2021 Accelerators of innovation: an opportunity for the Ruhr region - Bundesverband Deutscher Startups

 
CONTINUE READING
2021

H y d r o g e n
S t a r t u p s
       Accelerators of innovation:
 an opportunity for the Ruhr region
Katherina Reiche

F O R E W O R D
                                                                                                                   Chairwoman of the Board of Directors at Westenergie
                                                                                                                   AG and Chairwoman of the National Hydrogen Council

What do California's Silicon Valley and the      city cannot be used. Hydrogen will pave the     ting natural gas grids for H2 transport will      dustry and politics work together towards
Pearl River Delta in South East Asia have        way for a decarbonised economy, emission-       eventually bring hydrogen into people's           one goal, great things are possible. The Ruhr
in common? They have both been a driving         free mobility and climate-neutral heat ge-      homes - a cost-effective way to decarbo-          region could become a "Hydrogen Valley" in
force behind high-tech revolutions and           neration. This energy carrier could trigger     nised heat. This is also being tested in the      the heart of Germany and Europe. And who
ground-breaking technologies. They have          a new German economic miracle. And the          Ruhr region - in Holzwickede near Dortmund.       knows? Perhaps Bottrop will then become the
built economic ecosystems that promote           Ruhr region has what it takes to be the                                                           "Palo Alto" of the fuel cell and Gelsenkirchen
innovation, enable added value at record         starting point and centre of this develop-      The startup scene in the Ruhr region has a        the "Shenzhen" of the hydrogen economy!
levels and create many new jobs.                 ment.                                           key role to play and can give our region the
                                                                                                 decisive edge. The region is one of Germa-
Germany, on the other hand, missed out on        As Germany's largest metropolitan area, the     ny’s leading clusters in the field of H2 start-
the economisation of the internet and then       Ruhr region is the perfect place for urban      ups and can generate the speed needed in          Katherina Reiche
the launch of the smartphone, even though        H2 projects in which millions of people can     the global race to become the first decar-
important spadework for these technolo-          participate. Research institutes in Mülheim     bonised economy. Young companies and
gies was done here. We can’t allow this to       and Oberhausen are pushing technologies         universities with a strong practical orienta-
happen again with the next breakthrough          such as the fuel cell. The chemical industry    tion in Bochum and Dortmund can develop
innovation. And that is hydrogen.                in Essen has been using hydrogen for de-        H2 solutions with global application potential.
                                                 cades. Duisburg is planning to replace co-      This H2 report paints an impressive picture.
H2 is the prerequisite for achieving the Paris   king coal with hydrogen for the production      It shows us that if all the forces from re-
climate goals. It is needed wherever electri-    of "green steel". And the conversion of exis-   search, the new economy, traditional in-

                                                                                                                                                                                               2
K E Y                          R E S U L T S

1     Ecological transformation: Hydro-
      gen will play a fundamental role in the
energy transition in the coming decades -
                                                 2     Innovation through cooperation:
                                                       The Ruhr region has all key prereq-
                                                 uisites needed for the development of a
                                                                                                 3      Increase dynamics: Germany cur-
                                                                                                        rently lacks the necessary speed to
                                                                                                 establish an internationally leading H2 econ-
the 24-fold increase in annually installed       hydrogen ecosystem - strong H2 research,        omy. Whereas in 2014, 16 % of all new glo-
electrolysis capacities between 2015 and         an enormous density of relevant players, a      bal electrolysis patents were registered in
2019 already points to the enormous market       multitude of possible applications in estab-    Europe, by 2019 the figure had fallen to 9%,
volume of the sector.                            lished industries and strategic initiatives     while the USA and above all China have sig-
                                                 that bundle existing projects.                  nificantly increased their share.

4      The Ruhr region is a H2 startup clus-
       ter: Startups are a central vehicle for
accelerating the development of the hydro-
                                                 5      Hardware meets software: Startups
                                                        bring digital innovations into the hy-
                                                 drogen economy that increase technologi-
gen economy. An analysis of the distribution     cal efficiency and create decisive competi-
of H2 startups in Germany shows that North       tive advantages in the medium to long term.
Rhine-Westphalia and Bavaria are home to         The establishment of the first European H2
over half of them - with the Ruhr region and     startup hub in the Ruhr region can therefore
the Munich metropolitan area clearly stan-       be seen as another key asset for the area.
ding out with 18 % each.

                                                                                                                                            3
1 .               B A C K G R O U N D

1.1. Starting point and objectives                Hydrogen is a promising option in this           scene in the region, which speaks for the
                                                  transformation process. In the fields of         dynamism and innovative strength at the
The fight against global climate change and       industrial production and in the heating         interface between research and industry.
the requisite reduction of greenhouse gas         and mobility sectors, it could prove to be a     The aim of this report is to highlight this
emissions demand an enormous economic             genuine low CO2, or even, in its green var-      strength and to demonstrate what is need-
and social transformation. This is not a new      iant, a CO2-free alternative to other energy     ed in order to take the H2 cluster in the Ruhr
insight, but at the moment legally binding        sources. When hydrogen is used, for exam-        region to the next level.
and coordinated political initiatives in Europe   ple in fuel cells, no carbon dioxide is pro-
are gaining significantly in momentum - first     duced - only heat and water together with
and foremost the European Green Deal which        electricity. This means that (green) hydro-
aims to make Europe climate neutral by 2050.      gen can play a key role in reducing green-
This show of political strength opens up a        house gas emissions in Germany without
window of opportunity where green innova-         restraining industrial production.
tions in all sectors of the economy are being
promoted through new legal frameworks and         As an industrial centre in the heart of
funding. In contrast to the digital transfor-     Europe, the Ruhr region has a chance of
mation of the last few decades, it is primarily   becoming one of the most important inno-
industrial regions that are facing great chal-    vation clusters in the field of (green) hydro-
lenges, but also seeing new opportunities.        gen. There is a very lively hydrogen startup

