Melrose banks on hydrogen storage in push to go green
One of Britain’s most successful buyout specialists, the industrial conglomerate Melrose Industries, is going green with the creation of a division that will develop new methods of storing hydrogen.
Melrose, best known for buying, streamlining and selling engineering businesses, said it would use its expertise in metallic hydrides to create a new method for storing the gas.
GKN Powder Metallurgy, acquired as part of an £8bn hostile takeover of UK engineer GKN in 2018, has launched a dedicated hydrogen unit that will generate renewable or “green” forms of the gas that will then be stored.
Simon Peckham, Melrose chief executive, said “hydride plants locally make huge commercial and environmental sense”.
The FTSE 100 company, he added, has already invested about $10m into the business and would consider building an assembly plant in the UK to “satisfy increasing demand as it emerges”.
Hydrogen has long been heralded as a revolutionary alternative to fossil fuels, but high costs and numerous challenges, including how to store it, have held back progress to develop new economies centred around it.
Green hydrogen is the sector’s ultimate aim, but it only accounts for about 1 per cent of global hydrogen supply.
The “really big issue” is “making the green hydrogen in the first place”, said David Cebon, professor of mechanical engineering at Cambridge university.
Despite the challenges, targeted support from governments, notably in Europe, is driving a swath of investment into the industry.
The EU’s hydrogen strategy, launched last year, aims to install 6GW of green hydrogen capacity by 2025, rising to at least 40GW by 2030.
Like any gas, hydrogen can be compressed and stored, but its volume is much larger than that of other hydrocarbons.
Compressed hydrogen is, therefore, usually contained in highly pressurised containers that use special steels reinforced with carbon fibre.
Today’s fuel cell cars use compressed hydrogen gas, but vehicle manufacturers remain divided about how big the potential market will be.
GKN is among those that believe metal hydrides are the answer as they are able to store hydrogen at lower pressures in small spaces.
Identified as a potential efficient option for high-density hydrogen storage as long ago as the late 1970s, supporters of metal hydrides say the concept works because hydrogen molecules are chemically bonded within the metal compound structure and remain stable at atmospheric pressure.
GKN says its engineers have developed a new metal alloy powder from hydrides that is compacted into a high-density pellet, allowing the use of smaller tanks operating at lower pressure and temperature.
The company is finalising plans for increasing production of the powder at a site in Romania and is in the process of applying for EU funding to help subsidise the costs.
The initial focus, it says, will be on providing energy storage solutions between 80kWh and 66MWh — ideal for providing emergency power for critical infrastructure such as hospitals as well as off-grid locations.
Longer-term, the company says its system could provide enough energy to supply residential housing and power maritime transport.
The company has four pilot contracts under way, including one with an autonomous community in California, to provide short-term back-up power in the event that wildfires disrupt supply from the local electricity network. A further 11 pilots
are due to start in the coming months.
“Everyone we speak to tells us that solving the transport and storage for hydrogen is the missing piece in the jigsaw,” said Peter Oberparleiter, head of GKN Powder Metallurgy. He expects to see “significant sales” of the company’s storage solution to “begin from 2023”.
Melrose will provide further details of its plans for the division at an investor day this month. If the new venture proves successful, it could be the next division to be sold, according to one analyst who wished to remain anonymous.
The group focuses on buying underperforming manufacturing businesses, restructuring them and selling them on, generating substantial returns for executives and shareholders in the process.
The group last month agreed to sell its US air conditioning unit Nortek Air Management for $3.65bn (£2.6bn).
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