In times of crisis and uncertainty, it is crucial to transform business models. Exolum, a new company owned by CLH Group, stands as an agent of change that generates opportunities with viable and sustainable projects.
Exolum is born out of the CLH Group’s need to promote the diversification of its activities and to move towards sustainability. Its goal is to promote new business opportunities committed to development and sustainability.
What do you propose?
At the risk of sounding very commonplace, I believe that, even in these times and regardless of the sector or type of organization that we are referring to, there is not one organization that is currently not involved in projects for change and, even more so, that is not internalizing mechanisms change into its DNA. CLH Group is no stranger to this need to define mechanisms that internalize the change to the culture of the organization. On the other hand, analyzing the areas in which an organization can (and should) assimilate, invigorate, and spark changes, it is unquestionable that one of these areas is the change to business models and activities. Under this perspective, Exolum is the mechanism designed by the CLH Group to approach the need to change business models.
When it comes to defining the ideal structure and organization to boost its diversification projects, CLH Group assessed different possibilities and, in the end, chose to create a subsidiary that is 100% owned but still independent from the parent company to handle the identification, evaluation, selection, testing, and implementation of new business models, far from CLH’s traditional business. That is Exolum.
Who is he?
Specialized in business consulting and analysis and management of science and technology, Felix Gomez has a Bachelor’s Degree in Chemistry by the University of Granada and a Masters in Business Management by the Polytechnic University of Madrid. He obtained a PhD from the University of Oviedo and has different degrees and certifications from the Carlos III University of Madrid, the National Distance Education University (UNED), the IESE Business School, and the IE Businesses School. He developed his career with CLH Group in the R+D+i area, becoming the Assistant Director of Innovation and Entrepreneurship. He has worked as Director of Exolum since January 2020.
In just a few months, with COVID-19, the concept of innovation and entrepreneurship has changed. In what sense? What have we learned from this global health and economic crisis?
There are numerous definitions of innovation. This term has such a broad meaning that it is risky to say that the COVID crisis has modified it.
Any definition of innovation must incorporate two components: change and success. In other words, innovation entails doing something differently (product, service, process, management, business model, etc…) with a greater added value than the one obtained in the previous scenario. As a concept it is still valid.
It is possible, though, that the crisis has reduced our aversion to change, simply because one of the requisites for change, the sense of urgency, has appeared in its fullness and in this scenario of sense of urgency all components for innovation have been useful.
Indeed, the concept of innovation has not changed but it is possible that we have put the best of every individual and organization into driving innovation (in all its aspects) as the best answer to the crisis.
As a second derivative, we could expand on other very important aspects that we have learned from this crisis, including the increased agility of the response, which from an academic point of view we could associate to the concept of Minimum Viable product (the relevance gained by some solutions that, not being final, meet their basic purpose in an immediate manner) or the collaborative search for solutions (which we could associate to the concept of co-creation), etc.
Are crisis a time of opportunity?
A crisis is, above all, a crisis, and therefore they are more negative than positive. This is why we try to anticipate and mitigate crisis; if the fundamental characteristic of crisis were that they are opportunities, the goal would be to boost all possible crisis, and I don’t believe this is the universal trend (although in some specific cases provoking a crisis could have a beneficial cathartic effect.)
A very different matter is that a crisis that for whatever reason could not be anticipated and mitigated, and therefore should be faced and overcome, could be faced in the most efficient way possible, identifying all possible changes that it has forced us to introduce and that – for various reasons – would not happen had it not been for the situation sparked by the crisis. It is also true that a crisis situation changes our stance as observers and enables us to face problems from a different perspective, which allows reaching different solutions that are perfectly valid once the crisis is over.
THE CRISIS HAS REDUCED OUR AVERSION TO CHANGE BECAUSE THE SENSE OF URGENCY HAS APPEARED IN ITS FULLNESS
You analyze the market and identify new business opportunities. Are infrastructures still the stars of growth and investment?
In principle, we don’t walk away from any business model, the only a priori condition we establish in assessing an innovative business opportunity or model is that it includes some type of contribution to meeting the Sustainable Development Goals. But having said this, it is also true that we can find the most opportunities for success in businesses linked to infrastructure development and management.
