Season 4, Episode 142 : Duncan Kerr and Luke Read

Will Richardson 00:04
Welcome to the Green Element podcast where we meet business leaders and innovators transforming their operations to be more environmentally and socially sustainable, and in the process help you on your journey of sustainability. I'm your host, Will Richardson. Today we are speaking with Duncan Kerr, the CEO of Aeristech and Luke Read, the Head of Research and development. Aeristech is a multi-award winning engineering company who deliver high tech projects relating to hydrogen fuel cells, and market hybrid turbo technology systems for motor vehicles. Duncan Luke, welcome. Thank you very much, Will. It's great to have you here. Now, if I may, I'd like to start by asking you both about your journey, and how you came to work in this industry?

Duncan Kerr 00:51
Well, I was working at a venture capital firm called Midven in 2010 and I made the first venture capital investment in Aeristech. As a fund manager, I left Midven in 2015, consulted for a while and then I was asked to join the board and a full-time capacity in 2018. So I've gone through the whole journey over those getting to 11 years now.

Will Richardson 01:20
Brilliant. And what about you, Luke?

Luke Read 01:22
I actually started off in the Ministry of Defense, and after doing my graduate scheme, and staying there for a bit, I felt that I wanted to get a bit more out of my engineering career and then started looking for a company. Ideally, in an industrial estate, doing a bit more hands on engineering, and a bit more analysis, and then I found out about Aeristech and I was quite interested in what they were doing. And that was about 2011, and I've been there ever since.

Will Richardson 01:50
Brilliant. In a nutshell, what does Aeristech do? I know that I did a really bad job of introducing you at the beginning. But could you kind of help me and our guests know what you do?

Duncan Kerr 02:04
Well, it might help to have a bit of history. So the reason why the company was founded was to reduce emissions of internal combustion engines. And the vision of the founder was to split a turbocharger into a turbine that generated an electricity storage device, and an electric supercharger. And by splitting the functions of a turbo charger, you could fill in the turbo lag at low engine speed. And what emerged out of that was an invention of a way of controlling motors to spin them very fast, very efficiently. And after 'Dieselgate', when the whole world changed, and due to electrification, that application wasn't adopted as much as we all hoped. But then around 2, 3, 4 years ago, there were loads of inquiries coming from hydrogen fuel cells. And our technology is ideally suited there, because of its efficiency and some other properties.

Will Richardson 03:09
Luke and I were talking almost in layman's terms, what it is that you're doing. And in a normal combustion engine, in a vehicle, you have oxygen that is fed into the fire in order to boost that engine and that's the turbo, isn't it? In a normal petrol engine, which you're doing, but in a different capacity. That's what the turbo charging you're talking about is, it's introducing oxygen into the hydrogen to make it burn more efficiently.

Duncan Kerr 03:49
Well, it's it's not quite burning, it's a chemical reaction that results in generating electricity adds a reaction between hydrogen and oxygen. And our compressors are used to pump in their oxygen to increase the power density of the fuel cell. Otherwise, you've only got oxygen coming in at atmospheric pressure. So we increase the pressure of the oxygen so that you can have more reaction between the oxygen and the hydrogen. And it's similar to a combustion engine where you do have combustion, where you need to have the correct fuel and oxygen mix to have ideal combustion. One of the problems at low engine speeds when turbo charges are not active because there's not enough waste energy is that the fuel is not fully burnt. And that's why, you know, you must have seen on the motorway when a diesel car starts accelerating, you get this big plume of black smoke coming out the back and that's because the fuel is not fully burned.

Will Richardson 04:53
So with regards to climate change, how will products at Aeristech help to deliver a sustainable future?

Luke Read 05:00
I think on that side, we are enabling technology that will allow hydrogen fuel cells to be more practical in a transport application.

Duncan Kerr 05:10
And the reason why we're special is that we [are] very efficient and the air compressor on hydrogen fuel cell is the biggest parasitic loss. And so if you are more efficient on the compressor, it means you use less hydrogen, you'd have increased range, and the whole system is more efficient.

