Mississauga-based Next Hydrogen has patented updated alkaline electrolyser technology to improve the efficiency of green hydrogen production. (Courtesy Next Hydrogen)

Mississauga-based Next Hydrogen is oversubscribed on its latest round of private equity financing and is now moving forward with its April plan to be listed on the Toronto Stock Exchange.

The financing will allow the company, which has patented an updated cell design architecture for alkaline electrolysers which creates green hydrogen, to increase commercial production and lower its price point.

“This financing better positions us to drive wide-scale adoption of our green hydrogen solutions to decarbonize the very large transportation and industrial sectors,” said Walter Howard, Next Hydrogen’s executive chairman, in the funding announcement. Next Hydrogen has not released details of the funding.

‘Green hydrogen’ is a term used to refer to hydrogen produced using the electrolysis of water where the electricity required to power the process is generated from renewable energy sources. Hydrogen is also produced using electrolysis from electricity produced with fossil fuels which is considered a carbon-intensive process.

EU announces billions for green hydrogen production

The technology has been the talk of the renewable energy industry since the European Union announced plans to invest $430 billion in the technology by 2030.

In Canada, a subsidiary of German conglomerate Thyssenkrupp has been awarded a contract to install an 88-megawatt (MW) water electrolysis plant for Quebec’s public utility Hydro-Québec.

CEO Raveel Afzaal’s belief is that Next Hydrogen’s alkaline cell design – for which the firm has secured 35 patents, with another five pending – will be a game-changer in the industry while targeting industrial and heavy mobility customers, which he considers the two largest markets.

“Our design will enable low-cost hydrogen generation at scale,” Afzaal said. “We wanted to introduce the first purpose-built electrolysis to integrate with renewable energy resources.”

He believes Next Hydrogen is the only pure-play electrolysis company in North America and just the fourth globally, joining the likes of ITM Power in the U.K., Nel Hydrogen of Norway and McPhy Energy in France.

With its scheduled IPO in April, Afzaal said Canadians will have an opportunity to be a part of a company that is like few others in the world.

“We are the only advanced electrolysis company in Canada, and when we get lifted, will be the only one providing investors with exposure to this market in North America,” said Afzaal.

Next Hydrogen founded in 2007

While Next Hydrogen has been in existence since 2007, it has taken time for industry and technology to catch up to the concept.

“Our technology is well-suited for the green hydrogen generation. It took years of hard work,” he said. “We believed that this market will eventually come and it’s finally here.”

Afzaal is a University of Waterloo graduate with a bachelors in economics and mathematics.

He worked as a consultant early in his career before joining Mackie Research Capital in 2010 as an industrial and sustainability equity research analyst.

Following his time at Mackie, he spent nearly five years at Canaccord Genuity in a similar role before joining Next Hydrogen as president and CEO in August. He joined Next because his goals for the future of the planet align firmly with its vision as a company.

“We have only one planet,” Afzaal said. “We can all play a role in decarbonizing this planet and what a worthy goal it is.”

The Canadian hydrogen space is seeing more movement; in 2019, one of Next Hydrogen’s major competitors, Hydrogenics, was purchased by American multinational Cummins. Ballard Power Systems of Burnaby, B.C., has also helped make Canada a leader in the hydrogen space.

He noted hydrogen technology, which has been around for decades, is becoming more attractive but admits that globally there will be a need to invest broadly in many renewable technologies.

“I think there will be multiple solutions in the marketplace and green hydrogen is one of those solutions,” he said.

Green hydrogen’s “hub-and-spoke” model

Unlike most renewable energy sources which require connection to the grid, green hydrogen systems are connected directly to clean power sources, which Afzaal noted is a benefit of this energy source.

“The green hydrogen market is basically a distributed hub-and-spoke model where instead of being connected to the grid, you’re connected directly to the solar or wind farms and you’re producing energy in large quantities,” he said.

With the investments from governments and companies looking to offset their carbon outputs, Afzaal said the main shift over the past 13 years which helps his company is the change in accountability.

“Investors want companies to measure and reduce the carbon footprint, and that’s causing a lot of interest in looking at ways to decarbonize operation(s). That’s where companies like us can really benefit,” he said.

According to Goldman Sachs, green hydrogen could ultimately expand to provide 25 per cent of the world’s energy supply and become a $13-trillion industry by 2050.

With only about 10 comparable players in the global market, Afzaal believes Next Hydrogen is poised to reap both short-term and long-term benefits as the sector develops and expands.

“We’re in an industry and space where there is a limited amount of players and a very large opportunity, both in the near term and then an exceptionally large opportunity in the longer term,” said Afzaal.