Motorway nodes or local hubs?

This blog post has been inspired by the thoughtful input from the Riversimple Design Forum on the topic of refuelling. Having received a plethora of comments and queries from all over the UK and Europe we thought the question of hydrogen infrastructure, often cited as the main barrier to the uptake of hydrogen vehicles, deserved a Riversimple explanation.

First, some context; there are currently 17 active hydrogen refuellers in the UK with a further 5 in the immediate pipeline. Behind these projects are a mixture of universities, manufacturers and fuel providers. Most new projects are being built along motorways and trunk roads with the aim of linking towns and cities together, supporting intercity driving and, by default, longer journeys. As if to prove the point, Toyota drove one of its Mirais the length of the country refuelling at 4 different locations. Great. There is undoubtedly a need for these types of journeys, whether a UK based holiday or a job that requires a lot of driving, but with the average car journey lasting only 22 minutes (DfT, 2017) the majority of journeys are not catered for in this model.

While any additional hydrogen refueller is wholeheartedly welcomed, we believe that the key to eliminating the environmental impact of personal transport is closer to home, providing for the 94% of all journeys that are under 25 miles. When asking our Design Forum their refuelling habits, 79% said that they timed refuelling with other regular activities such as shopping or commuting and 70% used the same one or two stations. In contrast only 1% of people reported refuelling at motorways ‘often’ whereas 86% of people said they would ‘never’ refuel at a motorway or ‘only if they had to’.

One of the benefits of a hydrogen electric vehicle such as the Rasa is that it can be refuelled in the same way as a conventional petrol or diesel car.  Just a simple pump on a forecourt, hydrogen refuellers have the opportunity to be located in familiar locations such as supermarket car parks and local service stations. Our data shows that convenience is king and convenience means local; local to your home, your work or your supermarket. A 300 mile range means that you only need a reason to come into town once a week or so and  you’re sorted – in fact, with the Rasa you fill up and drive away without paying!

We have installed the 17th hydrogen refueller in the UK (2nd in Wales). We chose the location in Abergavenny because it is located in the town’s main car park, next to the bus station and a short walk from the train station. It is in the middle of the town which offers a weekly market and a well stocked high street (yes, they still exist), a supermarket and theatre. Most of the people participating in the Riversimple Clean Mobility trial already pass within 5 miles of the refueller weekly, if not daily.

We believe that this model of smaller units based in local communities offers a solution to the chicken and egg problem – which has to come first, cars or filling stations? The motorway pumps will hardly ever see a car (there are currently only 93 hydrogen cars on the roads in the UK), whereas the Riversimple pump will have a captive fleet of 20 vehicles all refuelling approximately once a week. Let’s see the new filling stations being supported by the government going into the heart of the community and build up a nationwide network of vehicles and filling stations hand in hand.

If you would like to join the Riversimple Design forum and be part of the discussion then please register HERE

Hugo Spowers was invited to address the 2018 annual conference of the European Investment Bank on 28^th November

Good afternoon. I am Hugo Spowers, from Riversimple and I used to be an engineer designing racing cars but for the last 18 years I have been developing hydrogen fuel cell vehicle technology and, more importantly, the strategies and business models necessary for bringing them to market in a truly sustainable manner.

The key barriers are not technical but to do with people, politics and business inertia. I, or we, have been doing this independently because it is such a step change that it is much easier to do from a clean sheet of paper than trying to shoehorn hydrogen technology into a vehicle architecture, a manufacturing model, a distribution model and a culture that has been shaped by combustion engines.

And this step change goes beyond cars. We’re going through an industrial revolution and it is only possible because of the power of digital.

Technology deployment is mainly driven by those who stand to make money from it and nobody ever made money from NOT doing something. For instance, we are resigned to the inevitability of autonomous vehicles but nobody is really asking how they should be deployed appropriately – to maximise the benefit to society rather than short term profit – despite numerous potential negative unintended consequences. Technology is never bad in itself – it’s how we deploy it and we don’t have a great track record. In 1973, the Chief Economist of the UK’s National Coal Board – EF Schumacher – made a cautionary observation that “A society’s leisure time is inversely proportional to the amount of labour saving technology it employs.” We need a wisdom filter for the application of technology.

