Synergy International Bloggers Block #1
Alive & Blogging
We’re taking on the challenge of creating a weekly Blog about the trials and tribulations of Synergy International’s development of a Green Hydrogen production facility in Portugal. “Only for the sustainable energy connoisseur?” you might have immediately asked yourself.
If so, you would have only been partially correct.
We’re also putting into high relief the numerous business development issues faced by early-stage projects like ours in the byzantine world of capital-intensive project development. IMHO, development capital is the key issue most frequently obfuscated during the sustainable energy debate.
Sustainable Energy development is highly capital intensive. And that creates a big disconnect for most people looking from the outside into the sustainable energy world.
The pursuit of carbon reduction towards NetZero is often seen as today’s evolutionary successor to the Tech/Internet/Social Media revolution. Yet the start-up dynamics for the two industries could not be more different.
The progenitors of the T/I/SM revolution often were Harvard dropouts (OK, sure, geeks!) cranking out proprietary code instead of taking a midterm exam or genius hippies producing prototype hardware in the family garage.
In the Green Hydrogen revolution, the equivalent of the family garage is a big development comprising a hydrogen electrolyser, desalination unit, storage facility, plus millions of litres of sea water, not to mention the land needed to build this eco-friendly power pod.
In our case, our “family” of stakeholders and business partners needs to source about €120 million in order to build a 120megawatt facility.
While this a meaningful amount of power, keep in mind this amount could be largely consumer by a single, large industrial entity in its Sustainable Energy transition.
In fact, these types of corporate “off-take” agreements are very much the gold dust of Sustainable Energy development. The contract means there is a contracted future buyer for Green H2 (Hydrogen for all you non-Periodical Chart people) that will be produced by your facility in the future.
So off-take agreements mean a project is no longer a “build it and they will come” risky prospect from an investment standpoint. It demonstrates revenue on start-up investment because there is a buyer for the product once it’s produced in 1 or even 2 years.
Now we haven’t yet touched upon the magnitude of the European Union in our introduction. Let’s just summarise here to say it’s of the highest level of importance, in whatever form its capital distribution takes. We’ll follow-up this key and evolving issue in our next Blog.
At least we realise that we need answer the basic question: why spend 5 minutes of my time with this blog when I could watch 10 TikTok’s?
The answer is hopefully clear: Go with us not TikTok if you’re interested in the massive upheaval currently underway as millions of people around the world gear up their allocation of resources to expand the production of renewable energy.
We’ll leave this intro with a bit of context interns of the requirement to reach the often-stated NetZero 2050 goals. McKinsey estimates achieving NZ will require the largest reallocation in human history, equivalent of ~8% of annual global GDP, which equals US$ 9 trillion per year.
Puts our start-up needs of €120 million into context.
On that note, we will close with the comforting knowledge that least we’re not jumping into a self-indulgent podcast, although we reserve the right to eventually migrate in that direction.
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