                                                                                                                                                    4
Figure 1: H2 strategies in the 56 strongest                       Source: World Energy Council Germany
                                                                                                            economies worldwide                                               2021

1.2. The political transformation                  Since the consequences of energy policy               2017                2018                      2019                2020
                                                   and of technological developments are not
The economic opportunities offered by              entirely foreseeable, there are risks in rely-                    Japan December 2017
hydrogen are also becoming increasingly            ing on hydrogen. But it is at least as risky to                                France1 June 2018
important in public perception, although           wait and see. The mobility industry and the                                                    South Korea January 2019
there is a high level of polarisation. Without     Tesla automotive group are the most pro-                                                                          Australia November 2019
going into the debate in detail, the key facts     minent examples of how sectors that have                                                                                 Netherlands April 2020
to note are: Green hydrogen, which is the          grown over decades can be disrupted, and                                                                                  Norway May 2020
focus of developments in the long-term, is         even established players are struggling with                                                                                Germany June 2020
not an existing energy source, but an energy       innovation gaps. Against this background,                                                                                      EU July 2020
carrier. As such, it must always be produced       it is not surprising that 13 of the 56 strong-                                                                                 Spain July 2020
by using electricity. If it is to play a central   est economies in the world have adopted                                                                                        Portugal July 2020
role in the energy transition, there must be       H2 strategies in recent years. Another 13                In preparation                                                           France2 September 2020
a stronger expansion in renewable energies         countries are preparing strategies and in                Bulgaria                  Morocco               Poland                    Russia3 October 2020
worldwide. Looking at the European Green           28 initial discussions are at least underway             China                     New Zealand           Sweden                      Finland November 2020
Deal, this is precisely the political goal for     (World Energy Council Germany 2021). Ulti-               United Kingdom            Oman                  Slovakia                    Chile November 2020
the coming decades and it is supported by          mately, such political activities are instru-            Italy                     Austria                                            Canada December 2020
a broad political majority. This is why hydro-     mental in creating new framework condi-                  Colombia                  Paraguay
gen is gaining relevance.                          tions and establishing facts in a still rather
                                                   uncertain market.                                 1) H2 Development Plan 2) H2 Action Plan 3) Green H2 Strategy

                                                                                                                                                                                                                5
Figure 2 : Electrolysis capacity (in megawatts)              Source: Own chart based on Internatio-
      becoming operational annually 2015-2019, by                  nal Energy Agency 2020
      region

                                                                                     143                    Government investments, subsidies and           tions for this future technology. The region
                                                                                                            legally binding measures to regulate CO2        and the German economy as a whole can
                                                                                                            are the most important political framework      benefit in the long term by making domestic
                                                                                                            conditions for the development of a global      industries fit for the future on the one hand
                                                                                                            hydrogen economy. The growth of the sec-        and by exporting new machines and techno-
                                                                                                            tor can be roughly estimated by looking at      logy on the other.
                                                                                                            the rapid increase in the production of hy-
                                             x                                                              drogen (Figure 2 ). While Europe is currently
                                         2 4
                                                                                                            still leading the way, the USA and China in
                                                                                           55               particular are clearly catching up. These
                                                                                 46
                                                                                                            changes create opportunities in particular
                                                                                                            for strongly industrialised countries and re-
                                                                                                            gions that have the scientific know-how as
                                                         25                 21                              well as the necessary infrastructure along-
                                    14                        16                                            side established companies in the relevant
                     10                  9                             10
6      4                  6                               4
                                                                                                            sectors such as the energy industry and
                                2                    3
                 1                                                                                          steel production. In contrast to the digital
                                                                                                            economy, a local ecosystem is a fundamen-
    2015		        2016              2017			              2018			              2019                          tal prerequisite for the hydrogen economy.
                                                                                                            This is precisely what makes the Ruhr region
     Japan           North America               China        Europe        Global                          one of the most promising European loca-