Will Richardson 05:29
How long do you think it will be before we start to see hydrogen technology becoming mainstream? And in which industries do you think?

Duncan Kerr 05:39
I think in the short term in the next two to three years, it will be adopted in commercial vehicles, that's trucks, buses, delivery vans, in applications where you don't need a full fueling infrastructure everywhere like you do with cars and petrol stations, they're ubiquitous. But hydrogen stations are not yet. So the first adopters will be where you don't need a full network of refueling stations. So long-distance trucks, and also buses, because they always go back to the same base, you only need a filling station at the base. Similarly, for delivery vehicles and things like forklift trucks, which are just sitting in the same warehouse all day long. Later on, once the the fueling stations are put in place, then we'll see adoption in passenger vehicles. But it's all determined by the rollout of the refueling infrastructure,

Will Richardson 06:38
We are reading a lot about the different - I was gonna say different quality - [types] of hydrogen, ie blue, green, it makes no difference to you what type of hydrogen is being used, I'm assuming?

Duncan Kerr 06:52
No. And in fact, you can also use methanol as a source of hydrogen, which is not very green at all. But at least at the point of use, there are zero emissions, it doesn't matter what hydrogen you use. But if you want to have no emissions throughout the whole energy chain then you need to use green hydrogen.

Will Richardson 07:19
And, in your opinion, what does the future of travel look like? And what technology will we be using?

Duncan Kerr 07:26
I think we'll be using a combination of technologies for short range applications, possibly mainly battery, for passenger short range where there's an anxiety of running out of charge, for longer range would be hydrogen. I think that you know, diesel will be around for a bit longer. They're going to, you know, in off-highway applications where you need a lot of power, they're going to make it cleaner by reducing emissions there, we can play a part in that. And then for short range aviation, we also have hydrogen fuel cells playing a part. But I doubt you'd be flying from the UK to China, for example, on a hydrogen [plane] in any near future.

Will Richardson 08:18
Right. And is that because the capacity just wouldn't be enough capacity in the aeroplane in order to fuel it from here to China?

Duncan Kerr 08:26
I think so

Will Richardson 08:27
Because EasyJet have bought an electric plane company, haven't they? They're looking at rolling out electric only flights for short haul? Yeah, I think by 2025 is what they're saying.

Duncan Kerr 08:41
Well, we're partnered with Zero Avia on a government-funded grant project. And that's to power a propeller of an airplane 600 kilowatt with a hydrogen fuel cell power chain. And that will be for short passenger flights up to 14 passengers.

Will Richardson 08:59
Brilliant. I mean, to put it into perspective to the listener, what does that look like in CO2 emissions, compared to say, a normal passenger car? So if you're driving from here to Berlin, or flying from here to Berlin in that plane?

Duncan Kerr 09:17
I think if you were driving a hydrogen powered car or flying in a hydrogen powered airplane, they're both emission free

Will Richardson 09:26
I think that's really interesting what you've just said because you're basically saying that we potentially could fly short distances, emission free in the near future.

Duncan Kerr 09:38
Yeah, that's definitely the vision of ZeroAvia.

Luke Read 09:42
Well yeah, I guess, an interesting point by dunking there and expanding on what you've said. So if you were to, say, fly to Berlin in a hydrogen powered plane, compared to an internal combustion engine, then it does depend on how that hydrogen is formed and whether it was done using green technology. I guess, where the market is at the moment, that's still in development. But then if you were to compare it directly with a hydrogen car, because you could drive that distance and hydrogen car, I think air travel was would still be the greener way of doing it because it's a much more efficient way of moving more people, longer distances.

Will Richardson 10:26
And I'm thinking that the 14 passengers that you, Duncan said, would just increase as the technology increases, you end up with 100, 200, 300 people, which is what you'd want to be. It's not particularly feasible to have 14 people flying, you'd have an awful lot of planes flying around.

