Why we invested in Jolt Electrodes — Powering the green hydrogen revolution

Green hydrogen is a necessary piece of the decarbonization puzzle. Not least because many heavy industrial processes cannot become fully electrified and require a fuel/heat source (consider e.g. the steel industry). Since heavy industries account for one-third of all emissions (IEA), many see green hydrogen as an industry that needs to grow immensely.

Green hydrogen is made with electrolyzers that use low-carbon electricity to split water molecules into their constituent hydrogen and oxygen atoms. Fortunately the electrolyzer market is growing rapidly. In 2022 the global installed capacity of electrolyzers reached ~2GW, up 4x from 2021. As indicated in the graph below from BNEF, installed capacity is expected to double each year for the near future and reach over 100x of current capacity by 2030.

As such, it is hardly surprising that investor interest in this space is growing. PE and VC deals are growing in number and size (see e.g. this list of top-10 deals from Hydrogen Insights), as is the number of green hydrogen projects (see e.g. the Pillsbury Hydrogen Map). We are also seeing growing corporate activity, with powerful players joining forces to cater to the rise in green hydrogen demand (e.g. Siemens and Air Liquide).

Interestingly, this space has a clear vulnerability: the electrodes. Regardless of the electrolyzer technology (e.g. Alkaline and PEM), electrodes are a key component, accounting for a large share of the overall cost of electrolyzers (~22% in Alkaline and ~26% in PEM). Unfortunately there has been little innovation in the electrode space in recent decades, so current electrodes are expensive and suffer from limited energy conversion and durability. This leads to significant Opex in the electrolysis process, making hydrogen-based energy ~4x more costly than carbon-based fuels of a similar nature.

In order for green hydrogen ambitions to be realized, the cost and performance of electrodes needs to improve significantly. That’s why we have invested in Jolt and their patented electrochemical technology based on solution combustion. Jolt electrodes are cheaper to produce, more durable, and more effective than incumbent technologies. As a result, Jolt is on track to reduce the electrode cost of electrolyzers by 60% in the short time, and a whopping 80% shortly after. By achieving these cost reductions, Jolt will play a vital role in driving the widespread adoption of electrolyzers.

Electrochemical innovation represents the missing element necessary to expedite the green hydrogen revolution. While electrolyzer and fuel cell OEMs excel in engineering, they lack the essential electrochemical expertise that Jolt brings to the ecosystem.

As the founder and CEO Leon Rizzi puts it “Electrodes serve as the beating heart of all electrolysers and fuel cells. The evolution of electrodes plays a pivotal role in determining the triumph of the green hydrogen industry, much like the revolutionary impact of microchip innovation in the personal computing era.”

Jolt stands out in a few key ways that drove us to make this investment:

1. Differentiating technology: By utilizing solution combustion, their chemical technology initiates a chemical reaction at relatively low temperatures (~200℃), resulting in internal heat exceeding 1000℃. Thus, with low energy input, Jolt generates a coating with significantly enhanced catalytic capabilities. In addition, this process is much faster, enabling Jolt to produce electrodes in a matter of seconds vs. the average production time of several hours commonly observed in the industry.
2. Megaton emission reduction through unprecedented results: The latest Alkaline electrodes developed by Jolt exhibit energy efficiency levels that approach the theoretical maximum, surpassing incumbents by ~20%. These electrodes also show exceptional durability, maintaining high performance for over 10 years (vs. 3–5 years of incumbents). In addition, Jolt is able to achieve these impressive results while utilizing cost-effective, readily available, and environmentally-friendly raw materials, without the need for platinum-class materials commonly used in the industry.
3. Low Capex growth path: The continuous production process employed by Jolt is characterized by its simplicity and use of standard machinery. This streamlined approach allows for the production line to be conveniently situated next to customers at low cost. Also, this process eliminates the need for expensive and energy-intensive batch processes.
4. Powerful team: Leon Rizzi, a seasoned serial entrepreneur, co-founded the company with a team of manufacturing experts and distinguished scientists from the Institute Catalá d’Invertigació Química (ICIQ). The team has an impressive track record of entrepreneurial acumen, manufacturing excellence, and scientific discovery.