While the automotive sector has faced hurdles in widely adopting hydrogen, industrial applications, particularly data centers, may find greater success. Vema Hydrogen recently secured a contract to supply data centers in California and has completed a pilot initiative in Quebec, harnessing hydrogen sourced from deep underground.
The innovative startup operates by drilling wells in areas with specific iron-rich rock formations that release hydrogen gas when subjected to water, heat, pressure, and catalysts. This hydrogen is then extracted and sold to industrial clients.
According to Pierre Levin, CEO of Vema, supplying the local Quebec market, which requires approximately 100,000 tons annually, would only necessitate a mere 3 square kilometers of land. Vema's initial pilot well is projected to yield several tons of hydrogen daily, with plans to drill a commercial well reaching 800 meters into the Earth next year. The company anticipates producing hydrogen for under $1 per kilogram, a competitive benchmark for clean hydrogen.
Currently, the predominant method for hydrogen production involves steam methane reforming (SMR), a process that is energy-intensive and emits carbon dioxide during both the steam generation and chemical reactions. Although cleaner hydrogen sources are available, they generally come at a higher cost. For instance, hydrogen produced via SMR ranges from 70 cents to $1.60 per kilogram, and capturing carbon from this process can increase costs by around 50%. The cleanest methods, which utilize zero-carbon electricity to operate electrolyzers, can significantly elevate prices.
Vema's approach to hydrogen production, termed stimulated geologic hydrogen or "engineered mineral hydrogen," is anticipated to be among the cleanest sources available. Once Vema refines its techniques, it aims to produce hydrogen for under 50 cents per kilogram, making it the most affordable option on the market.
The targeted rock formations are widely found, allowing Vema to drill wells near power-hungry enterprises like data centers. California, in particular, boasts substantial deposits of ophiolite, an iron-rich rock type formed through tectonic activity.
If Vema achieves its pricing goals, the geological advantages could position California as a prime location for data centers. Levin notes, "Many data centers are seeking reliable, decarbonized electricity, and we are gaining considerable interest from them."
