HelioHite: Solar-Powered Green Hydrogen and Graphite Production

Rob Gardiner: LIS Petition to Graduate
HelioHite Business Model and 2023 Knapp Competition Winnder

EXECUTIVE SUMMARY

HelioHite is a disruptive clean technology company developing a turnkey solution to sustainably produce high-purity synthetic graphite and green hydrogen. Unlike other competitors who use energy intensive and high temperature processes, HelioHite utilizes energy from the Sun and creates a unique solution for global decarbonisation.

Opportunity
As the world accelerates its clean energy transition, synthetic graphite and green hydrogen will be two valuable resources used to build out sustainable, carbon-free infrastructure and technology.

Graphite serves as the anode for lithium ion batteries, whose demand grew by 46% in 2022 as energy storage has become more valuable and the Inflation Reduction Act’s (IRA) tax credits have spurred immense growth in renewable energy storage. Synthetic graphite, which has significant performance improvements in batteries compared to natural graphite, is seeing new use cases as battery technology continues to grow and evolve. Natural graphite, which is mined mainly in China, has severe environmental consequences due to runoff and waste, and as the industry grows, cannot supply the necessary graphite demanded by the market, further emphasizing the value of a sustainable way to produce graphite.

Hydrogen fuel, which is mainly used to refine petroleum and make fertilizer such as ammonia, has massive potential in the transportation and energy storage industries. Most current hydrogen production is classified as gray hydrogen, using a steam reformation process that converts methane into hydrogen, and emits all carbon in the form of greenhouse gasses. Green hydrogen, which is produced without any carbon emissions, is heralded as the future for all production of the $160 billion industry with a predicted 12% CAGR. With only 1% of the current hydrogen production being green, there is massive potential for the expansion of this portion of the industry, especially as public-facing companies look to reduce their Scope 3 emissions.

Product
This product sets itself apart from its competitors by requiring no electricity input; it instead utilizes an array of mirrors to concentrate sunlight. This sunlight is directed into a concentrator where methane pyrolysis takes place to split the biomethane input into solid carbon in the form of graphite and hydrogen. The current technology, which has been developed in the California NanoSystems Institute at UCLA, will launch a pilot project in the California desert starting in 2024, in collaboration with the California Energy Commission and SoCal Gas. The technology has a hydrogen efficiency of around 72%, and a graphite efficiency of around 62%, which both equal or surpass key competitors in the space.

Competitive Advantage
Beyond having an extremely competitive technology in terms of hydrogen and graphite production, the turnkey, zero-emission, and low variable cost nature of HelioHite’s product is what sets it apart from other competitors in the space. All other pyrolysis technologies require electricity to generate the necessary heat, which can be extremely expensive and unsustainable due to the unclean origins of most grid electricity. HelioHite takes advantage of solar rays to generate heat, and therefore doesn’t need any electricity to power their reaction. This will lower the variable costs of producing both graphite and hydrogen beyond all other competitors, and aligns with the company’s goals to provide a fully sustainable and zero-emission solution.

Market
There are four main markets that the HelioHite business will participate within: biomethane and carbon felt as inputs, and hydrogen and graphite as outputs. The hydrogen market is nascent, but applications for the element provide a tremendous upside. Long term transportation, industrial manufacturing, and agriculture are all industries with immediate demand for the energy source. Additionally, there is current demand for synthetic graphite due to the growing materials’ applications in batteries and solar panels.

Strategy
HelioHite will operate under a business-to-business model, selling into other industries’ supply chains. The company will own and operate an eight acre plot of land with 712 solar concentrating dishes that is projected to be completed by 2032. The hydrogen and synthetic graphite outputs will be sold to the market, creating a multi-dimensional revenue stream. The business is modeled to generate a 51.78% gross margin, 14.8% net margin and 17.33% 5-year internal rate of return.

IMPORTANCE
Green production of hydrogen and batteries will be instrumental for the energy transition to succeed. Moreover, the modularity of the HelioHite technology diminishes the complications that arise from producing at scale, hydrogen transportation and cost per unit of energy.

I decided the join the HelioHite team because of the learning curve that it presented. First, I partnered with engineering students for the project. This provided a platform to understand how technologies are develoed and how engineers approach solution driven work. Second, working with HelioHite presented a chance to understand the complexities for building out new technologies in the energy transition. This included the capital required to build out hardware, proving customer traction and achieving cost comparable to the incumbent. Lastly, working with HelioHite taught me how to efficinently communicate and simplify a technical idea.

IMPACT AND REACH
I worked with the HelioHite team through the Knapp competition. The rights to the idea remained within UCLA, and since an engineering professor has been attempting to commercialize the technology. The immediate impact of the project was on the individuals we pitched to and everyone who attended the Knapp Competition.
The work we did directly contributed to the stage of the technology right now. Once the technology is commercial, it will help push the energy transition.

COLLABORATIONS
The HelioHite team was comprised of 3 MBA and 2 engineers. Thus, we had to collaborate across the different backgrounds and skill sets. Moreover, we had different advisors through the project who we had to work with to refine our pitch.

One of my main responsibilities was the financial model, and I had to work the engineers to understand the exact energy output of the technology. Through this, I learned the importance of working backwards to remain on the same page.

YOUR ROLE WELL DEFINED
I had three main responsibilities throughout the project; hydrogen section of the report, financial model and pitching the business. For each of these, I took the lead on the work, ut needed to lean on teammates for support. In doing so, I exhibited leadership qualities for each workflow. I did this through allocating work, communicating across different work flows and constantly asking for feedback from members.