Star Scientific Global group Chairman Andrew Horvath recently spoke at the Smart Energy Council Conference and Exhibition in Sydney Australia. Please see below the speech transcript.

Good Morning.

Thank you for the invitation to speak, I would like to thank the Smart Energy Council and sponsors for the opportunity.

In the time available I would like to address what we see as five key myths in the current conversation about hydrogen here in Australia and globally.

But first I’d like to give a quick recap about who we are and our key technology, the Hydrogen Energy Release Optimiser, or HERO®.

Star Scientific is often confused as a start-up. We are not.

Star Scientific Limited, in its current form, is approaching its 25th anniversary. For the bulk of that period, we have been investing in the search for muon catalysed fusion, and our private investors have contributed up to $100 million in that effort.

Just over four years ago, our principal scientists Steve Heaton and Sam Kirk encountered an anomaly in one of the test units. This anomaly we soon realised was a profound discovery – a catalyst that converts hydrogen and oxygen into instant industrial heat, the only other output being pure water. Importantly, it is a “true catalyst”, in that it is not consumed in the process and reverts to its inert state once the gases are removed, therefore there is no combustion. HERO® thus offers clean heat for industrial purposes 24 hours a day, 365 days a year.

The beauty of HERO® is its scalability. When mated with technology such as the new generation of super-critical sCO2 turbines, HERO® can be utilised for small-scale, off-the-grid power generation purposes, particularly in regional and remote locations. It can also be scaled up to develop stand-alone smart grids, taking large industrial users off the main grid.In terms of our journey, we are coming towards the end of our first phase of development with the commissioning of our first prototype heat exchanger, which is currently making combustion-free steam in our facility at Berkeley Vale on the NSW Central Coast.

We expect our first retail, commercial customer will be in around 3 years’ time. However, we are now entering into an exciting period of translational research, with early adopters who we hope will be supported by governments, who are willing to install our first HERO® units into their production processes. We will essentially be in the business of selling heat and we expect those early adopters to be from places like the food industry, who are urgently trying to find alternatives to fossil fuels for cooking and drying processes and pasteurisation. We are in a number of very productive discussions with that sector at present.

We are immensely proud of HERO®. We firmly believe that hydrogen, and by that, I mean “green hydrogen” will lead to an industrial revolution as profound as that driven by the discovery of coal and oil. And we believe that HERO® will be to hydrogen as the steam engine was to coal. However, there are a few pieces of false group think around hydrogen that need to be addressed if we are going to achieve that vision.

Firstly, hydrogen in not a “small player whose impact is a long way into the future”. We constantly hear this from mainstream commentators, politicians, bureaucrats, presenters, and consultants who are critics of hydrogen. We also hear this echoed, in a subtle way, from those companies in the fossil fuel sector who claim to be champions of hydrogen.

This small thinking is a trap. It will force a self-fulfilling prophecy if we allow it to take hold and the development of hydrogen will therefore be needlessly slow and delayed. We do not need lecturing about the myriad so-called supply side problems of hydrogen, the impact of which is seeping into the consciousness of policy makers like a poison.

If we ARE going to lead the hydrogen revolution and if we ARE going to become a sustainable energy “Superpower” we need to think much, much bigger about the production and deployment of green hydrogen, by orders of magnitude.

Secondly, it would be an absolute tragedy for Australia if we were to demolish our fossil fuel infrastructure.

There is a false political debate in Australia that pits sustainable energy infrastructure in a zero-sum game against fossil-fuel infrastructure. This is nonsensical groupthink. Why, for heaven’s sake, would we throw out perfectly good generation and transmission infrastructure?

In Hamburg in Germany, they are about to demolish a brand-spanking new coal fired power station that cost 3 billion Euros and was commissioned only 5 years ago. This is madness, in our opinion, as it will throw the weight of power generation on old, inefficient, dirty power stations from the 60’s.

In the end these power stations are just big turbines driven my steam boilers. The power station is not the problem, the problem is the fuel. The technology exists and we have proven that it would be relatively easy to flip them to green hydrogen, with significant savings to their operations. To that end, it would be a tragedy to lose Eraring and Vales Point off the grid.

Thirdly, this is not just an export play. Let’s not fall into the age-old Australian trap of just exporting a cheap commodity for others to add value.

Yes, export is going to be an important driver of Australia’s hydrogen economy in the short to medium term. However as technological advances continue in things such as floating deep water wind turbines, we believe green hydrogen will be produced closer to their markets, driven, in part, by the growing search for energy sovereignty by fossil-fuel “have nots”.

We believe the domestic use of green hydrogen for industrial energy and heat is the most exciting side of the hydrogen equation. By taking major industrial uses off the grid, we will be able to finally meet some historical aspirations around regional development, for instance by placing data centres and factories in regional centres. Further, Australia is dotted with rich mineral deposits that are currently uneconomic to mine because we cannot get energy to them. Stand-alone hydrogen systems will take that away.

Fourthly, it will be the developing world, not the developed world that will drive the hydrogen uptake.

As I said in my opening remarks, we are on the cusp of a profound industrial revolution, and it will be those nations that have been held back by a deficit of domestic fossil fuels that will drive it.

For example, earlier this year Star Scientific signed an MOU with the Republic of the Philippines to help them on their hydrogen journey. The Philippines has a highly educated population, half of whom are under 25. They WANT economic development, that conforms to their difficult geography and which is sustainable. They have a vision of being the “Green South Korea”.

Further, once we started winning global awards for HERO®, our phone has been ringing off the hook from Africa. The African continent has a lot of challenges in its energy journey, but the opportunities for hydrogen are significant.

Fifthly, and finally, the most important governments contribution is not about money.

Yes, OK, targeted and sensible government funding for things such as the translational research I mentioned in my opening remarks is important. I think there is something wrong with the design of our funding programs if the bulk of them are going to large multi-national corporations with billion-dollar balance sheets. Instead, the most important thing governments can do is the far less sexy, hard grind around the regulatory environment. For hydrogen to flourish, we desperately need a uniform, national – if not global – approach to hydrogen regulation and skills development.

This is why Star Scientific has put its money where its mouth is and supported the Smart Energy Councils’ initiative for a Zero Carbon certification scheme.

Another area for government is to invest in translational research to support early adopters and fund pilot projects that encourage the switch to hydrogen. Where there is demand the market will rearrange itself to meet that demand.

Thank you for your time. As I said at the outset, we are on the cusp of a green industrial and economic revolution thanks to hydrogen. We just have to be careful not to fall into the trap of thinking too small and viewing our challenges as insurmountable.