Knowing your customer key to Hydrogenics global success

Knowing your customer key to Hydrogenics global success

How do you persuade the world you can solve some of its biggest climate-change problems with the smallest molecule – hydrogen – and do so safely and cost-effectively? The answer is simple: persevere and become the best in your field, says Daryl Wilson, President and CEO of Mississauga-based Hydrogenics.

The company – a global leader in hydrogen fuel cell systems, generators and renewable energy technology, which currently employs about 200 – went through three phases from its inception 20 years ago, says Wilson, “When we started in 1995, there was a hype period, when everyone believed this was the technology that was going to save the world,” he recalls.

The excitement about hydrogen fuel cells brought soaring stock prices, but it didn’t last long.

“As cost and performance realities were sinking in, it became clear that the industry had lots of work to do,” says Wilson, who calls what came next (half-jokingly) the ‘Valley of Death.’

“We had to drive down cost through innovation to be able to offer a real value proposition – and we had to survive that journey,” he says.

In hindsight, Wilson can be light-hearted about this period. Since its lowest point in 2010, Hydrogenics has been on a decidedly upward trajectory, culminating in recent wins in China supporting zero emission transit buses, in Germany with the start of a 34-MWh energy storage facility and the final round of pilot trials in an international competition to treat the contaminated waste water at Fukushima along with partner Kurion.

Hydrogenics’ biggest contract to date is worth 50-million euro and involves integrating hydrogen technology into commuter trains built by Alstom Transport, a firm head-quartered in France.

There is a growing interest in electricity-powered commuter rail transport across the globe, says Wilson. “Today, most commuter trains are diesel-powered and the greenhouse gas emissions associated with those railway corridors are quite significant. Switching to electrified systems means substantial reduction in emissions.”

The conventional way of electrification involves installing overhead electric wire along the full length of the tracks. “This approach, called the catenary system, has been used for decades, but installing it costs between $1 and 5-million per kilometer – it’s an expensive proposition,” says Wilson, adding that with hydrogen technology, this infrastructure is not required.

“We place hydrogen gas fuel on the train – much like we are putting diesel fuel on trains now,” he explains. “The hydrogen gas then runs through a fuel cell power module, which converts it to electrical energy.”

While this application of hydrogen gas has been discussed for more than a decade, the technology has only now matured. “We’re at a point where costs and technical performance allow us to offer a viable alternative,” says Wilson.

After approaching rail car manufacturers around the world, Hydrogenics received a positive answer from Alstom Transport in June 2015. Five cities in Germany have already signed up for the trains, enabling Alstom to commit to purchasing 100 hydrogen fuel cell systems from Hydrogenics.

In Germany, 50 per cent of the railway already runs on electricity, the rest on diesel. The main drivers for engaging Hydrogenics in the push to electrify the remainder include a firm commitment to greenhouse gas reduction, a “strong spirit of innovation and the recognition of the potential of hydrogen as the energy carrier of the future,” says Wilson.

“The electrical system is a wonderful conveyor of green attributes if you’re using clean energy sources but there are limitations on size and capacity,” he adds, noting that major utilities are taking notice of hydrogen’s capacity to store surplus green electrical energy – for use at another time, in another place or for another purpose.

“There is a connection between energy storage for the electrical grid and transport de-carbonization,” says Wilson.

By developing the technology to fully utilize hydrogen’s potential as energy carrier, Hydrogenics is pioneering solutions for both problems.

Hydrogenics President and CEO Daryl Wilson answers five questions about exporting

1) What was your first export sale?
In 1996, two years after starting Hydrogenics, we shipped a fuel cell test station to NASA (National Aeronautics and Space Administration).

 

2) How did that first export opportunity arise?
We created a web page and NASA called us.

 

3) When it comes to exports, what do you know now that you wish you knew then?
We have been exporting throughout our history, and today 99 per cent of what we do is export. It’s important to fully get to know your costumers and their needs.

 

4) How has the trading world changed since you started in business?
In our field, we must serve multiple applications and multiple geographies to fully realize our potential. This complexity means that we must keep our products simple, standardized and tightly control cost. Only then can we “take on the world.”

 

5) What is the #1 thing new SMEs need to know about export and trade?
Start small, pay attention to your customer’s local and unique needs – then build and grow. The only way to fully understand is to spend serious time with the customer in person.

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