Bringing new technology from concept to market is challenging, especially when it involves something as complex and transformative as hydrogen production. Syzygy Plasmonics (Syzygy) has been navigating this journey through multiple stages of development—each presenting unique challenges and opportunities. Trevor Best, CEO of Syzygy, recently shed light on the company’s approach to “first-of-a-kind” (FOAK) projects, breaking down their technology’s progression from R&D to small-scale commercialization.
Understanding First-of-a-Kind (FOAK)
In technology development, FOAK typically refers to the first deployment of a new process or product at scale, where the goal is to prove the technology works and demonstrate its commercial viability. However, FOAK is not a one-size-fits-all term. For Syzygy, there are three distinct FOAK stages:
- Pilot (TRL 7) – A scaled-down version of the component level technology (one-tenth to one-twentieth the size) designed to prove basic functionality and integration.
- Demonstration (TRL 8) – The full-scale component is tested to ensure it performs as expected in real-world conditions.
- Small Commercial System – The final stage before full commercialization, where the system proves it can produce on-spec hydrogen or fuel at scale and meet financial performance targets.
Syzygy’s FOAK Journey
Syzygy’s journey started in the R&D phase with small-scale reactor prototypes. These initial prototypes were simple lab setups that didn’t require complex support systems. The real challenge began when the company advanced to its first pilot project, which marked the beginning of true FOAK work.
In this pilot stage, Syzygy scaled its reactor to a one-tenth size and housed it in a shipping container. This system produced 10-20 kilograms of hydrogen per day and represented the first time Syzygy integrated the reactor into a system with industrial components like compressors and control schemes. This milestone proved that their technology could be integrated with existing infrastructure.
Next came the demonstration phase, where Syzygy tested a full-size version of their reactor. This wasn’t just about integration anymore—it was about proving the reactor could hit KPIs at scale. The project required a significant upgrade in terms of infrastructure and support systems, including full-size industrial-grade components and permitting for electrical grid connections.
Syzygy’s current focus is on its small commercial system. Here, multiple reactor cells are tied together to achieve the scale needed to produce commercially viable quantities of hydrogen or synthetic fuels. This system is expected to produce “on-spec” product at a competitive price, meaning it meets commercial standards and could be sold in the marketplace.
The Financial Challenge of FOAK
Securing financing for FOAK projects is notoriously difficult. Venture capital has supported Syzygy’s efforts up to now, and now Syzygy is beginning the journey of project finance. FOAK financiers often talk about wanting to fund breakthrough technologies but require the same ROI expectations as traditional project financiers, typically demanding a 15% IRR.
This creates a paradox: FOAK projects are inherently risky, but most financiers want the same security they would expect from proven scalable technology. The challenge is that few FOAK technologies can promise such high returns, especially in the early stages. This means that, despite the buzz around supporting innovation, many breakthrough projects struggle to secure the capital needed to move beyond the demonstration phase.
To mitigate this risk, Trevor emphasized the importance of ensuring that the economics can still work with a healthy contingency built into the budget. “FOAK pilot or demonstration costs can easily balloon to twice the original estimate or more,” he explained. It’s a vital lesson for companies attempting to scale: if you think your FOAK demonstration will cost $3 million, you should budget for $6 million. As you get closer to a small commercial scale, you should gain a better ability to model costs so that ultimately your first commercial plant can be financeable.”
The Importance of Commercial Partnerships
Another crucial factor in scaling hydrogen technology is the involvement of commercial partners. Syzygy’s strategy has been to develop strong partnerships with industrial players like Equinor and Sumitomo, who are vested in seeing the technology succeed. For example, Syzygy’s collaboration with the Research Triangle Institute on CO₂-to-fuel conversion was backed by these industry giants, which helped demonstrate the technology’s potential to investors.
Trevor also highlighted the importance of working with companies that are aligned strategically rather than just financially. While traditional investors may focus on ROI, corporate partners often have strategic goals, such as reducing carbon emissions or entering new markets, which make them more willing to take on early-stage risk. However, partnerships with large corporations can be slow-moving.
Looking Ahead
As Syzygy prepares to launch its small commercial plants, the company has reached agreements for the next phase but hasn’t started full-scale operations yet. The hope is that this system will validate both the technical and financial viability of Syzygy’s hydrogen technology, opening the door to larger-scale commercial projects in the future.
In the meantime, Syzygy’s story offers important lessons for any company developing FOAK technology. From the necessity of having a healthy contingency in budget to the complexities of securing financing and the critical role of strategic partnerships, Syzygy’s experience is a blueprint for bringing groundbreaking technologies to market.
For companies in the cleantech space, especially those working on decarbonization technologies like hydrogen, Syzygy’s journey underscores the importance of patience, perseverance, and a strategic approach to technology development and financing.