Similarly, we must ensure that these businesses should of course be sustainable from an economic standpoint, but must also contribute to achieving the SDGs, developed in the most efficient and eco-friendly manner, and, from a design and operation perspective, utilize some of the opportunities offered by the wide range of possibilities normally referred to as industry 4.0.
The recently approved Law for Climate Change encourages the use of renewable gases like biogas, biomethane, and hydrogen. Is this an incentive? Are there specific plans?
The climate change bill will undoubtedly promote compliance with national objectives in this area (increase efficiency, emissions reduction, rise of sustainable energies). It is similar to other energy and environmental legislation in which the establishment of certain quantitative limit to an emission or emissions mobilizes the sector or sectors involved in achieving them.
Having said that, I believe there is a relevant consideration to be made in two ways:
- Firstly, from the point of view of the concept of “technology neutrality”, the objectives necessary to reduce or reverse the environmental impact should be defined and then leave it to the sectors and individual companies in each sector to develop the most efficient technological solutions to achieve those objectives.
- Secondly, I think it is important that the emissions goals are established considering the total life cycle of the fuel, energy carrier or energy resource in question. If we include emissions in the total fuel life cycle, some sustainable second-generation fuels that have zero or near-zero emissions in their full life cycle will have an opportunity in the market, also contributing to the zero emissions goal; this opportunity would fall apart if we separately consider different links in the life cycle where the behavior of these fuels may not be as positive.
With regards to the existence of plans, it may be appropriate to mention the National Integrated Energy and Climate Plan 2021-2030 (PNIEC). The PNIEC is one of the fundamental proposals for the national strategic framework for energy and climate and, indeed, it includes measures to promote renewable gases.
In the specific case of hydrogen, there are different documents at the international level (for example, from the International Energy Agency) or at the European level. At the national level there are two documents, still in the stage of prior public consultation, such as the “Renewable Hydrogen Roadmap” and the “Storage Strategy”.
Is it incorrect to state that hydrogen is a dirty fuel? Can it be produced using renewable sources like wind and solar?
The use of hydrogen as a fuel, both in a combustion reaction or hydrogen fuel cells, generates water as the only product, and therefore its use as a fuel has zero environmental impact.
As previously stated, hydrogen is an energy carrier and as such its more or less clean character will be insofar as all the stages involved in the entire value chain are also clean. In its total life cycle, the hydrogen obtained from natural gas does show GHG emissions. But in this sense, hydrogen is no different from other energy carriers such as electricity, whose impact depends on the form of electricity generation, or biofuels which impact depends, among other things, on the impact on land use.
If hydrogen is obtained by electrolysis of water from renewable energy, the complete life cycle of hydrogen production and use does not generate any greenhouse gas emissions and is therefore an absolutely clean energy carrier.
WHEN CONSUMED AS FUEL, HYDROGEN GENERATES WATER, AND THEREFORE IT HAS ZERO ENVIRONMENTAL IMPACT.
HYDROGEN IS AN ENERGY CARRIER AND AS SUCH ENABLES TO CONVERT OTHER TYPES OF ENERGY INTO CHEMICAL ENERGY
COVID-19 and climate change are intimately related. What challenges does the new normality entail for the energy transition?
The energy transition is necessary (as are other aspects related to the environment such as the transition to a circular economy), and what the COVID-19 crisis may have done will be increasing the sense of urgency by having awakened or increased the sensation that humanity’s relationship with the use of the planet and its resources must be rebalanced.
In this sense, it is likely that the health crisis will promote initiatives to minimize environmental impact, including the energy transition towards a low-carbon economy. But we must be cautious so that the sense of urgency does not prompt us to make decisions that, may not be the most efficient in the long term.
And what about in the case of mobility?
