According to the International Energy Agency (IEA), the building sector today stands for 30% of total final energy consumption, 50% of the total global energy demand and 40% of the global CO2 emissions. The demand within this sector could increase by 30% until 2060 if nothing is done. At the same time the UN's Intergovernmental Panel on Climate Change (IPCC) released a report in October this year stating the damages to the ecosystem a 1.5C & 2.0C increase of the global average temperature would cause, and the results are very terrifying. Simply put, many regions would be rendered uninhabitable for both animals and humans.
At the same time we have centralized energy production connected to cities and household via massive grids. These grids are very sensitive to disturbances such as storms and also have a limited power capacity. To meet the demand from urbanisation, massive investments would be required.
Energy shortage is not only an issue of the developing world. Sydsvenskan published an article where E.ON warns for a power crisis in Skåne. In a follow-up article in December, it is stated that big projects around Skåne will in total require 94 MW increased capacity the next couple of years. That combined with current deficit and an increasing population has led to increased electricity costs. E.On is currently spending 3.5Bn SEK/yr to modernize the existing grid but new infrastructure that is able to meet demand won’t be possible until 2027 according to Svenska Kraftnät.
The general approach of Hydromesh is to use local renewable energy sources such as solar and wind to generate energy. An AI with a holistic approach use forecasts and historical data to predict the optimal energy distribution within the system. The smart grid then gets this information and distributes the generated energy into four branches. Either direct consumption to meet current demand, to batteries for short-term storage, to power electrolysis to convert the energy into hydrogen for long-term storage, or selling.
Whenever the demand is higher than what the renewables can provide, the AI predicts the optimal way to use the stored energy. The smart grid then either converts the stored energy or buys from the grid if necessary.
Studies have shown that using hydrogen to act as seasonal or longer-term storage can drastically reduce the energy needed from the grid. By combining this with a smart-grid and an AI we aim to allow buildings to reach Near Net Zero Energy or ideally prosumer status.
Hydromesh is separated into different tiers. Tier 0 is a system for single households. Tier 1 connects multiple tier 0 systems together in a community-wide smart-grid to allow for a sharing economy and to further utilize renewables within the community. Tier 2 connects multiple tier 1 systems into a group of communities with the same intentions as before. And so on. This will decentralize the energy production and increase the efficiency and flexibility of the available energy.
Due to Hydromesh's unique modular system, we are able to target several target markets and demographics at the same time. Generally, we are aiming to work with people, who inhabit the mindset of being environmentally conscious, long-term thinkers and open-mindedness.
Hydromesh targets currently segments from B2C and B2B. Our tier 0 system aims mainly one household ideally a young family aged 25-40 with kids or without living in a house. The family lives in a house that requires a lot of energy. Knowing the issue of dirty energy and CO2 Emissions, the family wants to invest in own renewable energy production, resulting in covering their yearly energy need with their own production and in best case scenario earn money with their excess energy. With like-minded households, it is possible to create a tier 1 system that connects all household together and create a shared-economy.
Tier 1 and biggers systems are targeted mostly for companies such as housing associations, constructions industry, productions facilities, and office buildings. All of those areas are within B2B. Hydromesh targets mainly companies that have a sustainability strategy in place and want to invest accordingly in it. For example, a production facility needs a lot of energy to produce its products, within their sustainability goals our solution can help to meet their energy demand while reducing CO2 Emissions, creating a WIN-WIN situation for the producers and environment.
Another segment that Hydromesh aims for is the energy producers itself. For example, a wind farm that produces currently energy sells it directly to the grid, which might be not ideal for them at that time due to low prices. After discussion with wind farm owner, we realized that there is a need for storage systems and an AI that decides when to store and sell at the perfect time.
Lastly, any kind of area or community that is off-grid can utilize our system to produce electricity, e.g. an off-grid island in Indonesia that is in dire need for electricity and is currently using a dirty and unreliable diesel generator can implement a basic version of Hydromesh with the help of government funding. Helping them to meet their energy demand of the island or community.
Our business model
Hydromesh is a first of its kind smart-grid solution that integrate long-term storage of energy in the form of hydrogen, a CHP system and advanced AI with machine learning to predict the optimal use of locally generated energy from renewables to allow the users to become in best case scenario energy prosumers. Hydromesh will create a flexible, efficient and carbon-neutral energy network based on local renewable and thus contribute to lowering emissions connected to energy generation while at the same time building the infrastructure for a sharing economy around energy and hydrogen fuel.
We have identified currently 4 revenue streams that can be tapped into by Hydromesh. Firstly and the most basic revenue stream is the monthly subscription fee paid per user for our AI software. Additionally, with collected data over time, we will be able to create valuable data packages, which can be sold to interested B2B customers.
Another revenue stream is that we aim to allocate depending on the size of the project 5 -10 % of the budget, this is necessary due to the fact that we design and oversee each project which causes costs and requires resources. Lastly, Hydromesh will act as an umbrella company for each sale done by the customer of their excess energy, meaning any sales made by customers in any kind of form to third parties, requires a low percentage fee paid to Hydromesh.
From a consumer perspective, a normal smart grid provides obvious benefits. Firstly, saving money. By using advanced metering and software it can provide a tailored demand response program. The mere knowledge of your consumption and the current electricity price will on average reduce the total electricity bill by 10% and the usage of expensive peak-time electricity by 15 %. By including an AI in the smart-grid we estimate that one can reduce the electricity bill by an additional 25-33%
Secondly, depending on the set-up we estimate that ideally, Hydromesh can achieve a prosumer status. This means that excess energy can be used to generate additional income for the user by selling hydrogen or electricity and thus speeding up the estimated ROI from 5-10 years to 3-8 years. Producing your own energy or fuel also leads to less dependency on foreign oil, leading to less oil used for transport, ergo less emissions from the transport sector. Data shows that the diesel costs have increased by 54 euro cents due to oil prices, between 2000 - 2018. This trend will likely continue over the coming years which means that by producing your own hydrogen or electricity to fuel your car will save you additional money in the long run.
Reduced emissions from the energy sector since the energy comes from local renewables.
Enables an economy of sharing
Increased control of your consumption and production
Increased convenience of fueling your hydrogen or electric car
By May 2019 we want a first test version of the software as well as a list of hardware that we wish to further pursue ready. By September 2019 we aim to test run the system in a proof of concept to show that we can deliver the promises and based on the results from this test take actions to improve the whole system further. By December 2020 we want to have implemented a first version of Hydromesh into a small pilot project (One demo plant).
The implementation procedure for Hydromesh looks as following; Firstly, evaluating and choosing appropriate contractors and partners for hardware such as solar, wind, fuel cell etc.Then we will utilize partners such as:
DTU Risø Campus in Denmark, for testing of the software in real conditions.
Lund University, with whom we are talking to make parts of Hydromesh into a research project for academic studies. We are also in contact with the Innovation Department to gain access to important networks and the facilitating of the pilot project.
We aiming to pitch for Helsingborg stad to use them as a test platform for our pilot project.
To make sure we comply with the regulation, we have been talking with Energimarknadsinspektionen.
Once we have the first test version of our system we are planning to participate in events such as PCIM Europe, VIND 2019 and Svenska Solelmässan, as these reflects an important networking opportunity for us.