And transformation is not just about technology; the scale of transformation we are facing is utterly dependent on new systems and business models and these will have impacts as profound as the new technologies themselves. Business models, like living systems, are shaped by the constraints within which they operate. The business models of yesteryear treat natural capital as infinite, an understandable assumption when we were but a pinprick on the side of the planet, but the key drivers of today – climate change, energy security and peak resource issues – were simply not on the radar when these models evolved. We HAVE to take a bold, long view – because less unsustainable is still not sustainable – and it is much easier to design new business models to suit these conditions than to try to tweak business models that were designed to do something fundamentally different.

Because of these constraints, we are moving from a linear economy dominated by the sale of product, that directly rewards the maximisation of resource consumption, to a circular economy that rewards resource conservation. Or at least I hope we are, because I don’t see how we can ever have a sustainable industrial society based on rewarding industry for the opposite of what we are trying to achieve.

I am going to explain our model, the circular value network that we are building at Riversimple.

This is our first low volume production model, to be provided to customers under a sale of service contract that covers all costs, including insurance and fuel.

In the car is a fuel cell from a fuel cell manufacturer; in the fuel cell are Membrane Electrode Assemblies, or MEAs;

and on the membranes is platinum.

In our model, all these components stay on these respective balance sheets whilst the customer has the car.

The customer pays Riversimple a monthly direct debit with a fixed monthly base rate and a mileage rate – it is the only transaction involved in having the ‘usership’ of a car. We don’t buy the fuel cell – we pay for installed kilowatt hours of electricity. We are in discussion with two fuel cell manufacturers and it’s a complex transaction with multiple elements, such as a monthly inventory charge, a charge for the hours of running time as this degrades the fuel cell, and a payment for the efficiency with which our hydrogen is converted into electricity.

In turn, the fuel cell manufacturer doesn’t buy the MEA but pays on a similar contractual basis, as the membrane is where the degradation happens; in discussion with one supplier about this, their technical director immediately suggested that they would increase the platinum loading because that improves efficiency and they know they will get it all back – an example of how profoundly the business model affects the product design.

And in this model, they would not even buy the platinum, but lease it from a mining company, and at least one mining company has expressed interest in this model. There are obvious environmental and social benefits if a mining company can decouple its revenue from new raw material inputs.

The fuel cell is only a fraction of the whole. To enable these various levels of selling service, there are multiple payment calculations for each component in each car. Just last week, I was in Copenhagen working on a project funded by the EU’s Climate-KIC programme with Denmark Technical University and a tyre company on the micro contractual elements of paying for tyres by the mile and the impact that has on the design of the tyre and its environmental performance.

For a large fleet of cars, this is a mind-boggling number of calculations and it’s ONLY possible through the power of blockchain to automate trust and deliver a frictionless solution to enable a truly circular economy.

The two key features that maximise the competitive advantage of this model are a) that the asset is retained on the same balance sheet from a clean sheet of paper to End of Life and b) that all operating costs are internalised. And there are many benefits, but I will just pick out 4.

First is the alignment of interests

–           It puts everyone on the same side of the fence, including customers – if a supplier sells a component, their financial driver is the highest acceptable price and the shortest acceptable life whereas in this model, all parties have a shared interest in the cheapest way of providing a mobility service to customers for the life of the car.

–           This creates an ecosystem of cooperation and is a much stronger foundation for a collaborative working relationship.

Second is the driver towards quality

–           If selling a product, another major interest is the lowest possible cost, a structural driver towards low quality and shorter life – think no further than modern fridges.

–           When selling the service of a component or a car, a higher quality, longer lasting component, at a marginally higher cost will generate revenue for a much longer time, so it is more profitable at the same price to the customer – a structural tendency towards high quality.

Third, it makes efficiency profitable

–           It costs more to make a more efficient car but, if you sell cars, customers will never pay a premium, so it just reduces margin.

–           However, if selling the service of the car, we the manufacturer pay for the fuel for the life of the car which justifies investing in efficiency – because we reap the benefit.

Finally, it lowers the economic barriers to bringing new Low Carbon technology to market

–           In this model, being competitive is not dependent on the build cost of the car, but the lifetime cost.

–           The paradox is that by internalising all associated costs, we benefit from lower operating costs, end of life value recovery and much longer revenue streams, all of which offset the higher build cost and eliminate the entry barriers faced by new, low carbon but low volume technologies.

The transformation that I am describing here is a system level change but our culture, our businesses and our institutions are not attuned to system level change. Culturally, we regard it as prudent to change one thing at a time.