In the case of mobility, it is possible that different vectors will influence and often be in opposition, and I am not clear as to what will be the global result of the changes in the intensity of mobility. On one side, the changes in work organization towards promoting the home office mode will decrease the need for compulsory mobility; but on the other hand, the remaining compulsory mobility and non-compulsory mobility may increase the use of the personal vehicle. At this time I do not know what the final result of all these influences will be and I wouldn’t know how to assess the influence on relatively new mobility models such as carsharing.
From another angle, the subjective link between COVID-19 and environmental impact may accelerate the transition towards less-polluting forms of mobility. In this sense, COVID-19 can promote electric mobility or other solutions with a similar environmental impact, but more efficient in certain cases and niche markets, such as second-generation biofuels, e-fuels or hydrogen.
Hydrogen is among the opportunities. Is the agreement with Plug Power to extend hydrogen use in Spain an example of this strategy?
Collaborative economy has made tremendous progress in recent years; this advance is tangible in all sectors in the areas of collaborative consumption and open knowledge. Similarly, collaborative economy has also advanced in the field of collaborative finances and, although to a lesser extent, also in collaborative production.
I believe that collaborative production can, in many circumstances and sectors, offer society efficient solutions in every way; it is about designing networked work systems to propose joint solutions from different organizations to a certain value chain that, by maximizing efficiency in each link, form a solution with greater global efficiency.
Plug Power is a global benchmark in the field of energy solutions based on fuel cells and hydrogen. It has developed and implemented efficient solutions in different sectors. Our agreement with Plug Power will allow us to incorporate its equipment, but also its integration solutions and its know-how to the projects we tackle in the domestic market. We understand that it could effectively be an additional contribution to hydrogen-based solutions and fuel cell penetration in our country.
COLLABORATIVE ECONOMY HAS MADE PROGRESS IN THE FIELD OF FINANCES AND, TO A LESSER EXTENT, IN COLLABORATIVE PRODUCTION
Why is hydrogen a key element in the energy transition? What solutions does it bring?
First of all, I think we should insist on the fact that hydrogen is not an energy commodity, that is, it is not an existing element from which we can extract the energy it contains (I am talking about the earth, the sun is something else). Hydrogen is an energy carrier and as such it allows us to convert other types of energy into chemical energy that can be stored and transported.
Therefore, hydrogen’s role in the energy sector is similar to that of electricity. Hydrogen represents a versatile solution that contributes to the achievement of practically all the objectives in the energy field, because it allows reducing the environmental impact, diversifying the sources of energy commodities, and improving the security of supply while creating a new technological sector that can help create economic activity and employment.
Although electricity and hydrogen each have characteristics that make them more efficient in specific circumstances or niches, perhaps the possibility of storing large amounts of energy may represent one of the competitive advantages of hydrogen. The energy transition requires a significant development of renewable energies and, in turn, this development requires energy storage systems to respond to different storage scenarios and needs. Virtually all studies on the subject give hydrogen a fundamental role in the storage of large amounts of energy.
In addition to the key role of energy storage for the energy transition, hydrogen is a very versatile solution that allows progress in the decarbonization of different sectors like industrial (chemical, iron, steel), residential or transport (last mile logistics, long distance, merchandise…) where the elimination of traditional fuels is not completely resolved.
Why is it that Spain can become one of the main renewable hydrogen producers in Europe?
We have natural resources for renewable generation and also the technology, knowledge, and know-how to drive renewable generation. As we mentioned earlier, there is a virtuous circle between renewable generation and hydrogen technologies.
I believe that we are in a position to make hydrogen a relevant sector in the energy value chain in our country and a niche for creating activity and employment. The relative position in which we can stand with respect to other regions or countries will depend on different variables; of course the vision and strategy will depend on the different companies that contribute in the value chain, but it will also depend on a clear commitment from the different administrations.
Is hydrogen transport and storage one of the challenges to compete?
Electric energy battery storage has vastly improved in effectiveness and efficiency and undoubtedly these are technologies that will allow the implementation of electrical solutions in different niches both in the transport sector and in the residential or industrial sector. Nonetheless, one of the advantages of hydrogen is the possibility of storage, so overall we can say that the applications in which the amount of energy stored is a factor represent an opportunity or competitive advantage for hydrogen.
