December 8, 2022
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Decarbonizing the sky: Calif. firm’s breakthrough technology is coming to the Sunport

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Universal Hydrogen employees load a module containing the company’s hydrogen fuel capsules onto Universal’s ATR 72-600 turboprop for testing at the company’s engineering and design center at the Toulouse-Blagnac Airport in France. (Courtesy of Universal Hydrogen)

New Mexico has landed a whale in the emerging national and global hydrogen economy, potentially converting the Albuquerque International Sunport into ground zero in the birth of hydrogen-based aviation.

Universal Hydrogen — a California-based startup that’s backed by aviation and hydrogen-related industry giants — announced early this year that it would invest $254 million in a new manufacturing facility at the Sunport to open in 2025. The factory will produce state-of-the-art technology that the company has already developed to rapidly convert existing turboprop aircraft that manage regional passenger service into hydrogen-propelled planes, along with innovative, modular hydrogen capsules for rapid fuel-up at airports where the new hydrogen planes operate.

The company unveiled its plans in a news conference in March with Gov. Michelle Lujan Grisham, who announced $10 million in Local Economic Development Act funding for the project, plus $2 million more in potential LEDA money from the City of Albuquerque, which would act as fiscal agent for the financing. But since then, Universal has largely remained silent on its plans and progress.

Until now, that is.

On Oct. 28, company co-founder and general counsel Jon Gordon broke the silence in an hour-long presentation for local and national reporters, offering an in-depth look at Universal’s breakthrough technology, global business plans and go-to-market strategy, which could well propel the company over time into an international stalwart in the hydrogen industry.

In the long-term, it could provide its drop-in retrofit technology and its compact fuel capsules for many other transportation sectors apart from aviation — including long-haul trucking, rail lines and maritime shipping — and for other industry applications, such as mining equipment.

But for now, it’s focused squarely on aviation, with New Mexico smack in the center, Gordon said.

“New Mexico is in the middle of it,” Gordon told reporters. “We’ll make the (hydrogen) capsules in New Mexico to help serve hydrogen infrastructure globally. It will be built right here.”

Broad industry backing

Most startups that promise disruptive technology capable of shaking up established industries take many years of research and development to bring their products to market. And many, if not most, either fail outright or fall far short of their goals.

Sufficient financial backing is often lacking, and market penetration is extremely challenging, given the need to convince customers to switch to new technologies. That’s especially true in long-time traditional industries like aviation.

But the stars seem aligned for Universal Hydrogen, which already has a solid customer base for its technology in the U.S., Canada and Europe, where aviation companies have signed either letters of intent or firm purchase orders to buy Universal’s plane-retrofit technology and fuel cylinders to immediately convert fleets of planes to hydrogen, beginning in 2025, Gordon said.

In June, for example, Massachusetts-based Connect Airlines — a division of Waltzing Matilda Aviation — signed a “firm order” for Universal to convert 75 of its ATR 72-600 regional aircraft to hydrogen propulsion. The ATR 72-600 is currently the most popular in-production regional turboprop on the market, and Connect signed additional purchase rights for another 25 planes, with initial deliveries starting in 2025.

Canada’s Avmax Aircraft Leasing Co. also placed a firm order in July to retrofit 20 of its leased and owned aircraft, including both ATR 72-600s and Dash 8-300 turboprops. That gives Universal an initial foot into Canada’s robust turboprop aviation industry, which operates the largest regional turboprop market in the world.

And, among others, Universal has additional letters of intent with Ravn Alaska, Icelandair and Spain’s Air Nostrum to adopt its hydrogen propulsion system.

“We have more than 200 planes under letter of intent with 15 or 16 operators across the world,” Gordon said.

Equally important, Universal has direct financial backing and partnerships with some of the largest commercial players in aviation and other industries. That includes American Airlines, Airbus Ventures, JetBlue Technology Ventures, GE, Mitsubishi HC Capital, Toyota Ventures, and hydrogen- and fuel-cell producer Plug Power. Some well-known venture capital firms have also joined, such as Playground Global and Global Founders Capital.

Taken together the company’s corporate and venture backers have already pumped a combined $100 million into Universal.

“We have a great, diverse investor group that reflects practically the entire supply chain,” Gordon said. “… They’re excited about the idea and pace with which we’re building everything out, with commercial service to begin in 2025.”

That backing is critical going forward, because the company will need to raise at least a couple hundred million dollars in additional financing to get into operation, Gordon said.

