At the moment, almost everyone is talking about the fact that the future belongs to hydrogen. This is also the opinion of the scientifically intensive start-up Naco Technologies founder Alexander Parfinovich. His company develops technologies for coating equipment components in the hydrogen industry to protect them against corrosion and significantly reduce the use of precious metals in them.
Asked what he really does Naco Technologies, Alexander honestly admits: “I’m sorry, I can’t give a very simple answer.” But he tries and compares nanotechnology to computers. Just as computers can be programmed with different algorithms, nanotechnology can be used in more than one way. And while people often get confused by the term nanotechnology, Alexander explains that nano just means size. Everyone knows centimeters and millimeters. Well, if you divide a millimeter into a thousand parts, you get a micrometer, and a thousandth of a micrometer is a nanometer. A nanocoating is a very, very thin layer. For example, on parts coated with Naco Technologies technology five nanometers thick, this layer is almost invisible. The color in the coating alone helps to see it.
Hydrogen is the smallest and lightest molecule. It is very active and can penetrate many places. When this molecule binds to other surfaces, they corrode – they are damaged. “Our technologies delay corrosion,” says Alexander. In one case, the company covers the components of the technological equipment needed in the hydrogen production process, while in another case, the solution is also intended for companies that develop hydrogen-powered equipment – fuel cells, the components of which also need to be covered with a protective layer and a catalyst layer.
The company has developed a process to efficiently apply anti-corrosion and catalytic nano-coatings. The biggest benefit is the speed of application, the variety of coatings that can be obtained by adapting them to different hydrogen technologies, and their quality. Naco Technologies is not the only company offering to cover components with nanocoatings, but its trump card is the speed at which it can be done. “This means we can cover more parts at the same time than other companies,” Alexander claims. The company also knows how to apply materials that others cannot, such as nickel. in the same way Naco Technologies is working on technologically new coatings to replace platinum and iridium with cheaper materials.
Currently, a relatively large number of catalytic materials, such as platinum or iridium, are used in the coating of hydrogen equipment components. What for coating technology allows to reduce the amount of these materials up to 20 times, significantly reducing the cost of the production process, as well as helping to extend the life of the equipment. “Currently, the electrolyzers used in hydrogen production last about a year. We can extend this period by two to three times, thus the cost of green hydrogen production will also decrease significantly,” promises Alexander.
Hydrogen industry develops at a very high speed, assesses the businessman. He concludes this from his company’s clients – some grow two or even four times faster than before every year. For example, some time ago, the projects at the customer’s production facilities were in megawatts, but now they are in gigawatts. The entire market is growing at a similar rate. Currently produced hydrogen is relatively expensive. Alexander believes that companies investing in this sector now are preparing for the future.
Forecasts show that by 2050, 15% of the energy industry will be hydrogen, and it can be used not only as energy, but also in the production of various products, such as ammonia. “When we talk about hydrogen, we don’t just think about energy. The market will be huge. Many experts predict that this will be the fastest growing market in the next ten years. Hydrogen has a bright future.”
In the long run What for Technologies wants to replace the chemical coatings currently used in the hydrogen industry. “Imagine, green energy is largely produced using equipment with chemical coatings that produce environmentally harmful process waste. We hope to change that,” says Alexander.
Currently Naco Technologies works as a research center. In September, the first pilot plant is expected to be opened in Riga, where half a million components will be coated per year. “This is not a scalable startup type business at this stage. If we do not grow rapidly and move from a research center to a manufacturing company, the market will take the offer of other companies. It is important for us to enter the market as soon as possible, so we are already planning the next one in parallel with the Latvian production facility, where we will work in much larger volumes and cover hundreds of thousands and millions of parts per year,” Aleksandrs reveals the plans.
The creation of the second production plant will require additional investments. The company plans to cooperate with a strategic investor. It is planned that Riga will have the core of the team in years to come, which will be engaged in research and develop technologically complex solutions, which will later be implemented on a larger scale in the company’s future production plants.
Initially, the company intended to license its technology because it was the fastest way to grow, but the market was not yet ready for it. “That’s why we need to become a manufacturing company and a supplier of nano-coated components. In five or ten years, I would like to return to the licensing model and spread this technology as quickly as possible,” says Alexander.
Only for the ambitious for this purpose, the company has attracted European help – this spring Naco Technologies received ten million euros from the acceleration program of the European Innovation Council EIC Accelerator grants and investments. The competition was strong – only 30 projects received funding from 500 applications. “It’s clear that our project is very ambitious, and we are also very ambitious, but winning this program also means that the issue of green hydrogen is very relevant. If someone has a solution that can really help green hydrogen technologies become more accessible and cheaper, it is relatively easier to get financing,” says the businessman.
In yet another project Naco Technologies the next generation has been involved in the consortium together with Finns and Estonians Solid Oxide in the development of an electrolyzer. It is a two million euro project where the partners are developing a specific hydrogen production facility that does not use platinum group catalysts.