Duncan Kerr 10:49
The 14 is just for very regional, you know, hopping between islands sort of thing, not mainstream.

Luke Read 10:57
And it is small steps, especially with aerospace, it's a very safety conscious industry. And at least these steps need to be done first before you start moving up to the larger planes and maturing the technology gradually.

Will Richardson 11:12
And the uptake of people and organizations taking on your technology, what has been a barrier so far? You've been around since 2010. We're now in 2021. Why have we not been, you know, using you more? You'll probably ask the same question.

Duncan Kerr 11:34
I think that hydrogen has only come of age. And I can't explain exactly why it started being adopted sort of more aggressively from 2017, I think. I think it's mainly driven by governments saying that, you know, you've got to cut out petrol and diesel. And, you know, if you hear some academics, they say there aren't enough raw materials to make enough batteries for the UK, globally, to go straight over to fully battery electric vehicle. So I think that the global OEMs have realized that hydrogen is going to play a big part. And the tier ones who've approached us to use our technology have realized a lot of them that their whole businesses are going to collapse. Because if you move away from diesel, petrol, and you're a transmission company or a diesel engine company, your business is going to disappear if you don't do something. So they're all investing heavily into hydrogen.

Will Richardson 12:52
It's interesting, I've been working in this space for long enough [and] back in the early 2000s, Hydrogen was the panacea. Hydrogen then was very much more going to be changing transportation than electric vehicles. And I remember reading about the research and development it was coming out to China, because China works quite big into hydrogen, probably because then, you know, they could produce the electricity very cheaply in order to produce the hydrogen. Why do you think -

Duncan Kerr 13:34
It's interesting, you mentioned China, because Luke made a very good point when we were discussing it earlier and that's that our business - we had a real hiccup because we were getting most of our inquiries on hydrogen from China. And, in fact, we had to offers to buy the business. But then COVID hit and you can't really do business with China without face-to-face meetings because of the culture. So we were badly affected by that. And then we were almost rescued by the UK Government waking up and starting to put money into hydrogen. With a whole lot of grant funded projects, we won three of them towards the end of last year, two in aviation, one in commercial vehicles. And the other thing that changed in China last year is everything is policy driven and subsidy driven there and they changed the subsidy on hydrogen fuel cells to only support the larger fuel cell stacks. And at that stage, we were only able to support smaller fuel cell stacks. And so that cut away most of our business opportunities. So we really were pretty grateful to the UK Government for stepping in and supporting hydrogen towards the end of last year.

Will Richardson 14:47
We're going to be very much reliant on subsidies and grants, aren't we? With regards to this technology for, at least, the foreseeable future?

Duncan Kerr 15:15
I think so, you know, we're a small part of the grant with GKN aerospace but that whole program, I think - Luke, it's 54 million pounds, isn't it?

Luke Read 15:26
Yes, yeah, it's quite significant.

Duncan Kerr 15:28
And if companies the size of GKN aerospace are going to need government support, then you would have thought if anybody could fund it themselves, they could. But no, they are relying on government support. We are in another program with Cummins which the total program there is 20 million, and that's reliant on government support. And then ZeroAvia is actually a California based company, which came over to the UK because the UK is more advanced in subsidizing hydrogen projects.

Will Richardson 15:59
[laughs] And we've only just started doing it. That doesn't say much of the States.

Duncan Kerr 16:04
No [laughs]

Will Richardson 16:06
Reading between the lines there. What do you think the drivers behind the transition from fossil fuel to sustainable alternatives are? Is it cost-efficiency, sustainability, or a mixture of all of these elements?

Duncan Kerr 16:23
I think it's getting that increase in global temperatures so that we don't all drown in rising sea levels and it's global warming, I think driving the whole thing.

