There has been a lot of innovation lately in the decarbonization space but we recently came across something different. Sapphire Technologies’ turboexpander technology converts energy wasted in pressure reduction processes, increasing efficiency and leading to less carbon emissions.
We spoke with Jeff Earl, the company’s Business Development Manager. Jeff holds an M.B.A and a B.E. in Chemical Engineering from Stevens Institute of Technology in Hoboken, New Jersey and is also the author of several technical papers and patents related to turbomachinery concepts.
We asked him about the company’s proprietary turboexpander technology, its application in the already established natural gas industry, as well as the prospects for working with the growing hydrogen industry.
Can you tell us how Sapphire Technologies came to be, its history and the main people behind its technology and expertise?
Sapphire Technologies is a mission-driven organization with the goal of building a more sustainable world. We are on a mission to drive global decarbonization and improve the way the world harvests and utilizes energy.
Sapphire Technologies was born from a team of world renowned cleantech specialists who saw an untapped opportunity to recover energy lost in gas pressure reduction processes in the oil and gas industry. In 2019, a 300 kW turboexpander-generator was successfully developed by some of Sapphire Technologies’ founders for use in a natural gas pressure letdown application.
In the fall of 2021, Sapphire Technologies closed its Series A funding round with investment backing from Equinor Ventures and Chevron Technology Ventures to help accelerate the commercialization of the FreeSpin™ In-line Turboexpander (FIT).
How does the company’s pressure energy recovery system work?
The FIT uses advanced magnetic technologies to efficiently capture the energy lost in pressure reduction. These turboexpander-generators extract kinetic energy from natural gas as it moves through the natural gas transmission network, enabling the generation of clean electricity with no added pollution.
High-pressure gas flows into the FIT and expands through a turbine wheel, spinning a generator and producing electric power. Sapphire’s system operates on magnetic bearing technology to provide frictionless, oil-free and low maintenance operation.
Each FIT system can produce as much as 300kW of clean power and is compatible with a variety of process temperatures, pressures and gases, including natural gas, carbon dioxide, and hydrogen.
Can you tell us what the company’s addressable market is, both in terms of company types but also geographically?
The global turboexpander market size was valued at $953.6 million in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 4.8% from 2022 to 2030. The increasing demand for natural gas by the industrial and residential sectors and the growing preference for active magnetic bearings (AMB) over oil-bearing turboexpanders are some of the factors supporting the growth of the market.
Additionally, as pressure continues to increase to curb greenhouse gas (GHG) emissions and as government incentive programs continue to roll out, we expect the total turboexpander market to continue growing.
Sapphire Technologies’ FreeSpin In-line Turboexpander can be used in a variety of energy recovery applications in different markets including liquified natural gas (LNG) regasification, natural gas midstream and upstream sectors, and throughout the hydrogen economy. Our technology can also be leveraged by pipeline operators around the world.
Where do you think the strongest potential for revenue and growth is? Is it with the mature natural gas industry or potentially with hydrogen, which is likely to grow rapidly in the coming years?
In the short term, growth will come from the natural gas industry as many of these companies are making strong environmental commitments that will require innovative clean energy technologies like Sapphire’s FIT. This provides Sapphire Technologies access to a motivated, large market; there are millions of miles of pipelines running throughout the world.
Our prior experience in natural gas applications has created a reproducible project structure and confirmed our reputation in energy recovery. This will lead to accelerated growth as late technology adopters in the natural gas industry integrate turboexpanders into their assets.
Hydrogen applications provide a complimentary revenue opportunity for Sapphire Technologies which will grow in pace with the overall hydrogen economy. We believe that our technology will be adopted by the hydrogen economy in the same way that it is being rolled out in the natural gas industry.
When pipeline companies begin blending larger percentages of hydrogen into the pipeline network, our product will continue to offer a way to generate clean energy from waste pressure. In a future hydrogen economy, our same value proposition holds: gas will be moved throughout the country based on pressure differential, and our turboexpander will still be used to recover wasted energy.
Are there already examples of successful installations of the FreeSpin® In-line Turboexpander Generator or is that coming at some point in the future?
Sapphire Technologies partnered with TB Global Technologies Ltd. to install first-of-kind FreeSpin® In-line Turboexpanders at an LNG import terminal in Japan, generating electricity using waste energy from natural gas pressure letdown process. The systems are designed to generate a combined 3.7 GWh of clean energy each year and offset 2,800 tons of carbon dioxide equivalent (CO2e) annually.
We have also partnered with Tallgrass Energy, a leading US energy infrastructure company, and Evolve Energy, a leading clean energy project developer, to pursue the world’s largest turboexpander installation — 72 turboexpander systems over the next three years. Once completed, the systems will generate 187 GWh of clean energy each year and offset 144,000 tons of CO2e annually.
Can you give us some more details about the investment from Chevron and Equinor and the relationship with those companies?
Chevron and Equinor are two of the world’s leading oil and gas companies. We feel fortunate to have them as our trusted partners. They both believe in the importance of innovation to reduce carbon emissions now and into the future. Our partnership strengthens our commitment to scale our reduced emissions solutions to build a more sustainable world.
What’s in the pipeline for the company in 2023?
We recently partnered with Sustain SoCal to help advance cleantech technologies in our home state, and with the Heat is Power (HiP) Association to educate US industry and policymakers about our turboexpander technology. These partnerships are an example of how we continue to influence the industry and encourage new methods to reduce GHG emissions.
What are your thoughts on the Inflation Reduction Act and how is Sapphire Technologies benefiting from it (both at its current rates, as well as after the proposed increase of the 45Q credit)?
The IRA is the biggest step the US has taken to fight climate change since the 2015 Paris Agreement. There are many overarching benefits of the IRA, such as the idea of creating a thriving economic environment for businesses which will allow for innovation and new technologies. The tax incentives the bill provides are enticing for consumers to invest in clean technologies like electric vehicles.
At Sapphire Technologies, we currently do not offer a solution for carbon capture and storage. With that said, the 45Q proposal concerning credit for carbon dioxide sequestration in theory would help reach net zero goals, however, there need to be clear guidelines and requirements to ensure all reporting is accurate. In general, reporting and measuring accurate ESG progress is something we as an industry must address to avoid false claims and greenwashing.