[On :FreeTrade:] PowerHouse Energy Group (PHE)

LSE: PHE (AIM)

Extracting hydrogen and generating power from unrecyclable plastic and waste tyres.

Got to add this stock to Freetrade

I came here to ask for this one too, especially because they just bought/are buying Waste2Tricity

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Specifically joined the community to vote for this one. MASSIVE potential!

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I wouldn’t touch it with a barge pole. They are trying to use gasification which has been around for decades and only really works for really clean monostream waste inputs.

As normal for gasification they claim that they provide an alternative to landfill or incineration - which is either true if they stick to a small number of clean inputs ie they limit their market or it won’t work if they try to take a wide range of waste.

The real problem is that even if the technology works the question is then why wouldn’t you invest in better plastic recycling rather than gasification? Recycling is higher in the waste hierarchy and Europe is trying to develop a circular economy.

There have been countless similar gasification projects spurred on by the UKs mistaken support for “advanced conversion technologies” ie non-incineration combustion but they’ve all typically failed technically and economically on the grounds that it doesn’t stack up financially for clean mono streams and as soon as you put in lots of waste types you ruin the purity of your syngas.

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looks good, im interested…AFC look okay as well

I did a bit more reading of the PowerHouse website and it becomes more concerning - the hydrogen part is only a small part of the syngas (mostly methane and carbon monoxide) and even worse the hydrogen module is optional rather than a core part of their offering.

Parts of their site talk about focussing on plastics in which case they will be competing with companies using the same tech to produce new plastics (monomers or polymers) rather than energy so they lose out in terms of chemical recycling. Other parts of their site talks about alternatives to landfill etc which implies they want to take more than just plastic waste - see my earlier post, that just doesn’t work.

If you want to look as past failures then look at Scotgen, New Earth Solutions, Energos and many more…

Powerhouse energy (PHE)

ITM Power **Becomes King Of Hydrogen, Is Powerhouse Energy (PHE) Next?

But neither companies are making a profit.

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Itm are using completely different technology to generate hydrogen (electrolyser vs gasification).

So to give a bit more information as to why the difference in technology matters between ITM and Powerhouse.

ITM uses a form of electrolysis of water which gives you a very clean hydrogen output. The issue with electrolysis has always been energy cost as you use electricity but if you can use cheap electricity from excess power generation or from renewables then you have a very attractive proposition. The technology is largely proven.

Powerhouse is using a very different technology which is gasification of waste. If you gasify waste then you get syngas which is hydrogen mixed with carbon monoxide (and potentially other impurities). Either you use the low quality syngas or you do more processing to clean up the syngas to give you hydrogen. Gasification is a long standing technology - coal gasification was used to make gas in the 1800s and liquid fuels by countries under sanctions or without access to oil eg Germany in the 1940s or South Africa under apartheid.

The issue with gasification is that it works ok for “clean” inputs eg coal or single waste streams though there are probably more efficient/cheaper/cleaner ways to generate energy. Where gasification has consistently failed is in trying to go from relatively clean mono-waste streams (or field) to much more heterogeneous mixed and varied wastes (including household waste) - there have been plants for at least 25 years and they’ve all been abandoned for not working (poor efficiency, or terrible emissions) and/or financial issues (ie that it is an expensive way to thermally treat waste. That is before you even consider the cleaning of the syngas to produce hydrogen. So numerous previously failed gasification projects with serious limitations to the waste inputs.

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Thanks, Mike. Really appreciate you elaborating on your previous post.

I also found this video particularly informative:

Googling the phrase “problems with gasification” gave some very interesting results too!

Why then, with so many abandoned plants and similar failed projects, does PHE stand out? Have we missed something? Or is it simply the recent positive sentiment and news stories surrounding hydrogen companies that’s been pushing up the share price in recent weeks?

Again, much appreciated.

I’ve been in PHE for about 5 years. They’ve had highs and lows, including being days away from being delisted a few years back. I averaged down once the technology had been independently verified.

Some of the problems with other gasification projects, e.g. the one at Tees Valley are likely to be in their scale. Which differs to the approach taken by PHE in the smaller, and modular, design.

Regarding the share price movement more recently there’s been some positive announcements the last few months. Along with the wider interest in the sector.

  1. Planning permission was granted for the first site at the Protos Energy park back in March
  2. A partnership with Peel where PHE will receive an annual license of £500k for each DMG unit deployed in the UK by Peel (I think 11 is planned? But you’ll want to confirm that yourselves).
  3. A merger with Waste2Tricity. It’s worth reading up on the arrangement that was in place between these two companies prior to the merger announcement, and what W2T brings.

Of course. Please do your own research :slight_smile: There’s still risks, and the possibility of dilution (besides from the w2t merger) in the future (it is AIM).