                                                                                                                                                                                                       6
"The development of a hydrogen econo-
my holds huge opportunities for North
Rhine-Westphalia in terms of ecology
and economy: if used systematically,
hydrogen can enable us to save 25% of
our current CO2 emissions in the future.     1.3. Importance of the ecosystem                 In addition, governments must offer subsidy       chain. Governments are pushing these de-
This could create up to 130,000 additio-                                                      programmes and incentive systems to boost         velopments, but we also need players with
nal jobs. Thanks to our central location     The basic prerequisite for the development       innovation in the hydrogen economy. At the        enough courage to get the innovations on
in Europe and our industrial strength,       of a hydrogen economy is the existence of        moment the costs of producing clean hy-           the road. Startups play a decisive role here
we have everything it takes to become        an ecosystem that covers the entire value        drogen are still relatively high and the market   as they are dynamic and willing to take risks
the top hydrogen location in Europe.         chain, starting with the generation and pro-     volume is rather small - a constellation that     (Seitz et al. 2020). They are able to give the
Our Hydrogen Roadmap North Rhine-            vision of (renewable) energy for the produc-     should be bridged by political initiatives and    hydrogen economy the necessary push and
Westphalia shows the way - and is an         tion of the gas in large electrolysis plants,    financial incentives. The goals of these pro-     investment figures already indicate how im-
incentive for companies, startups and        through storage and transport and finally its    grammes at national and multilateral level        portant they are becoming in the H2 sector
research institutes to go full steam ahead   use, for example in fuel cells in the mobility   are a close exchange between industry and         (Figure 3).
with innovative solutions in the field of    sector or as an energy carrier in steel pro-     science, feasibility studies or launching pilot
hydrogen."                                   duction. Research institutes and industry        projects in towns and cities - such as H2 bus-
                                             must cooperate if we are to succeed in buil-     es in public transport, for example.
– Prof. Dr Andreas Pinkwart, Minister        ding up a well-functioning and sustainably
for Economic Affairs, Innovation, Di-        profitable ecosystem. What matters now is        When it comes to hydrogen, the goal must
gitalisation and Energy of the State of      combining scientific innovations with prac-      be to put the existing technical innovations
North Rhine-Westphalia                       tical experience from industry, creating syn-    into practice as quickly as possible. The pre-
                                             ergies and jointly leveraging the economic       requisite for this, as emphasised above, is
                                             potential of hydrogen (Hebling et al. 2019).     an ecosystem that covers the entire value

                                                                                                                                                                                             7
Figure 3: Investments in young hydrogen                         Source: Own evaluation based on   "The potential of H2 for the decarboni-
     companies (founded since 2000) in Europe                        data from Crunchbase              sation of large industrial sectors is fi-
     and the USA in million US dollars4                                                                nally being recognised. Since the real
                                                                                                       potential of H2 can only be unleashed
                                                           + $ 250 MM funding
                                                                                                       on a large industrial scale, it is important
                                                               round Nikola
                                                                                                       that investors along the entire value
                                        + $ 210 MM funding
                                           round Nikola                                                chain simultaneously focus on scaling:
                                                                                                       We need investments in new techno-
                                                                                                       logies in order to optimise and increa-
                                                                                                       se efficiency and also in the expansion
                                                                                    72.6
                                                                                           69.1        of production capacities and in infra-
                                                                                                       structure. Industrial centres such as
                                                                                                       the Ruhr can and must set the right sig-
                                                                                                       nals, and public authorities, industry
                                                                                                       heavyweights, private investors as well
                                                                        38.7                           as SMEs and startups must all play an
                                                                                                       equally active role. A huge future mar-
                                                                                                       ket is emerging!"

                                              19.6
             15.8                                                                                      – Robert Gallenberger, Partner at the

7.2 6.2                                                                                                Industrial Technologies Fund of btov
                            7.0                      5.5          5.6
                    1.4           1.5                                                                  Partners

 2015		       2016           2017               2018			            2019                2020

    Europe            USA         4) No IPO financing was taken into account. This relates to
                                  capital raised by ITM Power (UK), SunHydrogen (USA) and
                                  Nikola (USA).

                                                                                                                                                      8
2 .               T H E                           R U H R
                  as a hydrogen region

2.1. Basics and fields of application             The existing gas pipeline network plays a         fields of application are in part struggling
                                                  central role in hydrogen distribution and         with efficiency problems, one particularly
The hydrogen economy can be roughly di-           this gives the Ruhr region a huge advan-          promising area of use is in industry. This
vided into three areas: production, storage       tage: Air Liquide already operates a 240-         is precisely where the Ruhr region has its
and distribution as well as usage of the          kilometre H2 pipeline in the Ruhr and neigh-      strengths. It is home to a diversity and den-
energy carrier. Up to now, hydrogen has           bouring regions – the longest in Europe           sity of industries that benefit from climate-
mainly been produced from gases such as           – and supplies large industrial consumers.        friendly hydrogen - from steel production to
methane or natural gas. Another possibili-        In addition, the Essen-based gas network          the chemical industry and refineries (Inter-
ty is the production through electrolysis of      operator OGE is planning to convert existing      national Energy Agency 2019). The enor-
water – a process that, in view of the long-      gas pipelines to create the first publicly ac-    mous potential within the region is
term goal of CO2 neutrality, is likely to be of   cessible hydrogen grid.                           illustrated by the example of Thyssen-
the greatest importance in the future. The                                                          krupp's Duisburg steelwork, which alone
term green hydrogen is used if the electri-       The basic technology for the usage of hy-         is responsible for 2.5% of Germany's CO2
city needed for production comes entirely         drogen is the fuel cell which can be used in      emissions and which is aiming for CO2 neu-
from renewable energy sources. Electroly-         various applications: for example in mobi-        trality by 2050 (Handelsblatt, 2019).
sis is therefore a key technology in the hy-      lity and logistics, i.e. in cars and trucks, in
drogen economy.                                   trains and even in aviation. The use of fuel
                                                  cell systems for electricity and heat is also
                                                  well developed. However, whereas these

