient. The fact that we have a system developed that you add feedstock and it produces hydrogen within a few minutes, that is unique.

Robert: I think apart from the ammonia to hydrogen CSIRO technology, but I'm not sure how on-demand that is, I know it requires some cleanup. I don't know if that can be done or if it's done on the fly. I had a trial recently, so it's possible that they're competing in that area.

Kerstin: The thing with our technology, it's done at normal pressure and normal temperature. I know the ammonia conversion to hydrogen requires super-high pressure. It's not a simple system that you plug into your house on the side, and it just runs in ambient conditions. I think from that point, it's quite unique as well.

Paul: Very good. Very good. I think we've exhausted the questions with about two minutes to go. It's just now for me to wrap up. For those still watching, I can let you know that the presentations and videos will be available. You'll get more information from the superb ON team here, who have done just a magnificent job of pulling together this afternoon's event in very challenging circumstances and made it, in many ways, everybody's compelling as the previous Accelerate Demo Nights that I've attended over the last few years.

Please do reach out to the HydGene team. If you've got any other questions or you'd like to connect, you can find the contact details there in the event booth there. I'm sure the ON team will be able to connect you direct to Louise and the team. The final note from me and from the ON team at large, as well as from the team at HydGene is to thank you all for some fabulous questions. I hope you found it as exciting and compelling as I have and enjoy your evening.

[00:59:08] [END OF AUDIO]