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Typically with waste projects the economics just don’t stack up with small plants. Most plants treating municipal/household waste are hundreds of thousands of tonnes split across multiple combustion units (typically around 100kT each). Part of the reason is thermal efficiency but part is also collection systems and societal pressures ie it is seen as more publicly acceptable to have one plant than lots of smaller plants plus the logistics are much easier particularly for a low value business.

Gasification is a more complex technology than traditional mass burn incineration so is already more expensive to start with. So your already struggling financially on the waste treatment part of it. A modern incinerator recovers heat and either uses that heat for other industrial processes (very efficient energy usage) or converts it to electricity (much less efficient). Gasification can do the same by essentially burning the low quality syngas but it would have been much cheaper and achieved the same result to have put the waste in an incinerator ie no competitive advantage there. So generating hydrogen (which seems to be an optional activity to Powerhouse rather than their core activity) may be the saviour if there were legislative pressure to prioritise hydrogen (and reduce incineration). Then you’re back to does it work technically and on small scale clean waste streams it will but not financially without some form of government intervention. As soon as you try to scale it up to meaningful volumes then you get into the problem of a very dirty and mixed input and your plant fails to meet emissions standards.

As I said plenty of people have tried before and failed - I don’t see what Powerhouse are proposing that is different enough to let them succeed. I’d love to be convinced otherwise but what we’re talking about with Powerhouse is not far from alchemy in some respects ie take a dirty input and convert into a clean fuel (without breaking the bank or the technology). You can do parts of the plan but not all!

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Most of the process uses standard, proven technology. The critical element is the rotary
kiln. This makes use of a specialist steel alloy that allows for the high temperature
production. Additionally Powerhouse has developed control technology that is critical to
making the process work.

The equipment will be manufactured and fabricated by standard equipment manufacturers
and the company has a relationship with a UK fabricator who can deliver at least three units
per annum sufficient to establish the initial roll out. Beyond this the company is
investigating production in a number of lower cost geographies. Lead time to establish
production with a new international supplier could be as short as four months thanks to
the use of standard parts.

Perhaps one of the most high profile gasification failures in the UK was the Air Products
project in Tees Valley. While little is officially known about the reasons for the decision by
Air Products to write off this £1bn project, there appears to have been a number of factors
including erosion of the gasifier walls and failure of the mechanical handling systems. But
more importantly the scale up of the system from a 10ktpa demonstrator to a 350kt project
was well ahead of a normal experience recommendation of a 10x scale up factor. Other
projects with less dramatic scale changes have still found this to be an issue.

WHY PHE HAS FIXED THE KEY ISSUES
The Powerhouse process operates at a higher temperature than most gasification processes
and makes use of a rotary kiln rather than static vessel. These features mean that tar is not
produced removing one of the key issues with gasification.
Because the system has been designed in a modular fashion there is no scale up to produce
larger capacity systems. It is simply a case of adding more modules. This eliminates the
other main issue in gasification.
MOVING DOWN THE LEARNING CURVE
Powerhouse has identified immediate cost savings available in its second generation
systems. Beyond this there are other gains to be made. Aside from the obvious benefits of
greater volume on order sizes and negotiating power, the company has identified savings
potential in the materials used in the kiln. At present the high temperature and potentially
corrosive nature of the waste means an expensive steel is used. Powerhouse has already
identified lower cost materials that can safely be used resulting in a much lower overall
project cost. This together with higher volumes should allow a 40% saving in capex and
opex.

Read latest research @ https://www.powerhouseenergy.net/wp-content/uploads/2020/07/PHE-150720.pdf

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Pick any number of failed gasification projects eg Scotgen, Isle of Wight, Schwarzepumpe etc etc.

Rotary kilns are not new tech - they are used in hazardous waste incinerators routinely. You normally prevent (or limit) corrosion by lining the kiln with refractory bricks.

If PHE is going down the rotary kiln route that means greater energy need (both to turn the kiln, heat to higher temperatures etc) all of which reduces the energy efficiency of the kiln significantly.
Having small scalable units also decreases energy efficiency - you can’t cheat thermodynamics and there is a reason that larger combustion plants tend to be more efficient.

So whilst switching to a rotary kiln will allow higher temperatures and might help with corrosion it will bring significant new problems in terms of efficiency which will only make the technology more expensive and less competitive.

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Interesting company converts waste into hydrogen fuel. Has a number of sites across the UK but still quite early stage.

PHE uses Waste to Energy expertise to help customers destruct and recover energy from their challenging waste streams.

DMG® Technology developed and owned by PHE delivers value for customers through producing electricity and hydrogen as well as other chemical precursors.

Planning permission approved for Peel Environmental to build site completion 9-12 months.

There’s already an existing topic on Powerhouse here: [Request 👋] PowerHouse Energy Group Plc

Didn’t realise thanks…