                                                                                                                                                    9
Figure 4: Sketch of the hydrogen economy:                                                                           "Evonik is committed to the development
"From wind turbine to electric motor"                                                                               of the hydrogen economy: We are invol-
                                                                                                                    ved in various stages of the value chain
                                                                                                                    in the hydrogen economy. We already
                                                                                                                    transport and produce hydrogen for

Production						                                     Distribution 		   Usage							                                 our customers and our processes, we
					          							                               and storage                                                    are researching new solutions to pro-
                                                                       Fuel cell applications                       duce speciality chemical products with
                                                                                                                    lower emissions and we want to close
                                                                                                                    the gaps in the hydrogen economy."

                                                                                                                    – Dr Harald Schwager, Deputy Chair-
Electricity from renewable            Electrolysis   Gas grid          Mobility
energies                                                                                                            man of the Executive Board Evonik

Green hydrogen                                       Transport         Electricity and heat

Grey, blue and
turquoise hydrogen                    Hydrogen

                                                     Storage           Off-grid and other applications

                                                                       Industrial and other material applications

Use of fossil natural gas             Reforming/     Gas stations
and other gases                       Pyrolysis

                                                                                                                                                           10
Figure 5: Number of annually registered                     Source: Own analysis based on data
                                                  patents in the field of electrolysis between                from the Fuel Cells and Hydrogen
                                                  2014 and 2019                                               Observatory

                                                                                                                                       2310
                                                                                                                        2156
2.2. Research meets industry                                                                                                                       With its unique characteristics, industrial
                                                                                                                                                   history and experience, the Ruhr region
Research work focussing on practical appli-                                                            1701                             56         has the necessary potential and the op-
cations is a decisive factor in the internatio-                                                                                        199         portunity to develop into one of the central
                                                                                                                         53
nal competition for innovation. A look at the                                                                           180
                                                                                                                                                   European hydrogen clusters. The region is
development of relevant patents indicates                                             1316                                                         home to several universities and has large
                                                                                                                                       481
where Germany stands internationally in                              1078                              33                                          research capacities in the hydrogen sector
                                                                                                                        391
the field of hydrogen. Overall, the number of                                                          168                                         - for example at the universities of Bochum,
patents filed annually in the field of electro-                                        47                                                          Dortmund and Duisburg-Essen, as well
                                                    754                                                340
lysis - which can be seen as an indicator of                                          140                                                          as the Westphalian University of Applied
                                                                      48
the expected market ramp-up - roughly tri-                                                                                                         Sciences. In addition, there are a number
                                                                      134             338                               913            981
pled worldwide between 2014 and 2019. There          38                                                                                            of non-university research institutions with
was a particularly sharp increase in China.          117              303                              625                                         correspondent specialisations, the most
Starting from a relatively low level, China         239                               358                                                          important being the Fraunhofer UMSICHT
has now clearly overtaken the USA and Eu-                             184                                                                          Institute in Oberhausen, the Max Planck In-
                                                     75
rope, with the European share of newly filed                                                                                                       stitute for Chemical Energy Conversion in
patents falling from 15.5 % in 2014 to 8.6 %       2014		             2015            2016             2017		          2018           2019         Mühlheim, the Hydrogen and Fuel Cell Cen-
in 2019. These figures are a clear indication                                                                                                      ter (ZBT) in Duisburg and the “Gas- und Wär-
of how important it is to continue to streng-              Europe (incl. Germany)            Germany          USA        China        Global       me-Institut” in Essen.
then existing research clusters, particularly
in the Ruhr region, and to ensure that theory                                                                       Increase between 2014
                                                     +70%          +47%       +101%      +1208%        +206%
and practice are combined.                                                                                          and 2019

                                                                                                                                                                                             11
“The role of hydrogen as an energy
                                                                                                 carrier is gaining real momentum –
                                                                                                 not just in research but also in indus-
                                                                                                 trial testing. This is crucial since re-
                                                                                                 search has to go hand in hand with the
However, apart from research and individu-        project at the interface between industry      technical development of innovations.
al practice-related projects, the emergence       and research, connecting companies along       As a storable and CO2-free energy car-
and development of a hydrogen ecosystem           the entire value chain to create a nation-     rier, hydrogen can be used in diverse
is also dependent on coordinated efforts by       wide hydrogen infrastructure. A hydrogen       fields, from industrial manufacturing
established players who can create the            ecosystem is thus being established which      (steel, chemistry) to transportation
necessary infrastructure and a broad de-          will extend from the heart of the region       and heat supply. Demand will be par-
mand base through major investment pro-           throughout North Rhine-Westphalia and          ticularly high in industry-heavy areas
jects. And the Ruhr region is well positioned     parts of the Netherlands and Belgium and       such as the Ruhr region. The biggest
in this respect: in addition to the initiatives   that benefits above all from the chemical,     obstacle: the lack of renewable energy
of locally rooted companies such as E.ON,         petrochemical and steel industries (Agora      in Germany. Political action must be
Westenergie, Thyssenkrupp, RWE and EVO-           Energiewende and AFRY Management Con-          taken!”
NIK, specialized firms such as Air Liquide        sulting 2021). This H2 cluster will not only
and Linde are active in the region. Grid ope-     help to secure endangered jobs in the regi-    – Prof. Dr Angelika Heinzel, Managing
rators OGE and Amprion are planning to ex-        ons, but also generate many new employ-        Director of the Hydrogen and Fuel Cell
pand production capacities and distribution       ment opportunities (Ludwig Bölkow Sys-         Center (ZBT)
grids - both in and outside the region.           temtechnik 2019).

