There is arguably more buzz around Australian start-up Hysata right now than any other company in the global hydrogen space.

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This is because the company not only says its novel “capillary-fed” electrolysers will be the most efficient on the market, but that they will also be cheaper to buy and operate than comparable electrolysis systems.

It is little wonder that, despite having not yet commercialised the technology, it already has an order pipeline of almost 40GW.

In an exclusive interview, Hysata chief commercial officer Tom Campey tells Hydrogen Insight how the company says it will achieve its breakthroughs, and why he believes the technology represents a “step change” for the green hydrogen industry.

Q&A with Tom Campey

How does Hysata’s technology work?

Our technology is capillary-fed electrolysis, CFE. And that name basically describes the core innovation which makes our technology so special.

“Capillary fed” relates to the fact that in an electrolyser you have electrodes, and in between the electrodes you have a separator or a membrane, which keeps the gases [ie, hydrogen and oxygen] separate as they’re generated.

Graphic explaining Hysata's groundbreaking technology. Photo: Hysata

Our innovation is that we use that separator as the way to get the electrolyte, which contains the water that you're splitting, into the cell and to the electrodes.

So, a typical alkaline electrolyser, say, will have electrolyte on both sides of the cell, and then as the gases are produced you generate bubbles, and those bubbles form a foam and you have to carry those bubbles away from the cell. The bubbles stick to the electrodes, and it's fundamentally a source of inefficiency and complexity in the system.

By using the separator to deliver the electrolyte to the electrodes, you eliminate bubbles and you vastly simplify the system and radically increase the efficiency of the cell.

So, the benefits that this innovation unlocks are really threefold. One is the efficiency of the system, and at a system level, which includes our stack, our core balance of plant, and our power supply, we'll have a system efficiency of 95% HHV [high-heating value], which is 41.5kWh per kilogram.

Now, that’s about 20% better than incumbent alkaline and PEM electrolysers. And that’s really all because of that efficient cell, which is unlocked through the capillary fed design.

A mocked-up version of the Hysata electrolyser stack. Photo: Hysata

Does the extra efficiency come purely from the elimination of the bubbles?

Well, that’s one part. We also [have] the separator, [which] as we’ve designed it, is essentially a foam — it’s a polymer that looks like a kitchen sponge, essentially, if you look at it under a microscope. And that’s saturated with our electrolyte, and that ends up being very, very conductive while having very good properties as a separator, keeping the gases separate.

So the separator contains the electrolyte?

That’s right.

And what is the electrolyte?

KOH [ie, potassium hydroxide] — the same as [a standard] alkaline [electrolyser]. So, we have the benefits of alkaline in there… but the electrodes are not immersed in a bulk liquid. They’re just in contact with this separator, the sponge filled with the KOH.

The elimination of the bubbles and the high conductivity separator, lead to the low resistance and high efficiency of the cell.

And then you also get efficiency benefits from the balance of plant.

An aerial view of Hysata's manufacturing facility in Port Kembla, near Sydney. Photo: Hysata

Because the cell is so efficient, we’re generating around ten times less heat than in a typical alkaline or PEM. And that just means there’s a much lower cooling load, which simplifies the balance of plant and reduces the energy required to cool the system.

We are still generating some heat in the cell, but it’s very small compared to a typical system.

And because we’re delivering the liquid in a very targeted way through the membrane, we don’t have all this huge amount of liquid circulating in the system.

Compared with a typical alkaline electrolyser, it’s about 20 times less liquid in our system per megawatt. And that just means smaller pumps, smaller tanks, less energy for driving those pumps.

So, presumably, that means the footprint is smaller as well?

The footprint is indeed smaller. In terms of the total system, we’ll be a little bit smaller than a PEM [electrolyser] and about half the size of an alkaline [electrolyser].

Really our value proposition is a lower levelised cost of hydrogen [LCOH]. And that comes down to main things. One is the efficiency. Making hydrogen takes a lot of electricity. And the less electricity you use, the lower that cost.

So, a 20% improvement in efficiency directly relates to a 20% reduction in the amount of renewable energy you need. So that’s the biggest factor [in reducing LCOH].

Hysata CEO Paul Barrett, left, in the company's lab in Port Kembla. Photo: Hysata

But the other factor is the capex [capital expenditure], which is the other key driver of the levelized cost.

And the capex of our system is low because of the simplified system, the simple cell design results in a low-cost stack, but it also results in simplification of the balance of plant.

And that means that the cost in the rest of the system that a customer would need to pay is lower. And that includes the installed cost of the electrolyser because it’s just such a simple system, it’s easy to install, so we can save [on] labour [costs] in the project construction.

So how much money can be saved just on the balance of plant side, compared to a similar sized alkaline or PEM system?

I think it’s probably easiest to look at on a levelised cost basis, and there you’re in the double-digits levelised-cost savings on a whole-system basis. So that’s pretty significant.

Okay, so double digits could mean anything from ten to 99, what sort of range are you actually talking about?

It’s going to depend a lot on the specific project, on the customer, but fundamentally it’s a cost saving that any hard-nosed project developer cannot pass up.

But is it closer to ten or 99?

It’s not 99.

I didn’t think it would be, but would you say over 10%?

Ten or above.

What stage of commercialisation are you at?

We have a 5MW commercial demonstration project that’s been announced with Stanwell.

Stanwell is a Queensland Government-owned power company that’s developing a large hydrogen export project, CQ-H2. And we have a project with them that will go in the field in 2025 at their innovation centre called FEITH [Future Energy and Innovation Training Hub].

So, that’s really the start of our large-scale systems in the field. That’s a 5MW electrolyser system.

Is that 5MW made up of a single stack or is it smaller units?