Meanwhile, Universal’s leadership team is stacked with aviation industry veterans, including former top executives from global commercial aircraft manufacturer Airbus and aerospace engineering firm United Technologies Corp. Universal co-founder and CEO Paul Eremenko previously served as chief technology officer at both Airbus and UTC. Universal’s own chief technology officer, Mark Cousin, is also the former chief engineer at Airbus. And Gordon was previously UTC’s deputy general counsel for technology.

Innovative, ‘green’ technology

Universal’s hydrogen conversion system is particularly compelling for the aviation industry, which is a major contributor to global carbon emissions, but one of the harder sectors to decarbonize as the world strives to reach net-zero emissions by mid-century.

Universal is one of many companies working to replace jet fuel with hydrogen and other alternatives, such as biofuel. But it’s one of the few that have managed to rapidly build a drop-in conversion kit that will be ready for service in just three years, at least to retrofit turboprop aircraft, which by and large provide passenger service for regional airlines serving short routes in the U.S. and other countries.

Those are the single-aisle, narrow-body planes that fit up to 70 passengers in six-seat rows, with three passengers on each side of the aisle.

Universal’s fuel cell electric powertrains are made with off-the-shelf components, designed to swap out existing turboprop engines that burn fuel to operate, releasing substantial carbon and other emissions in the process.

Universal’s powertrain is comprised of electric propulsion units made by Washington-based magniX, and hydrogen fuel cells from Plug Power, which provide the current needed to run the electric motors that turn the propellers, with no carbon emissions. Water is the only byproduct released.

That’s because the hydrogen fuel cells eliminate combustion. They operate through a chemical reaction that creates electricity and releases only water when hydrogen is mixed with air.

And particularly important, Universal will only include “green” hydrogen in the fuel cells, meaning hydrogen that’s made with renewable energy such as solar or wind to power up electrolysis technology, which pulls hydrogen molecules out of water with no emissions in the process.

That’s in contrast to hydrogen derived from natural gas through a process that extracts the hydrogen molecules from methane, emitting significant carbon during production. Unlike electrolysis, natural gas-based hydrogen is riddled with controversy, generating significant opposition from environmental organizations that criticize its reliance on fossil fuels and the carbon emitted in the process.

But by relying only on “green,” or electrolysis-based production, Universal’s hydrogen-propulsion system completely eliminates carbon and other emissions to allow for net-zero conversion of turboprops, Gordon said.

“It’s all from green sources with green electrons using electrolysis,” Gordon said. “It’s a perfectly green way to power vehicles.”

Universal is establishing partnerships now with green hydrogen-producing companies to provide the fuel for its turboprop conversion systems, Gordon added.

Modular hydrogen fuel tanks

But while Universal’s powertrains themselves offer a novel way to rapidly decarbonize turboprops and potentially other vehicles in the future, it’s the combination of those conversion kits with Universal’s new modular hydrogen fuel capsules that constitute the company’s true innovative breakthrough.

The refillable, lightweight capsules will be transported from green hydrogen production sites to airports and loaded directly into aircraft using existing freight networks and cargo handling equipment. That eliminates the need for costly and lengthy airport infrastructure upgrades, making nearly any airport hydrogen-ready from the get-go.

“That’s our real innovation — attacking the problem from an end-to-end approach for aviation, which no one has done before,” Gordon said. “The excuse has always been lack of infrastructure and the need to build pipelines or massive storage facilities at airports with specialized facilities.”

The capsules, or fuel tanks, will be loaded into the plane’s rear fuselage and placed in a compartment that will replace the last two rows of passenger seats. Other than that, no major new designs are needed for installing Universal’s hydrogen propulsion systems on turboprops.

The fuel packs will contain a combined 270 kilograms of hydrogen — enough for a turboprop to travel 1,000 kilometers, or about 620 miles — before replacing them with another set of capsules at the next airport.

Apart from providing regional aviation with a drop-in, end-to-end solution, the modular hydrogen capsules offer a sustainable, long-term business model for Universal, which would continuously supply the fuel tanks to service planes converted to hydrogen propulsion across the globe, and potentially other industry sectors that convert to hydrogen in the future.

“There are about 2,000 to 3,000 of these (regional turboprop) planes operating globally,” Gordon said. “We hope to capture up to half of that market, or more than 1,000 planes.”

Universal will manufacture both the hydrogen conversion powertrains and the fuel tanks at its new facility in New Mexico.

“We see New Mexico as kind of the future of the company,” Gordon said. “When we have planes in the air, we’ll continuously make these modules with new shapes for different applications. We could conceivably double the size of our workforce here in the future.”

