Hydrogen Engine Center, Inc.OTC: HYEG

Hydrogen Engine Center Investor Update

Hydrogen Engine Center, Inc. (HEC) has developed an innovative approach to hydrogen production which allows it to produce, store and re-use hydrogen for energy creation. Our systems offer a superior alternative to other Standalone Hybrid Systems (SHS) which combine renewable energy sources with complimentary energy storage/generation for remote off grid communities, medical and commercial end users. Of the 1.1 billion people living without access to electricity, approximately 220 million are located in remote areas where it is impractical and un-economic to provide connections to commercial electric grids. For many of these people and communities, diesel transportation to fuel gensets is impractical and costly. 

There is a growing sub-sector of the SHS market for these types of end users which rely on solar and wind energy coupled with batteries for storage and re-use of electricity when the renewable energy sources are unavailable. Unfortunately, batteries are not only expensive, they are fragile and suffer degradation or failure when subjected to heat or other environmental stressors. Hydrogen storage and electric generation has been a known alternative for some time but conventional approaches to hydrogen generation have been overly expensive and require complex maintenance. Hydrogen Engine Center, Inc. has developed an integrated system which solves several of these issues. The largest problem which HEC’s system solves is compression which allows us to compete effectively on cost while offering substantial benefits relative to batteries and conventional alternatives.

HEC’s system incorporates renewable energy sources which provide energy to the end users when available while also using renewable energy to power its proprietary (patent protected) proton exchange membrane (PEM) electrolyzer. HEC’s PEM produces Hydrogen at 3,000psi which is sufficiently high to allow efficient storage without the need for a separate compressor. Other commercially available PEMs produce hydrogen at or below 600psi which is insufficient for storage and use. The  elimination of a standalone compressor allows HEC to reduce both CAPEX and OPEX by as much as 40-60% while improving safety. When renewable energy is unavailable, HEC’s system utilizes stored hydrogen to run modified internal combustion gensets which can provide power for four days or longer depending on the configuration of the system. By comparison, battery based SHS systems are typically limited to one day’s stored energy due to the high CAPEX required to purchase battery based storage capacity. 

As production volumes increase, HEC estimates that its systems will be able provide reliable electric energy to remote end users over a 20+ year lifespan with Levelized Cost of Energy (LCOE) around $0.40-0.55/kWh with limited onsite maintenance. The combination of competitive energy pricing to the end user, high reliability, long equipment lifespan and clean carbon footprint are several factors which will help drive adoption of our hydrogen power modules.

We have developed two prototype systems for demonstration and testing. Recently, Ludlow Engineering visited our plant to observe and report on the design, performance, safety and efficiency of our system. Their engineering report is available upon demand.