The strength of the Ruhr region lies above
all in combining industrial power with scien-
tific expertise in cooperation projects (IW
Consult 2020). In addition, the GET H2 initia-
tive in the Ruhr region is a genuine flagship

                                                                                                                                            12
2.3. Projects and new networks                  this has led to greater momentum on many
                                                levels. The European Clean Hydrogen Alli-
Building an ecosystem in a new and capital-     ance, launched in 2020 as an initiative of the
intensive field such as hydrogen is a real      EU Commission, aims to bring together all
challenge. This is why traditional support      stakeholders involved - first and foremost
programmes based on existing structures         companies - and to promote investment as
quickly reach their limits. The lack of clear   the overriding goal (European Commission
market opportunities restricts financing        2020). In Germany, the mission of the Na-
options and the differing interests of rele-    tional Hydrogen Council, also launched last
vant players can hinder dialogue. However,      year, is to promote the implementation of
cooperation is needed along the entire value    the National Hydrogen Strategy. The GET H2
chain, linking all actors with their various    initiative, mentioned above, has set itself
competencies and goals: producers of re-        the goal of developing a hydrogen market as
newable energies, innovators in the field of    well as the related infrastructures and value
electrolysis, corporations that are driving     chains in Germany and Europe.
the expansion of the infrastructure both fi-
nancially and technologically as well as con-   There is a need for cooperation in the H2
sumers, to name but a few.                      sector at all levels: the EnergyAgency.NRW
                                                plays an important role in North Rhine-West-
Industry and policymakers have all recog-       phalia. One of its networks, the Fuel Cell,
nised the need for new joint ventures and       Hydrogen and E-Mobility Network NRW,

                                                                                                 13
"With our established industry, lead-
                                                                                                ing research institutes and strong in-
                                                                                                frastructure, we in the Ruhr region
                                                                                                have what it takes to get the hydrogen
                                                                                                market off to a good start. Innovative
which was founded back in 2000, has de-         Projects such as the conversion of the          startups are also bringing the necessa-
veloped into a hub that facilitates access      Ruhrbahn fleet from diesel to fuel cell bus-    ry dynamism into the region. To be suc-
to funding programmes and initiates nu-         es from 2024 to 2033 make the transition        cessful in international competition, we
merous projects. In addition, other regio-      to the hydrogen economy particularly tan-       need to combine these strengths and
nal associations have been formed in the        gible. The RH2INE initiative endorsed by        work more closely together - because
Ruhr region. The h2-netzwerk-ruhr e. V. was     the North Rhine-Westphalian Ministry of         hydrogen is teamwork. That is why we
founded as early as 2008, and in recent years   Economic Affairs and the Dutch province of      are happy to cooperate in initiatives
in particular the landscape has become          South Holland should also be mentioned. It      such as Essen’s H2 Advisory Board that
more dynamic: Good examples are new ini-        aims to create a climate-neutral Rhine-Al-      aims to improve networking in the re-
tiatives such as the Hy.Region.Rhein.Ruhr       pine transport corridor. In this context the    gion."
association in Duisburg, the bundling of        Port of Duisburg is already working on the
competencies in the H2 Unit of Essen Eco-       decarbonisation of freight transport and        – Bernd Tönjes, Chairman of the Board
nomic Development Agency or the H2UB            inland shipping. Nevertheless, as important     of Executives RAG-Stiftung
in Essen, which is the first hub to bring to-   as the various projects may be, at their core
gether European startups, companies and         they should all be geared towards building
research. However, it is important to create    a comprehensive H2 ecosystem in the Ruhr
a common basis that bundles the different       region.
networks and aligns them towards a com-
mon goal.