Will Richardson 16:38
Aerospace is known - oh sorry, Luke, did you want to

Luke Read 16:40
I was gonna say it's an interesting one because I think people are aware now of their effect on emissions and what can cause global temperatures. But at the same time, there is still a desire to own your own vehicle, to still go on holiday to faraway places. And if we don't, if we don't address those issues, people aren't just going to sit in their own town or village for the rest of their lives, people will still want to go out because it's human instinct to go and explore and now people are used to having their own cars. So I think if we would be realistic about it, and the technology needs to be developed so that people can carry on living the way they're perhaps used to, not to the same extent, but it's important to develop this technology so people can travel to faraway places, but with lower emissions and to end to try and reduce people's impact on the environment.

Will Richardson 17:32
Yeah, no, absolutely. We, as an organization, help companies and organizations become more sustainable. And so we do the carbon reporting for them but we get asked a lot: "well, you know, what about offsetting? What about this?" and we can't, it's not actually scientifically correct to be doing that. But why not? You're a travel company, if you're in the travel industry, you're a travel company, invest in the industry you're in, in order to lower your industries emissions, and that ties into exactly what you've just said, Luke, because from where we see it, if you are a very large travel company, and you are invested in trying to get people traveling, and you also know that you need to have them doing it sustainably, then investing in low carbon technologies is a kind of a no brainer, because the more we put money into these technologies, as people using them, then the faster we'll be able to get the tech. We can't just put our money into growing a tree that will take carbon out in 100 years, and hope that the aerospace industry will sort everything else out.

Luke Read 18:51
Yeah, exactly. Yeah, we need to try and stop the problem at the source.

Will Richardson 18:55
This is veering away from your field of expertise but how do you think we can do that from a communication point of view?

Duncan Kerr 19:03
Well, I think that these travel companies need to need to have campaigns to educate the end consumer of what's going on. And the other alternative which probably nobody likes is for governments to have a tax policy that that drives the right behavior. You know, if you're flying an aeroplane and you're using biofuels rather than fossil fuels, you should pay less tax, shouldn't you?

Will Richardson 19:39
I don't even pay any tax on your aviation fuel?

Duncan Kerr 19:41
No, I mean, on you know, landing charges and -

Will Richardson 19:46
Yeah, but you don't pay tax on aviation fuel. I mean, what is that about? [laughs] I was kind of agreeing with you. Aerospace is known for producing high levels of emissions, so it must be really exciting to see that Aeristech are expanding into that area. Is it just the aerospace and the transportation sector that you are working in? Or are you able to actually transition into other industries?

Duncan Kerr 20:21
We are and we've done some work in industrial compressors, for example, where they're after efficiency as well, and where a few percentage points of increase makes a difference to them. And that's in applications such as food processing, nuclear, and medical, where clean air is needed. And that's all about the cost of electricity running these compressors.

Will Richardson 20:54
And as an organization, how many people are there within your organization? Because you're across a number of different offices around the globe, aren't you?

Duncan Kerr 21:07
Small offices and we're growing very fast. I think we're at 52 now. We've got a number of vacancies, we find it quite difficult to recruit the necessary skill sets. There's quite a high demand, as you can expect, with the whole world electrifying in the world of transport. There's a high demand for power electronics skills so there's a shortage there. We have a few people in China. In other territories, we use agents who help us find business.

Will Richardson 21:48
How do you manage your carbon footprint?

Duncan Kerr 21:52
Well, that's something that we haven't actually come to address yet. It's been a focus on enabling decarbonisation of the industries we serve, we've still got to have a look at ourselves. We've been more in survival mode so that's something that when we are a bit more stable, we can address. But for example, it's pretty trivial, but we think we're putting LED lights to replace all of the lightings in the building that we're in Lemington. Luke is conscious of things in the design of our products as well [to] make them more sustainable.

Will Richardson 22:40
That's actually a really nice transition into product cycle analysis. Is that something that you put in the equation?