When any radically new idea is proposed, all the conversation goes straight to the reason why it can’t be done – and these reasons are generally true, but they assume that the context remains the same. The old idea co-evolved with a network of relationships and it is these connections that are the reasons why ‘It won’t work’!

If instead, we are prepared to start afresh and co-develop a new pattern of relationships, all those reasons disappear and the new idea can suddenly look much more attractive – starting again from a clean sheet of paper lowers both risks and barriers.

When there is a step change in external conditions, a new solution always emerges from a surprising quarter – not an evolution of the old solution – dinosaurs were not replaced by better dinosaurs. Climate change and peak resources, in a world with growth both in population and affluence, are presenting us with just such a step change in external conditions. Incremental solutions cannot solve these problems – You can’t cross a chasm in 2 leaps.

We all KNOW that we need radical solutions -the word on everybody’s lips, the thing everybody is seeking is Innovation – but from the perspective of one proposing such radical solutions, the resistance is overwhelming.

Our cultural leaning towards incrementalism, being prudent, obviously extends to our businesses, to investment and to our institutions, so they are not well suited to recognising innovation or fostering system level change. If we think in terms of a Bell curve, the really interesting innovations are at the edges of the Bell curve.

Understandably, for reasons of accountability and transparency, independent assessment is required for allocation of support but these independent experts are drawn from the incumbent industry. There is no conspiracy in what then happens; the experts tend to be very capable and to understand their industry and its constraints very clearly. However, from within their industry, their own constraints are seen as absolute and they simply cannot take off those blinkers and see the possibilities that exist if their constraints are lifted. The result is that the bulk of support goes towards incremental solutions.

Which brings me back to productivity and harnessing technology innovation. We need to challenge the bias towards incrementalism if we are to match the agility of China and other Asian countries. The devil may be in the detail, but God is in the system and we need to embrace new patterns of relationship.

Thank you.

We had the privilege of meeting Claire Perry on Thursday at Cardiff University and she loved the Rasa – the innovation in it, its efficiency, the fun it offers.  She was there to mark the first Green GB week, led by the Government and UK R&I, with the aim of engaging the British public on the importance of tackling climate change and ensuring clean growth.

While it would appear perfect timing for us – the first Rasa Beta is rolling off the production line here in Powys, Wales – we cannot overlook the irony that this week a whole new fossil fuel industry has lurched into life with the blessing of this government, just days after the Intergovernmental Panel on Climate Change (IPCC) issued their sobering report on the global climate situation.  Addiction is always hard to break but, if we are addicted to fossil fuels, fracking really is trawling for the dregs, analogous to the stereotype of tramps drinking methylated spirits!

It is causing us some cognitive dissonance.  How can we believe in the government’s sincerity about championing Clean Growth while they are supporting the opposite?

Less unsustainable is still not sustainable

This week Cuadrilla started fracking for shale gas.  The UK Government are stating that shale gas has the potential to provide the UK with greater energy security, economic growth and jobs, and could be an important part of our transition to a low carbon future.  Literally undermining our national parks is hardly a bridge to a low carbon economy – it’s a very circuitous route at best. Any distraction from the real work of getting our renewable energy sector off the ground is very shortsighted – why not take the high road and invest directly in renewable energy?

Divesting and investing

Last month the Mayors of London and New York made a public appeal for cities to divest from fossil fuels.  In a joint statement they said, “We believe we can demonstrate to the world that divestment is a powerful tool and a prudent use of resources.  And that, together, our cities – New York, London and many others around the world – can send a clear message to the fossil fuel industry: change your ways now and join us in tackling climate change.”

Scottish Power announced their own divestment this week – that they are turning to 100% wind power shows what can be done.

Our refueller installed in Abergavenny

We are often asked where the hydrogen for our cars comes from.  Right now, hydrogen is reformed from natural gas for a large number of industrial processes; it is also a byproduct of many.  While it’s more efficient to generate hydrogen than electricity from natural gas (70% rather than 49% – p.147, DUKES 2018), and we are making the most of any hydrogen we use – you can go 200 miles on a kilo of hydrogen in a Rasa,  as opposed to 66 miles in a Toyota Mirai – we are looking forward to plentiful green sources of hydrogen.  Electrolysis from green electricity, photo catalysis, waste from methane-eating bacteria … bring them on!

Now that would be something to invest in, Minister!