                                                                                                                                        14
3 .               D E V E L O P M E N T
                  of the Ruhr cluster

3.1. H2 startup cluster in the Ruhr region         Startups are extremely important in the de-
                                                   velopment of a hydrogen ecosystem: they
Hydrogen is not only a topic of interest to        put novel ideas into practice and are there-
                                                                                                                           1.8 %
research and industry. With the change in          fore key indicators of the innovative strength                                      3.5 %
                                                                                                                                                    7.0 %
political and social framework conditions,         of a particular region. The distribution of the
startups also see new market opportunities         57 German startups shows that two federal                        0%                                  1.8 %
                                                                                                                                      1.8 %                         7.0 %
here. This is clearly reflected in the growth      states, North Rhine-Westphalia and Bavaria,
in the number of startups in the H2 sector:        account for more than half of German hydro-            Ruhr region                           0%
Until 2010, there were virtually no startups       gen startups - with the Ruhr region and the            17.5 %
in the hydrogen industry in Germany, the few       Munich metropolitan area clearly standing                             29.8 %                          7.0 %
                                                                                                                                               0%
exceptions being largely involved in specia-       out as H2 innovation clusters (Figure 6). The                                   5.3%
lized electrolysis and fuel cell technology        Ruhr alone is home to 18 % of all German hy-                          1.8 %
applications. Since 2015, however, a clear         drogen startups. The Ruhr region's strength
increase in startup dynamics can be ob-            in terms of research, industry and infrastruc-                                              26.3 %
                                                                                                                    0%
served: 41 of the 57 identified hydrogen           ture is therefore also reflected in the startup
                                                                                                                                   7.0 %                         Munich area
startups based in Germany were founded             scene. This confirms the huge potential of
                                                                                                                                                                 17.5 %
during this period. These startups are active      the region and its chances of making a name
in all three fields of application - production,   for itself as an international cluster in the
storage and distribution as well as usage.         field of hydrogen (Hirschfeld et al. 2020).       Figure 6: Regional distribution of hydrogen startups in Germany

                                                                                                                                                                               15
"The dynamism of startups is a crucial
                                                  success factor in the hydrogen market
                                                  ramp-up. However, unlike in the digi-
                                                  tal world, they need partners who, in
                                                  addition to financial resources, also
The locational advantages of the Ruhr re-         contribute skills along the entire value
gion are not only reflected in the number         chain. OGE has set up the H2UB with
of startups but also in the fields of specia-     the aim of creating a centre and bea-
lisation of the H2 startups here. Most of the     con of cooperation where established
newly founded companies in the region fo-         companies, research institutes and
cus on industrial applications and in putting     startups can contribute their strengths
research results into practice – for example      and mutually benefit from each other."
in the field of electrolysis (see highlights in
Figure 7). Publicly funded projects such as       – Ralf Werner, CIO OGE
NEWELY or LIKELY, where a wide variety
of players are involved in the further tech-
nical development of electrolysis, are good
examples of the links between research,
industry and startups. Alongside their re-
search expertise, startups in the Ruhr re-
gion also stand out for their smart solutions
with an industrial focus, producing, among
other things, components for hydrogen fil-
ling stations or cutting torches.

                                                                                             16
Production							Other
                               production methods                                   Usage

Electrolysis systems & suppliers                                         Mobility                               Off-grid and other fuel cell applications

                                              Distribution and storage
                                                                                                                Other uses / industrial applications

                                                                                                H2 Range GmbH

                                                                         Electricity and heat

 Figure 7: Hydrogen startup landscape   * Ruhr area

                                                                                                                                                            17
where state funding is directed specifically
                                                 at startups and at the same time the at-
                                                 tractiveness of the location for investors is
                                                 strengthened.

3.2. More dynamism through startups              "Even when I was studying energy and
                                                 process technology in Serbia, my focus
Startups are pioneers who are always look-       was always on the links between re-
ing for competitive advantages and conse-        search and practical applications - the
quently put scientific innovations into prac-    potential in the field of hydrogen has
tice as quickly as possible. In the H2 sector,   always fascinated me. In 2011, I moved
in particular, research-based startups are       to the Ruhr University Bochum where
enormously important because they are in         I was in charge of important projects
close contact with the scientific world, but     and worked with top international
at the same time have a business mindset         people in the field of hydrogen. But
and never lose sight of the end product.         the connection to industries in the re-
Membrasenz, one of the many startups in          gion is just as important to me: having
the Ruhr, is working precisely at this inter-    customers and partners close by is an
face: Their research into the development        enormous advantage in the field of hy-
of a membrane needed in electrolysis is a        drogen."
vital contribution to one of the key techno-
logies in the hydrogen economy, increa-          – Dr Jelena Stojadinovic, Founder and
sing the region’s chances of becoming an         CEO Membrasenz
international leader in this field. To achieve
this, an H2 ecosystem must be developed

