Exclusive: Hydrogen fueling firm Element Two kicks off £30m funding round
Hydrogen refuelling firm Element Two has today kicked off a new funding round as it looks to raise £30m in equity and debt to build up its network of distribution stations.
The company, which is planning to deploy over 800 pumps onto the UK network by 2027, and 2000 by 2030, will use the proceeds to fund the construction of the first part of its portfolio of stations.
It has already secured access to a hundred sites at which it will install its pumps, including bus depots and existing service station forecourts.
Once it has developed the first part of its network, Element Two is then planning to go public through a listing on London’s markets.
Chief executive Tim Harper told City PM that an IPO was likely to follow within the next 11-12 months in order to raise the money to fund the firm’s expansion.
Element Two is one of a number of firms focusing on hydrogen as a new form of fuel as the UK seeks to transition away from fossil fuels.
In recent years, interest in using the gas as a means of powering transport and heating homes has exploded.
According to a recent report in the Times, hydrogen was mentioned 18 times in parliament in 2015, a figure that had grown to 392 in 2020.
And the UK’s energy transmission firm the National Grid is currently working on a test facility where it will trial introducing hydrogen in differing proportions into the existing natural gas energy infrastructure.
Harper, who started out as an engineer at the European Space Agency and has advised groups such as the World Economic Forum, said that the UK was well placed to switch to a hydrogen fuelling system for vehicles.
“The UK is in quite a good position because we do have a good distribution network through the existing gas network. So a lot of the local infrastructure is already there, whereas you don’t have that sort of gas network in the US for example.
“So there is an existing way of distributing hydrogen around the country, which makes it a lot easier in terms of getting into the transport sector, which we think will be the first one to switch over.”
Element Two’s refuelling system is designed so that it can be adapted to different technologies, rather than being wedded to one particular system.
It is already being used in mobile form, as chairman Dirk Van Daele explained: “Our initial use of mobile refuellers allows us to service the private ‘heavy duty transport’ sector straight away.
“This is why we have approached A2 investors now with fuel sales revenues in 2021 even earlier than those generated from our first fixed sites. It enables us to roll out our network faster.”
The firm also recently signed a deal with H2 Green, a subsidiary of Getech which develops regional hydrogen hubs, to accelerate the creation of the UK’s first hydrogen network.
Though some remain skeptical about the prospect of using hydrogen, Harper insists that it has a place in the powering of heavy vehicles like trucks and buses.
And further down the line he said it would be an “obvious” method of decarbonising other heavy industries like shipping and aviation.
But, he warned, the UK was at risk of being left behind by the rest of the world unless it acts fast to develop the sector.
“Someone’s got to step up and do it, otherwise Britain will be left behind. There’s something like 100 stations already in Germany and 137 in Japan but hardly anything in the UK yet.
“So somebody has to be the first mover. There’s a real opportunity for UK companies to be global leaders in hydrogen technologies, rather than sitting on our hands and then importing things from the rest of the world.”