Previously Naco Technologies attracted 1.5 million euros of risk capital for the creation of the pilot plant.
The company already has 20 clients who Naco Technologies develops coatings to better protect these companies’ components from corrosion, as well as develop cheaper and more efficient catalysts. Among the customers are Siemens Energy, ThyssenKrupp, Nucera, Cummins, Ballard Power, Plug Power, Toyota and Hyundai. In order to reach such large clients, the team’s previous experience and circle of contacts are useful. However, it only helped to open the doors of the first couple of customers, with the others, relations had to be built from scratch. “We were joined by business development manager Raivis Nikitins, who even through his secretary is able to interest the client in using our services,” praises Aleksandr.
It also helps that the company’s name is still well known in the industry, as a team with the same name worked on another nanotechnology project 15 years ago. “In the beginning, I had a lot of thoughts, whether to use the old name or come up with a new brand. An additional argument in favor of the old name was that no one had done it before, so we decided to give it a try and see what would come of it. But I probably wouldn’t do it the second time,” the entrepreneur admits.
Naco Technologies is an interesting example of a team already having experience in building and selling a startup, and almost the same team is now developing a new business under the previous name.
Previously, Alexander worked as a management consultant for eleven years Deloitte. In 2009, during the economic crisis, he started thinking about a new page in his career, because he was no longer interested in his previous job, and during the crisis, he had to deal with the dismissal of colleagues and not so much with consulting companies. So he went to the science commercialization platform Commercialization Reactor an event where scientists present their technologies and entrepreneurs have the opportunity to join them to co-create a profitable technology startup. There, Alexander met his future colleagues with experience in physics and manufacturing. “Scientist Valery Mitin had some cool technology, and we started thinking about what to do with it. There were many possibilities – to cover tools, car parts, glass and the like. We decided to focus on the automotive industry,” says Aleksandrs. Five years later, their technology was bought by a German automotive company Schaeffler Group. The team continued to work in the company for another five years, introducing technology into production and transferring knowledge. In 2020, almost the entire core of the previous team started work on the next project.
Although the team already had experience selling a startup, they decided to jump in Buildit in the acceleration program. “Ten years ago, there weren’t so many opportunities to learn, you had to do everything by yourself, so this time we joined the accelerator and got a very good experience. Right after that, we also participated in the Estonian acceleration program Beamline, which focuses on clean technologies. I chose Estonia because our neighboring country is the best in the world at creating unicorns. And that’s when we realized that we had to take big steps,” says Alexander.
He believes that today the barrier to entry into the world of start-ups is very low – just an idea is enough. There are many accelerators that offer a variety of learning and mentoring, introductions to industry people, and help attract investment. What happens next is in everyone’s hands. “It’s more a matter of courage. For example, Estonian Bolt founder Markus Willig was 19 years old when he created this success story,” Alexander knows. The acquired experience and knowledge encourage the team to grow more aggressively than the previous project, and Alexander hopes that this startup will be even more successful than the previous one. Although he still does not disclose the amount of the sale transaction, the entrepreneur expects that the scale of this project will be many times larger.
Or is there a plan to sell this company to a major industry player? Alexander Parfinovich says that it is not yet clearly known. Perhaps, this company has the opportunity to realize the initial offer of shares on the stock exchange. “Start-ups are adventurous, try a lot of new things, experiment. Let’s see what we get.”
Expert commentary
Maxim Yegorov
Accenture leader in the Baltics
On smaller and larger scales
Green hydrogen is predicted to have huge potential in the European and global green course. Clusters are formed, projects are implemented – on smaller and larger scales – and the experience gained is very important. Although the role of hydrogen in the energy supply is small for now due to challenges related to cost competitiveness, production volumes, traceability, infrastructure needs and so on, it is expected that hydrogen will be used much more widely in the future.
Those who will be the first with innovative solutions and approaches will successfully master the market of the future. The European Commission has presented the Hydrogen Strategy for a climate-neutral Europe, which aims to accelerate the development of clean hydrogen technologies and make hydrogen the cornerstone of a climate-neutral energy system by 2050. In this area, technology is indispensable, as hydrogen increases the complexity of project planning, development, operation and marketing, which can be overcome using a range of digital technologies: big data, artificial intelligence, blockchain, etc. Digital twins can be used to create a digital representation, and then stakeholders can experiment with several possible scenarios, such as what the results are if the devices use a nanocoating or a new material.
In areas where new solutions are sought, building a portfolio of experience stories, gathering different experiences, is essential to continue growth and improve the final product. The world’s focus on the green economy will not change, so initiatives that help reduce costs and negative environmental impact are supported. At the same time, the market sentiment regarding the energy transition should not be forgotten in the growth of the industry.
2023-07-25 04:04:51
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