Air pollution concerns have really brought the need for clean cars to the fore. Now that combustion-engined vehicles have a ‘Sell By’ date of 2040, there is much greater focus on practical and viable alternatives and the question of scale is surfacing. What are the 34 million cars in the UK alone going to be replaced with?

On one level, this is clearly an opportunity to lower the total number of cars in circulation and move to more shared vehicle usage, especially in cities where owning a car is becoming ever more onerous.

But what will the cars of the future be running on?  Whilst battery electric cars will have a part to play, large-scale adoption is likely to be stymied by the ~50% of UK customers who do not have easy access to overnight charging.

Shell/ITM hydrogen station, Cobham Surrey

Each publicly accessible battery charger only supports a handful of cars. A hydrogen refueller, on the other hand, can be placed on an existing forecourt and, like a petrol station, support thousands of cars. Per car served they are massively cheaper, so at scale, hydrogen infrastructure is more economical.

Senior automotive executives share our perspective on the potential for hydrogen cars, according to KPMG, and a recently highlighted industry shift towards fuel cell investment has seen Honda, Toyota, Hyundai, General Motors, Mercedes-Benz, BMW and Nikola One refocus on hydrogen-powered models, which has put the spotlight on our engineering approach in this time of critical change for the auto-industry.

Riversimple remains ahead of the pack with the lightest, most efficient fuel cell car – which, incidentally, also makes it the cleanest. No emissions except pure water and a fraction of the particulates of other cars (thanks to skinny tyres, low weight and electrical braking).

We are now embarking on our next crowdfunding round. Our focus is on Beta testing the car and service with the public and the funding will get the Rasa into Beta series production.

Thank you to the hundreds of people who responded to our plea for Beta test drivers. We hope to engage with as many of you as possible in refining design and service features, even if  you are too far from Monmouthshire to be a driver.  .

We have been to a wonderful series of summer events, from grassroots festivals to art exhibitions to internationally-renowned extravaganzas attracting crowds of over 250,000. Whatever the audience, people are impressed by the Rasa’s sophisticated, ultra-efficient design and our game-changing business model. We remain the only car-maker to adopt a circular economy, and we are sticking firmly to our fundamental aim of making the car accessible to the many, not the few.

Our first event of the season was the Clean Air Roadshow in Swansea in April, organised by Swansea City Council. The Rasa sat in Castle Square beside two Hyundai FCEV cars owned by Swansea Fire Service – what greater endorsement of hydrogen cars could there be?

At the Hay Festival we discussed sustainable transport with the Festival’s Andy Fryers. The Times also covered our observations about the heated debate between EV owners and FCEV supporters.

The Rasa held its own for a week as a work of art among the Supercars including a McLaren P1 as part of the stunning Art in Motion exhibition at Messum’s Gallery in Wiltshire.

And then the car was honoured to be a key feature in the RHS’s ‘Garden for Changing Climate’ at the Chatsworth Flower Show.  Designed by the University of Sheffield to highlight their report for the RHS on the impact of climate change, the garden itself featured wild flower lawn along with orange and olive trees.

Built by landscape experts Killingley, it was also full of clever ideas to illustrate how to manage future water needs and reuse materials. Changing climate being the theme – the first day of the event was cancelled due to gales and heavy rain!

Most recently, we have been in Abergavenny to promote our forthcoming Beta Test of 20 Rasas, starting at the end of the year. We have begun to compile a list of triallists in and around Abergavenny; if you are interested in participating, please click here for more information.

As our first crowdfunding closed at midnight on Sunday 9th April, we were thrilled to have reached over £1,138,000. A huge thank you to all those who have pledged to join the Riversimple crowd on this exciting and important journey towards clean and efficient cars. You have not only invested in the Rasa but also into an entirely new business model. The next generation of zero emission vehicles requires the next generation of business models. We are building the riversimple business to be circular and sustainable. We are looking to partner with the UK’s leading business schools to enable the implementation of circularity and sustainable practices into Riversimple.

Photographer: Anthony Dawton

In the meantime, we have fitted a new back end to the Rasa made of bio carbon, with layers of flax woven into it.

Inspired by nature in so many ways, the car has butterfly  doors and  now a ‘whale fluke’ boot, which will comfortably take a set of golf clubs or, if it is more to your taste, two cabin bags and a case of wine.

And that is good news as we definitely have occasion to celebrate! The entire team in LLandrindod Wells is in very high spirits. Thank you all.