                                                                                            18
i                                                                                                                                              i
The startup Membrasenz is a prime exam-         Although the public image of startups is        industrial sector. Central prerequisites are   The startup PMR Tech, founded in Herne
ple of how innovative research can be           strongly dominated by B2C companies             strategic partnerships with industry and       in 2019, wants to push the industrial trans-
transferred into commercial practice. In        such as Zalando, startups already generate      opportunities for on-site exchange.            formation forward. The product, a hydro-
2011, as part of a research project at the      the majority of their turnover in the B2B                                                      gen-oxygen gas generator based on a water
Ruhr University Bochum, founder Dr Jelena       sector - 69 % to be precise (Kollmann et al.    "Industry is showing great interest in         electrolyser, has successfully completed
Stojadinovic began developing a membrane        2020). This makes them important partners       our product and overall you can sense          initial practical tests and is on its way to go
whose material properties make alkaline         of established companies which benefit          a lot of dynamism in the field of inno-        to market. With the help of the generator,
electrolysis more energy-efficient. She filed   both as customers and through profitable        vative hydrogen solutions. At the same         hydrogen and oxygen can be used in a cut-
a patent application for the promising new      joint ventures with the startups. In the Ruhr   time, the road to market maturity as a         ting torch, for example on steel, as a climate
development and received various grants         region, the greatest potential of new hy-       hardware startup is not easy - especial-       -friendly alternative to the natural gas or
to finance the spin-off including an EXIST      drogen technologies lies in the reduction       ly when it comes to financing. Industry        propane gas currently used. Thanks to the
business startup grant. Membrasenz was          of greenhouse gas emissions in industrial       is therefore very important for compa-         wide range of possible applications, this
founded in 2015. The membrane is now ne-        production processes. This poses particu-       nies like us, not only as a customer, but      also offers smaller companies the opportu-
arly ready to be launched on the market and     lar challenges for small and medium-sized       also as a strategic partner. Our aim is        nity to improve their CO2 balance.
the company is cooperating with several         companies which find it more difficult to       to exchange ideas on the ground, build
partners on setting up production.              implement technological developments            trust and convince people."
                                                alongside their core business. Startups
                                                such as PMR Tech are pushing such inno-         – Phillip Reisenberg, Founder and CEO
                                                vation processes and making a decisive          PMR Tech
                                                contribution to the future viability of the

                                                                                                                                                                                           19
i
Startups are often important vehicles for in-     As a spin-off from the Westphalian Univer-
novation, especially in the hardware sector:      sity of Applied Sciences, ProPuls is contri-
In the H2 sector, funding programmes offer        buting its hydrogen expertise to practical
founders the opportunity to set up business       fields. ProPuls holds patents in both elec-
models focused on research transfer and to        trolysis and fuel cell technology and is wor-
act as a link between science and business.       king on numerous R&D projects - in coope-
As a result, startups with a scientific back-     ration with research institutes, established
ground are emerging, equally active in re-        companies and other hydrogen startups.
search projects and product development,          For example, the company is involved in
bringing together different actors in their       the EU-funded projects Promet H2 and NE-
work and bundling resources. This is exact-       WELY which aim to develop improved and
ly where the H2 startup ProPuls comes in, a       cost-effective electrolysis processes, and,
company that is pushing innovative proces-        together with the Westphalian University of
ses in electrolysis and fuel cell technology in   Applied Sciences and the startup iGas Energy,
collaboration with various partners.              is planning test facilities in the electrolysis
                                                  research project Hydra15.
"The huge interest in our expert event
                                                                                                                                                  "Digital Drives Hydrogen" on March
                                                                                                                                                  4 and in our new Tech Trend Report
                                                                                                                                                  show that, unlike in all the other indus-
                                                                                                                                                  trial sectors, digitalisation is not just
3.3. Digital expertise through startups         can be diverted in real time. The Block-         can be done. Events, network meetings and        a simple transformation issue, but the
                                                cENtive project is developing a blockchain       face-to-face talks are enormously important      crucial factor in setting the course for
The successful development of the hydro-        application that secures and manages the          for startups in order to establish direct       a universal circular hydrogen econo-
gen economy depends to a large extent on        feed-in and use of green hydrogen as well        contacts with industry. At the same time,        my, with North Rhine-Westphalia and
the establishment and expansion of techni-      as its certification in the form of e-certifi-   the mainstream economy should communi-           Germany as future H2 business centres
cal infrastructures and components. At the      cates. And finally, startups such as IOX offer   cate its needs clearly to startups in the form   in Europe and worldwide."
same time, the ecosystem must think digi-       versatile hardware and software solutions        of reverse pitches or startup challenges.
tally from the outset if it is to be competi-   that can be used to push digitalisation and      This would enable startups to see where the      – Dr Klemens Gaida and Peter Hornik,
tive internationally. There is a high demand    optimisation of production processes. The        market opportunities are and give industry       Managing Directors of the Digital In-
for digital solutions in the hydrogen sector    players in the hydrogen economy should           the chance to see for itself the added value     novation Hub Düsseldorf/Rheinland
in order to increase efficiency in the net-     actively exploit these potentials in order to    of cooperation. Strategic partnerships can
working of the infrastructure, for example.     build the most efficient applications possi-     then be formed that will speed up the de-
The advantage of startups is that they often    ble right from the outset.                       velopment of the ecosystem tremendously.
already have the necessary digital expertise
or even digital products that can be used in    In order to connect the old and the new
the H2 sector.                                  economy, the hydrogen ecosystem must
                                                actively promote networking - formats such
The startup Easy Smart Grid, for example,       as the H2 Tech Innovation Night organised
is developing control systems with which        by the H2UB and the digihub Düsseldorf
excess electricity from renewable sources       Rheinland are good examples of how this

                                                                                                                                                                                              21
4 .             W I N D O W                                          O F                     O P P O R T U N I T Y
                – why now?

