The clean power push to supply Britain with the cheapest gas on Earth

On the wall at Rivan Industries is a list of promising start-ups that failed despite raising huge sums of cash. The “hardware graveyard”, as the British manufacturing company calls it, is sobering: “Northvolt, batteries $15bn [£12.5bn], dead; Theranos, medical diagnosis, $700m, dead; Nikola, automotive, $2bn, dead ...” “That’s to remind us that capital isn’t enough,” says Harvey Hodd, Rivan’s 30-year-old founder. “It’s extremely difficult to build hardware in the real world.

You can raise capital for it, as all these companies have done, but the litmus test is whether you can properly deploy it.” Like many of the start-ups on the list, Rivan certainly has a lot of promise. Founded in London just two years ago, the energy-tech firm raised $47.5m from investors including $34m in a single funding round last April. The company’s backers include John and Patrick Collison, the co-founders of digital-payments giant Stripe, European venture fund IQ Capital and Bolt founder Markus Villig.

But to avoid the fate of the doomed start-ups on Hodd’s list, Rivan is going to have to prove his central thesis: that climate-friendly, synthetic gas can be produced cheaply, and at scale, from air and water. It wants to provide these synthetic fuels for sectors of the economy that are the hardest to decarbonise, from heavy industry to aviation, using shipping container-sized plants. As well as the obvious environmental benefits, Hodd argues that his company can produce synthetic gas for less than it currently costs Britain to import the real thing.

That is a big claim, and would differentiate Rivan from other businesses currently proposing to produce alternative fuels such as hydrogen and ammonia for eye-watering prices. “We will be cheaper than anywhere on Earth, way beyond that, and way faster than that,” Hodd says. “It can be cheaper than importing today. Then, in a year or two, we’ll be cheaper than gas has basically ever been in the UK. But we still need a bit of time for that.”

With the Iran crisis and low European storage levels driving the price to four-year highs, natural gas is changing hands for €95 (£80) per megawatt hour on the Continent. It has been at elevated levels since 2022, however, when the invasion of Ukraine scrambled supplies and forced Britain and its allies to rely more heavily on liquefied natural gas from America, Qatar and other far-flung places. This is one reason Hodd’s promise to make gas cheaper than it has ever been in the UK is striking.

He is effectively claiming Rivan will be able to produce its synthetic replacement for pre-crisis levels of anything between €10 and €20 per megawatt hour, or less. So how will they do it? “This place will get us there,” says the entrepreneur, sitting in a meeting room at the company’s brand new factory in Bermondsey, south-east London. At a separate site in Swindon, Rivan has also been proving the viability of its synthetic gas plant and will soon begin feeding what it produces into the national gas grid.

It says it is now ready to scale the business up. It moved into the Bermondsey factory over the summer and is preparing to serve various customers across Britain and Europe, although Hodd says he can’t currently name any of them. Each plant, effectively a mini-factory, is situated alongside a solar farm and combines renewable electricity, rainwater, and carbon dioxide captured from the atmosphere to produce the synthetic gas. Clean power is used to power an electrolyser that breaks down rainwater to make hydrogen, which is then combined with carbon dioxide in a reactor to produce the gas.

Because the CO2 that makes the gas is drawn from the atmosphere, it is technically carbon-neutral. “As soon as you burn it, the exact same amount of carbon that you pulled to make it is released, and it keeps going round and round and round,” Hodd says. The machines have been completely developed in house by Rivan, which also owns the solar plants that supply them. Experts have generally been sceptical that making fuels using energy-intensive processes like this can ever be more economical than simply drilling in the North Sea.

But Hodd says the company has kept its costs ultra-low by doing everything itself: owning the power supply and building every part of the tech. “Fundamentally, you can’t argue with the laws of physics,” he agrees. “But if you think about how people have looked at this before, they’ve said, ‘OK, we’ll focus on say a singular part of that, which is a reactor. “We’ll do the design in-house because we have brilliant engineers. We’ll go and send it to a manufacturer, and they’ll fabricate it for us.’

“We can’t afford any of that, because we’re cost sensitive. We have to make everything: All the calculations, all the design, all the manufacturing, all the hardware, all the electronics, all the software. “And number two, we said, ‘We need access to an unprecedented amount of renewable, cheap electricity.’ So that’s why we focused on permitting all of our own solar. “It means we can get very, very cheap decentralised electricity, and they’re the two core components to making any chemical process.”

Perhaps the biggest advantage of the company’s idea is that it works exactly like the natural gas we use today. Factories and power plants can pump it through their existing pipes and burn it in their current machines without having to buy expensive, new net-zero equipment. Meanwhile, Rivan’s gas plants can also feed what they make directly into the pressurised national gas transmission network – meaning no expensive equipment for storage or transport is required.

For now the company is focused on gas alone. But there is no technical reason why it cannot also produce other products such as diesel or jet fuel, says Hodd. “You can make any synthetic fuels as long as you’ve got carbon and hydrogen. They’re the only two constituent parts you need,” he says. “Right now, we’re focused on natural gas for obvious reasons. But we will expand into loads of other things.” Rivan expects to become profitable off the back of producing its first 50 plants, having struck 10-year contracts to supply various customers including steel makers, cement companies and chemical manufacturers with its synthetic gas.

Some of its other clients include airlines and data centre operators. The plan is to produce one fuel plant a week – with plans already under way for a second factory that will be “40 times bigger”. Hodd claims that eventually, Rivan’s technology could help to wean Britain off its dependence on gas imports for the industries it supplies – serving as a forward-looking alternative to the North Sea. “Everything is downstream of energy access and cost,” adds Hodd.

“So we need to solve the problem of energy security in the UK. “There is available funding, and there is huge demand. Stage one of the business was to deploy our hardware, show that we can validate the costs. “Now we need to take that and scale it, and really show the world what we can do.”