Manufacturing homebase in NM

For now, the company projects up to 500 permanent employees when its Sunport facility opens in 2025, with some 1,200 construction jobs before then.

The company currently operates three research and development facilities, including its headquarters in southern California, a new engineering and design center it opened in July at the Toulouse-Blagnac Airport in France, and a new Hydrogen Aviation Test and Service Center it established last year at the Grant County International Airport in Moses Lake, Washington.

It opened the Washington test facility in partnership with its electric propulsion unit supplier magniX, fuel cell supplier Plug Power, and the Moses Lake-based aerospace firm AeroTEC, which develops, tests and certifies new aircraft products. Universal and its partners will conduct the company’s first test flight with a hydrogen-converted Dash 8-300 turboprop in Washington in December.

New Mexico, however, will anchor the company’s manufacturing base going forward, Gordon said.

“Everywhere else, it’s all research and development,” he said. “… We’ll put together the powertrains in New Mexico, and we could even do plane conversions here. And we’ll build all the modular hydrogen capsules at the Sunport.”

The company is under pressure to break ground, given its contracts to start delivering its hydrogen propulsion systems in 2025. It’s selecting architects now, with a project start date targeted for spring 2023.

Universal’s executive team met with Mayor Tim Keller on Nov. 9.

“The mayor is going to be presenting us to the city council later this month for LEDA approval,” Gordon told the Journal this week. “Once it is approved, we will be able to hire architects and really get going on the site.”

Time is of the essence, Gordon added.

“Our aircraft development is proceeding at full pace, and we need to pick up the speed on building out that manufacturing facility. It’s a huge undertaking,” he said.

The company has leased about 100 acres northeast of the Sunport passenger terminal in an area that used to occupy a north-south runway that was decommissioned in 2012.

“It’s a beautiful site — very visible — that people will see as they land in Albuquerque,” Gordon said. “… We’ll have hundreds of employees there, so it will be a bit of a village with hopefully restaurants and apartments in the area to support our operations.”

Building a hydrogen industry in NM

New Mexico lobbied heavily to bring Universal to the state, where many other companies are now also pursuing new hydrogen projects and technology development, both in urban and rural areas. That includes:

• Efforts by Tallgrass Energy to convert the old coal-fired Escalante Generating Station near Grants into a natural-gas based hydrogen production and power plant.

• Plans by Libertad Power LLC to build a green, electrolysis-based hydrogen production facility near Farmington to supply fuel for long-haul hydrogen trucks along a new Southwest Clean Freight Corridor that will stretch from the Port of Los Angeles to central Texas.

• Development of compact mobile hydrogen generators by Albuquerque-based BayoTech Inc., which expects to begin deploying them in hydrogen hubs across the nation starting early next year.

• Advanced efforts by Albuquerque-based startup Pajarito Powder to develop alternative catalyst materials for fuel cells and electrolyzers used in green hydrogen production that can substantially lower the costs for both technologies.

The New Mexico Partnership and Scott Fosgard Communications jointly organized a week-long media tour in late October about local hydrogen development, which included Gordon’s presentation on Universal.

“We want to bring attention to the work that New Mexico has already done here in the hydrogen space to show that the state has a strong, growing ecosystem to support additional opportunities,” NM Partnership president and CEO Melinda Allen told the Journal. “As the hydrogen industry grows across North America, we want to establish New Mexico as a central hub in the emerging hydrogen economy.”

That’s something Gov. Michelle Lujan Grisham is aggressively pursuing through a partnership with Colorado, Utah and Wyoming to attract federal funding to build out a regional hydrogen hub.

Those efforts helped attract Universal to Albuquerque, said Joe Britton, former chief of staff for U.S. Sen. Martin Heinrich, D-N.M., and now president of Pioneer Public Affairs — a climate and clean energy firm working to recruit new businesses to the state.

“During site selection, New Mexico made clear how invested the state is in developing energy resilience in the cleanest possible way, providing tailwinds for (Universal) to establish operations here with open, welcoming arms and durable support,” Britton said. “We’re thrilled to make it a reality and (they’re) about to make real material progress.”

Universal’s project marks the beginning of Hydrogen-based aviation, with New Mexico playing a central role, Gordon said.

“It’s a once-in-an-era transition from fossil fuels to hydrogen in aviation,” he said. “… It’s a real thing, and it’s happening much faster than people think.”

Hydrogen-based aviation takes off

Company will build factory at the Sunport, employ 500…

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