It’s a 5MW stack.

Ok, so in terms of the testing process, am I right in thinking that you’ve proven the technology in the lab and that you now need to prove it in the field? Is that correct?


But as far as you’re concerned, the system works and it’s reliable.

That’s right. We’ve demonstrated all the core parts of the system in our facility. And now it's just about scaling up and taking it to the market.

Is there any way that what you’ve designed won’t be able to be scaled up?

There’s no more science. The science has been done. Now it’s just engineering and scale-up.

Ok, so what’s your plan in terms of going from the test phase to large-scale manufacturing?

The manufacturing is really the third benefit of our system. So I touched on the efficiency and the installed cost. Manufacturing and ability to scale is really the third benefit.

So our system is a very elegant design, which is simple to manufacture. And it also uses earth-abundant materials. And therefore, our scale-up will be subject to less constraints than what other players have been seeing.

So there’s no iridium or rare metals in your system?


What’s it made of? What materials do you use?

The main materials are like in a standard alkaline [electrolyser]. We have nickel, and we actually use a polymer as our cell frame, which means it’s a low-cost, easy-to-manufacture system.

Does that mean it needs fossil fuel?

Well, we’re talking with some customers that are looking at making polymers out of green hydrogen. So that will be our ultimate goal, to have a completely circular zero-emission supply chain. There’s a journey to get there, of course.

When do you think the first gigawatt of electrolysers will be coming off your production lines?

We’ll be reaching gigascale shortly after our demonstration, so from around 2026.

Okay, so there’s a lot of companies planning to mass produce alkaline or PEM electrolysers with 5GW of factories or more that are going to have economies of scale that bring down costs. Do you still reckon your electrolyser will be cheaper on a capex level?

On an installed capex level. Because it’s not just about the capex, the electrolyser. A real driver of the installed capex at the moment is the EPC [engineering, procurement and construction] cost, and in particular the cost to install and construct an electrolyser facility, including that balance of plant. So having a system that’s modular, easy to install, and that removes complexity in the balance of plant means that the total installed costs will be much less.

What about opex, operating costs?

Well, the simpler the system, the less opex there is typically. There are less pieces of kit to maintain and replace.

So in terms of scaling up, do you have plans for, say, a specific size of production line to start off with, before adding more, or you’re going to buy a site to build a factory. What are your plans exactly?

Just two months ago, we moved into our new facility in Port Kembla, just south of Sydney, and that will be the location of our first manufacturing line.

And then we’ll demonstrate the manufacturing at commercial scale there, and then scale up globally from there.

When you say globally, what do you mean exactly?

Our customers are located across the world, and in time we expect to have manufacturing based on where our customers are.

That sounds like you’ve already got customers lined up.

We do. We already have 9.4GW of signed conditional orders and LOIs [letters of intent]. And we have a pipeline of a further 30-plus gigawatts’ worth of demand from customers that we're talking to.

That’s a lot.

Well, there’s a lot of demand in the industry, and there’s a lot of people who want the best technology.

I’m wondering if companies will delay final investment decisions in green hydrogen projects because they’d like to wait to get hold of cheaper and more efficient Hysata electrolysers.

I hope that’s not the case. What we are often seeing in the industry is that people with very large pipelines of projects will typically have multiple projects and they'll have projects that go in phases.

So while they might deploy one of the incumbent technologies in an early phase, if it’s earlier than our timeline, then they’re looking to us for subsequent phases. So I don’t see people being held up, as such, given the fact that there’s just such a pipeline of projects out there.

Can you say which companies are placing orders for Hysata electrolysers?

None that I can [disclose].

Could you perhaps describe the type of companies that have signed deals, rather than naming specific companies?

I can tell you about the customers that we’re targeting. We’re targeting customers in the hard-to-abate sectors, and customers that are project developers that are going to produce hydrogen or derivatives like ammonia for those sectors. So it’ steel production, it’s ammonia and methanol for shipping, it’s the oil & gas sector [where hydrogen is used for remove sulphur from crude oil and to produce certain oil-based products]. It's all those large-scale applications that are hard to decarbonise without hydrogen.

And when you say they’re conditional deals, what would the conditions be?

Based on demonstration of manufacturing, scale up and operation of the system at commercial scale.

Scaling up and building factories around the world will take a lot of money. How will that be funded?

That’s probably not details that I can go into.

Could you say if it would be debt funding or share issues…?

Not something that we’ll be announcing yet. But, there is a lot of investor interest in our company. We had a Series A round last year, which was A$42.5 million, and that was oversubscribed and we still see significant investor interest.

Who are your shareholders?

Virescent Ventures, which is the venture arm of the Clean Energy Finance Corporation, which is Australia’s green bank. So they came in at our seed round and they led our Series A.

There’s also IP Group Australia and Kiko Ventures, which are both specialising in deep tech VC [venture capital]. We have Vestas Ventures, so Vestas is the world’s largest wind turbine company. Vestas, they’ve invested in us, Hostplus, one of the Australian pension funds.

So can you foresee any challenges or potential difficulties getting to large-scale commercialisation?


Presumably, you think this is a good business to be involved in…

It’s an incredibly exciting business. It’s pretty rare, I think, in any sector that you get a real step-change technology coming along.

Typically, what you see in most technologies is incremental improvements, where people chip away at a technology and steadily improve it over time. It’s what we’ve seen in the solar industry, it’s what we've seen in the wind industry, but it’s rare that you get a real leap. And it is indeed a leap.

We’re already operating at the efficiency that Irena, the International Renewable Energy Agency, had as its 2050 target. So to be already here in the early 2020s at that level gives you an indication of how much of a leap this is.