Luke Read 22:53
Very much so. So we see it's the two sides of it running the business where we're perhaps relatively early days in terms of looking back at ourselves and seeing what we can do better from a day to day running of the company, but then also down at the product design level, how can we design our products to make sure that they are sustainable and don't have any materials and then that cause a negative effect to the environment. When we're looking at these fuel cell compressors, there's quite a few elements of them that need quite high-tech materials such as permanent magnets, and the bearings that go into them can be quite exotic if we were to just use off the shelf items. So we spend a lot of time looking at those key areas and trying to work out how to remove the worst offenders in terms of materials. Things like dysprosium in our permanent magnets and hexavalent chrome which perhaps may have been more common a couple of years ago and is generally seen as what you use on the type of bearings we use. But we've gone out of our way to make sure that we can engineer those things out of our products.

Will Richardson 24:17
And that must be really hard because I think what we didn't touch on when we were talking about your technology is the RPM; the amount of times you can turn a motor. Normal people do it at six - was it 100 [or] 150? And then you do it at a 1000 RPM?

Luke Read 24:40
Well, there's lots of different types of motors out there. There were various speeds but most of them are out a couple of 1000 maybe a couple of 10s of 1000s of RPM. To make our centrifugal compressor compact and efficient for the transport sector, we need to spin it typically above 100,000 RPM and on top of that, because it's producing compressed air that needs to be fed into a hydrogen fuel cell, there must be no oil contamination in that air because that will poison the membrane that transfers the protons. So that really limits us to what we can use for bearing technology and pretty much leaves us with a type of bearing called an air bearing, which essentially is what it sounds like; we suspend the shaft on the cushion of air using various aerodynamic principles. The problem comes when you bring that to a stop, it has to touchdown at some point, and then you need some sort of coating on the shaft to be able to resist that touchdown. And traditionally, I say traditionally, I mean in the recent past, that has been sort of hard dense chrome, where some sort of hex value in chrome would be used in the process. And one of our latest developments is to make sure we can engineer that out of the product, and at the end of it end up with a higher-performing product, which is still cost-competitive, because we are dealing with the transport sector. And the cost is always an issue.

Will Richardson 26:13
So interesting.

Duncan Kerr 26:14
And I think we haven't touched anything in detail on our key IP advantage and that's in our controllers, which switch at a 10th of the rate of our competitors. So that enables us to go up to these high speeds while remaining efficient and not overheating. And to the environmental point as well, we actually use fewer semiconductors to do it as well.

Will Richardson 26:44
What does that mean? The controllers? [Laughs] Sorry.

Duncan Kerr 26:49
Well the controller is the electronics that sends the current to the motor to turn it around. Typically there are switches in these controllers that are switching current on and off and the way that we control our motors, we're switching them at a 10th of the rate of our competitors.

Will Richardson 27:16
So it's kind of like brain capacity, the brains being used less to do more.

Duncan Kerr 27:22
That's quite a good way of putting it.

Will Richardson 27:24
I'm just putting it in simple terms [laughs] Thank you so much for today. It's been really, really interesting listening to you and what you're doing, I'm certainly going to be eagerly watching your organization and how you're helping us and the whole world move to a more green future. Thank you for joining us.

Duncan Kerr 27:52
Thank you very much, Will.

Luke Read 27:54
Thank you.

Will Richardson 27:55
And thanks for listening to the Sustainable Business podcast. If you enjoyed today's content, why not join our post-podcast discussion in our online community at sustainabilitysolved.org. We will be sharing ideas and collaborating on technology and sustainability with our members. Join now and find a space to collaborate with like-minded professionals learn more about sustainable business and inspire others to become more environmental. We also have an important update for our listeners. We'll be changing the name of this podcast to Sustainability Solved to better reflect the content of our podcast. You will still be able to access all our original podcasts on your preferred platform. And if you do enjoy this podcast, please make sure you subscribe so you can get every episode, and don't forget to follow Green Element on LinkedIn, Twitter, and Instagram.