There are different technologies for hydrogen storage (gas, liquid, organic liquids, ammonia…) each one more suitable for a specific use and all with possibilities for technological development that increase its efficiency or decrease the associated cost.
As previously stated, energy storage for leveling supply and demand is a requirement for the development of renewable energy, and hydrogen presents different mass storage possibilities that provide this functionality. Consequently, it is not risky to affirm that the development of hydrogen technologies and industry represents an irreplaceable lever in increasing the penetration of renewable energies.
Also related to hydrogen storage technologies, in the mobility sector niches where the amount of stored energy is relevant for reasons such as the volumes/weight transported or the necessary driving range, solutions based on hydrogen also have competitive advantages.
Aviation is another sector where they are seeking ways to innovate. However, it is one of the most polluting. Is it possible for this sector to lower its carbon footprint?
I do not know if we can say that aviation is one of the “most polluting” sectors. In absolute terms, there are different sectors that pollute more; what is undeniable is that aviation has significantly increased its contribution to total emissions as a result of the growing activity in the sector.
As a sector, aviation has made notable efforts to reduce its emissions through improvements in aspects such as turbine performance and operating practices. The sector has very ambitious emission reduction targets for 2050.
To achieve this, it must deepen the operational practices and technological improvements of airplanes and turbines, but it will not be enough and the most notable contribution to the reduction of emissions in the sector must come from the use of less polluting fuels. In this sense, over the next years said fuels will be represented by the Sustainable Aviation Fuels (SAF).
Therefore, we must expect an increase in the penetration of sustainable fuels in the aviation sector, either by complying with the minimums established by the law at some point, or as a measure introduced by the aviation sector to meet its emissions reduction goals.
Does use of hydrogen in transport meet the requirements for driving range, power, and refueling time?
It undoubtedly meets them at a level comparable to that of current fuels. In scenarios where the greatest impact can be represented by the local concentration of polluting elements, hydrogen-based solutions provide zero emissions, therefore equivalent to the emissions of electric vehicles. Added to this environmental behavior, the driving range and refueling time is comparable to that of current vehicles equipped with a combustion engine.
In other segments of transport such as last mile delivery or long-distance freight transport, the advantages of zero emissions and low refueling time are combined with a greater autonomy than that of equivalent electric vehicles.
In other niches, like logistics or backup hydrogen generation, it also represents an interesting solution.
THE ENERGY TRANSITION REQUIRES THE DEVELOPMENT OF RENEWABLES AND STORAGE SYSTEMS.
WE MUST ANTICIPATE A RISE OF SUSTAINABLE FUEL PENETRATION IN THE AVIATION SECTOR.
Are hydrogen fuel cells a viable option?
This question can (and should) be answered with an unequivocal yes, especially if we refer to hydrogen batteries. The hydrogen batteries sector is a mature sector in some markets or geographic areas, there are different mature technologies and many are in a state of development with the possibility of also entering the market in the coming years, and there are consolidated companies that design, develop, manufacture and supply fuel cells for countless solutions.
I also think that it is worth mentioning the existence of fuel cells that use other energy carriers, such as direct methanol fuel cells, which, although are a less widespread solution than hydrogen fuel cells, already exist as marketable products and may be a viable and environmentally neutral solution (with the appropriate methanol manufacturing processes and accounting for the complete life cycle, as mentioned above).
Are there enough hydrogen stations?
In our country, you can count then with the fingers of one hand (and have fingers to spare) so we cannot say that there are enough. The problem is that these infrastructures require significant investments, and therefore need a certain level of activity to pay off, while, on the other hand, the demand (and therefore the level of activity to include in the business models) is non-existent or very low, which makes investment decisions difficult.
It is not a completely unusual dilemma, whether it is the market that is pulling infrastructure development or on the contrary it is the proliferation of these infrastructures that is driving demand in a given market.
Taking into account the aforementioned advantages associated with the use of hydrogen as an energy carrier, if the Administrations articulate support mechanisms (usually necessary in any emerging technology) we will undoubtedly have the necessary network to supply the niches or segments where hydrogen is the most efficient option.