"Hydrogen has long been seen as an is-     With the German National Hydrogen Strat-
sue solely for the big players: However,   egy and the European Union's Green Deal,                                                             Science:
                                                                                                                                                Research &
the increasing number of small com-        policymakers have expressed their will to
                                                                                                                                                experts
panies being founded in the H2 sector      build up and support the hydrogen economy
highlights the potential of startups in    in the long term, sending a clear signal to
this field. They are essential drivers     business, science and society. These pro-
                                                                                                                                                                                       €
of innovation, add dynamism to the         clamations are linked to stricter regulation
market ramp-up and are an important        of emissions and support for the energy                                                          H2-
                                                                                                   Regulation:                                                                 Support:
                                                                                                                                         ecosystem
bridge between theory and practice. In     transition in the form of subsidies - both are          CO2 price &                                                                 Funding and
                                                                                                   limits                                                                      subsidies
order to exploit these opportunities to    important drivers of the hydrogen ecosys-
the full, we must continue to promote      tem. The development of production capa-
the transfer of research into practice     cities and infrastructures, in particular, is
as well as cooperation between start-      dependent on public funding as this is the
ups and established companies."            only way to reduce the production price sig-
                                                                                                                      Startups:                           Established companies:
                                           nificantly. The Ruhr region, with its industri-
                                                                                                             Intra- & entrepreneurship                  Industry, energy & logistics
– Franziska Teubert, Managing Direc-       al heavyweights, the density of H2 research
tor Startup Association                    and the high level of startup activity in this                 Fundamentals: infrastructure (e.g. pipelines) & access to renewable energies
                                           sector, has all the important prerequisites
                                           needed to build up one of the leading inter-       Figure 8: The hydrogen ecosystem

                                                                                                                                                                                             22
national clusters in the hydrogen economy.
What we have to do now is to exploit the
current momentum in order to strengthen
                                             Four recommendations for the next stages
                                             of development of the hydrogen ecosystem
                                             in the Ruhr region can be derived from this
                                                                                             2      A new entrepreneurial spirit has been
                                                                                                    growing in the field of hydrogen and
                                                                                             lots of new companies are being set up -
                                                                                                                                             example of a successful best practice in the
                                                                                                                                             field of logistics. The important thing here
                                                                                                                                             is to create genuine opportunities for peo-
the ecosystem even further.                  report:                                         with the Ruhr region leading the way. This      ple to talk face-to-face, ultimately enabling
                                                                                             development should be strengthened by           not only networking but also joint projects.

                                             1     In most fields of application the use
                                                   of hydrogen is still at the outset, so
                                             research is a central component in the hy-
                                                                                             promoting more spin-offs from universities
                                                                                             and research institutes. An inter-universi-
                                                                                             ty platform should be set up, located, for      3      This report makes it clear that start-
                                                                                                                                                    ups bring enormous dynamism into
                                             drogen market ramp-up. In order to suc-         example, at the University of Duisburg-Es-      the hydrogen ecosystem. Strategic part-
                                             ceed in international competition, H2 re-       sen and the ZBT. The incubator Cube 5 in        nerships between startups and industry
                                             search in the Ruhr region must be pushed        Bochum, which supports potential founders       offer special opportunities: Startups con-
                                             forward with a stronger focus on applicati-     at the Horst Görtz Institute for IT Security,   tribute innovation and speed, while estab-
                                             ons and established on a broader basis. The     could serve as a model for this. The plat-      lished industry brings experience, customers
                                             aim should be to expand research output in      form must also be open to founders from         and, above all, the necessary capital. For
                                             the region, increase the number of qualified    outside the Ruhr region in order to create a    such joint ventures to flourish, the ecosys-
                                             employees and give more weight to ideas         pull-effect. At the same time, the H2UB in      tem must offer programmes that reduce
                                             and stimuli from practice. To this end, the     Essen should be given special support as a      the cost of cooperation, financially as well
                                             funding of the existing institutions should     national and international magnet for exis-     as in personnel, and thus make projects
                                             be reassessed and potential for expansion       ting startups, so that the Ruhr region can      possible in the first place. The DataHub
                                             identified – especially at the interfaces be-   become a hydrogen hotspot in the start-         Ruhr, run by Gründerallianz Ruhr, is just one
                                             tween practical projects and joint ventures.    up ecosystem. Startport in Duisburg is an       of the companies that undertakes this task

                                                                                                                                                                                      23
in the field of digital innovation. A compa-     This is why it is so important to appeal to
rable programme for industrial applications      the entire H2 economy in the Ruhr region
with a focus on hydrogen would significantly     to work together and to develop lean and
speed up the innovation process between          pragmatic formats. Close cooperation with
startups and industry. By bringing industry      neighbouring regions is also needed, with
into contact with startups, investment ac-       everyone working together to promote hy-
tivities of the established economy in the       drogen. This is the only way to make the re-
Ruhr region and North Rhine-Westphalia           gion the top hydrogen cluster in Germany and
could be strengthened in the medium term         Europe and to raise hydrogen to the next
and thus benefit the innovative capacity of      level as a central component of the energy
the area as a whole.                             transition.

4      Alongside the political will described
       above, all players in the hydrogen eco-
system must work together on this task.
The increasing number of initiatives, net-
works and projects is a positive sign. At
the same time, however, there is a need for
more coordination and a common strategy
so that the strengths of the individual acti-
vities can be bundled and developed jointly.

                                                                                                24
B I B L I O G R A P H Y

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