Getech has signed two exclusive strategic partnerships, which together position Getech at the forefront of work to establish a national network of hydrogen generation, storage and retail hubs.
Exclusive strategic partnership was signed with H2 Green which is focused on establishing a network of large-scale hydrogen generation, storage and refueling hubs to support public and commercial transport fleets.
The strategic partnership includes an exclusive option for Getech to acquire H2 Green for total consideration of up to £1 million, with payment terms structured around commercial and financial performance milestones and with a material equity component to align H2 Green management with Getech shareholders.
Getech and H2 Green’s work has advanced significantly with the signature of a Memorandum of Understanding between H2 Green and SGN Commercial Services (SGN), which is a part of the SGN Group, one of the UK’s largest gas network operators.
The MoU focused on the regeneration and redevelopment of SGN’s extensive land portfolio to create green hydrogen hubs to facilitate hydrogen generation, storage and retail for buses and HGVs. An initial focus list of 30 potential hydrogen hub locations has been agreed.
“The hydrogen economy is an exciting growth area where we see material potential to apply Getech’s geoscience and geospatial expertise in work for existing and new energy customers. We are therefore delighted to be using our core skills to support the creation of a national hydrogen infrastructure. The signature of an exclusive strategic agreement with SGN stands as testament to the success of our collaboration with H2 Green.
“The opportunities for our skills and technologies to generate revenue whilst supporting the decarbonization of the transport sector are significant. Getech’s option to purchase H2 Green is illustrative of the ambition, scope and materiality of the Group’s zero-carbon business development activities. This option provides Getech shareholders with a potential path to capturing transformative asset value, and this is a commercial model that Getech is exploring in other areas of its energy transition work.
“This work also demonstrates Getech’s adaptability and our focus on the broader hydrogen economy including the potential to apply our geoscience expertise to challenges associated with carbon capture and seasonal hydrogen storage. Our products, skills and technologies are ready to be deployed in other parts of the energy transition, and we look forward to updating shareholders on further developments in due course.”
Jonathan Copus, chief executive officer of Getech.
“H2 Green has been developing a differentiated business case for hydrogen supply. We believe the key to providing affordable hydrogen lies in an optimised network of hydrogen supply, developing alongside demand growth. We also see clear opportunities in redevelopment and repurposing of existing infrastructure. Our links to industry and government have been central to us developing the concept and the strategic relationship with Getech, which we are announcing today, will allow us to accelerate the business proposition. Getech’s world-class geospatial expertise allows us to take our analysis of site and network development to another level, and importantly, pass that value to our customers in terms of a lower price per kilogram of hydrogen.
The opportunity to join Getech is particularly exciting for us. Together we have the capability to develop a pipeline of strategic opportunities and rapidly scale our offering nationally. I am particularly pleased to work closely with Stuart Paton and Jonathan Copus, bringing their prior C-suite experience to the fore, where they financed and executed major capital projects for asset-intensive energy companies.”
Luke Johnson, chief executive officer of H2 Green.
Under the exclusive partnership agreement, Getech will use its location analytics expertise to help H2 Green locate, rank and build a network of large-scale hydrogen generation, storage and refueling hubs, creating a highly efficient UK-wide network to support public and heavy-duty transport fleets.
In undertaking this work, Getech will develop proprietary workflows that use real-world data to predict patterns of hydrogen usage and identify and high-grade potential hydrogen hub locations. This data-driven approach underpins H2 Green’s plan to deliver a low-cost national network of reliable clean hydrogen for the UK. Based on modeled project economics, Getech believes H2 Green’s approach has the potential to reduce hydrogen costs by more than 20%.
Getech and H2 Green are additionally collaborating on a variety of product ideas that are positioned to help fuel users kick-start their transition to net zero.
As part of this strategic partnership, Getech has negotiated an exclusive option to purchase H2 Green from Luke Johnson and Ian Spencer, the existing owners of H2 Green.
Technical, commercial, legal and regulatory validation work is currently being undertaken on behalf of Getech by expert third-party providers. H2 Green’s strategy is structured around a holding company (HoldCo) with multiple underlying site-specific operating companies (OpCo).
Capital investment would be raised at the OpCo level, potentially from different sources, with H2 Green retaining a carried interest in the OpCo. Modeled project economics indicate that this strategy has the potential to generate ‘multi million pound’ annual EBITDA at each site. This model scales rapidly through the planned establishment of a regional network of hydrogen hubs, which could be further built out both nationally and internationally.
Getech has secured a mechanism through which its cost can be recovered if Getech decides not to exercise its purchase option but H2 Green is subsequently acquired/financed by a separate third party.
To further oversee this initial investment, Getech’s chairman, Stuart Paton, has been appointed as chairman of H2 Green and Jonathan Copus, Getech’s CEO, is to be appointed as a non-executive director of H2 Green.
In the event that the Option is exercised, Getech will acquire H2 Green for a total consideration of up to £1 million, with phased payments structured around satisfaction of key performance milestones and with a material equity component to ensure alignment between H2 Green management and Getech shareholders.
Furthermore, Getech signed the Memorandum of Understanding with H2 Green and SGN Commercial Services, part of the SGN Group, one of the UK’s largest gas network operators.
Through this agreement, the groups will together explore the potential of regenerating sites across Scotland and the south of England to create green hydrogen hubs. These hubs would facilitate green hydrogen generation, storage and retail, providing access to a cleaner and greener alternative to diesel for buses and HGVs. In a UK first, the parties are also exploring the feasibility for green hydrogen, which would be produced on site, to be stored in redundant gas holders.
With the SGN Group’s extensive portfolio covering Scotland and the south of England, converting these sites would open a vast network of supply to hydrogen customers, such as hydrogen-powered HGV and bus operators, easing fleet operator range anxiety and lowering cost.
An initial focus list of 30 potential hydrogen hub locations has been agreed, and the companies will now work in collaboration to progress detailed technical and commercial diligence.
The exclusive MoU provides a path for the SGN Group to invest in any developments that result from this collaboration, affording both H2 Green and SGN scalable exposure to a high-value network opportunity in an exciting growth market.
