It is not hard for a startup to shift revenue models as the business develops. It is much harder to get a long-established energy sector to realize they are blowing the gold out of the smokestack and they need to change their business model when they already have plenty of gold.
Einstein’s theory of relativity should have had the energy sector more focused on the material than the energy per se. The petroleum and natural gas sectors have done quite well with manufacturing many materials from the crude and natural gas in the ground, but these developed as add-ons to the core business of selling energy in the form of heat and electricity. It is at the point of conversion/ignition that solid oxide fuel cells harvest more energy and with the same process can create useful materials for industry and consumers alike.
Fuel cell is a simple term for a self-contained electrolysis machine. Drop a very specialized arc welder into a super strong safe filled with a solid material or acid and call it a fuel cell. Whatever gets fed into the fuel cell will be atomically separated by heat and pressure and can then be arranged into virtually any other molecule of similar composition or separated into pure elements such as hydrogen.
So, the fuel cell critics like to point out the fact that Fuelcell Energy’s fuel cells produce carbon dioxide as a waste product in the production of hydrogen. However, when their fuel cell feeds its waste gas or any other type of waste gas from heat and electricity production into a separate reconfigured fuel cell running at a higher temperature it can now perform carbon capture and gather pure carbon materials such as graphene and nanotubes.
This makes this second use of the fuel cell technology vastly more profitable. Natural gas is made up of one carbon atom and four hydrogen atoms, but that one carbon atom is three times heavier than the four hydrogen. This gives the carbon in natural gas a three-fold head start when it comes to making a buck.
The profit potential of running fuel cells in series to simultaneously produce carbon materials such as carbon black, graphene and carbon nanotubes is hard to believe when compared to a hydrogen revenue stream at today’s prices. Currently, hydrogen consuming fuel cells make economic sense in the four to five dollar per kilogram range for industrial transportation. A kilogram of hydrogen contains the energy equivalent of a gallon of gasoline.
By comparison, the least valuable carbon nanotubes are currently worth two hundred dollars per kilogram and jump by leaps and bounds to four, five and have even sold for six figures per kilogram. Applying the ratio of carbon produced to hydrogen, that means $600 of carbon revenue for every $5 of hydrogen revenue worst case scenario. Even if the carbon material market dropped by ninety percent that still produces a ten times greater revenue stream than hydrogen.
From an investor’s point of view, it is certainly less risky than a graphene mine in a politically unstable part of the world. The actual large-scale production process of carbon material from smokestacks has really been ignored by an industry focused on producing the smallest atom in the universe. The advancements needed for finalization of the production process are available from the current carbon fiber industry.
Companies such as Zoltek not only produce carbon nanotubes for fiber production, they also recycle the material. Current carbon fiber producers rely heavily upon polyacrylonitrile or PAN as their basic building block for carbon fiber production. High temperature fuel cells can capture carbon dioxide and efficiently synthesize the simple hydrocarbon propylene which is used to produce PAN. Carbon fiber production facilities also consume electricity and heat in the PAN production method of carbon fiber.