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Financial Results 1Q 2021
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The roots that strengthen Hera’s innovation
One of the typical features of companies that are leaders in their industry is the ability to consolidate their leadership over time through innovation.
Hera nurtures that intangible asset, the innovation, through continuous investment, by leveraging some specific strengths.
While we take a closer look at some of the new projects Hera is working on, we try to understand what are the specific factors that drive the Group’ s success in innovation, through some questions that we put to Mr. Salvatore Molè, Central Innovation Director of Hera Group.
Salvatore Molè
Many utilities have identified hydrogen as the most effective innovation when answering to the need for economy decarbonisation. What about Hera? Are you also working to produce and use this energy source to replace fossil fuels?
In terms of energy transition, Hera is also looking at the solution represented by hydrogen, whose combustion produces energy with no CO2 emissions. In our case, the project takes on a multi-business value, as we can count on crucial expertise from the three areas in which we operate, i.e., water cycle, environment, and gas distribution. In a nutshell, one of the ideas is to use the water coming out of the purification plant to produce hydrogen. This would be a step forward in the circular re-use of resources, which is even more important in a country like Italy, which cannot count on abundant water reserves.
How do you plan to produce the hydrogen in the new project?
Typically, green hydrogen is produced through a process of electrolysis of water, powered by renewable energy. In our case, the splitting of the H2O molecule into oxygen and hydrogen would be powered by the green energy from our Waste-to-Energy plant, which – unlike other renewables such as wind and photovoltaics – ensures continuous production. Oxygen is recovered and fed into the sewage treatment tanks. From the sludge resulting from the purification process, we can extract carbon, which, combined with hydrogen, allows for the production of biomethane, which can in turn be fed into the distribution networks.
“Our hydrogen project is therefore an ideal example of how innovation can increase its impact and value within a multi-business portfolio. This is the case for Hera, which, given its specific nature, is the only company that can exploit such important synergy between waste treatment, water cycle and gas distribution network.”
What is the relationship between sustainability and innovation?
In Hera, sustainability is at the center of the strategy.
“We are therefore constantly looking for new solutions to run our business in an increasingly sustainable way.”
Recently, we have developed a new Steam Explosion technology for the pre-treatment of mowing and pruning. Branches produce a lot of CO2 emissions when put into incinerators because the bark, which prevents bacteria from attacking the plant, is a material that is difficult to digest. The process we have studied consists of saturating the biomass with steam, by heating the container while increasing the pressure, with the aim to produce a steam expansion similar to an explosion (Steam Explosion) that pulverises the bark fibres, then allowing the biogas to be recovered through the anaerobic digestion process. As part of our Business Plan, we have planned to build a biomethane plant specifically for these biomasses.
Which other element does contribute to innovation at Hera?
“Another element is certainly scale, which we have now achieved in all our operating businesses.”
Having a considerable size in the different businesses allows us, when we develop some innovative project, to deploy it with attractive economic returns in our activities, with no need to rely on partnerships with other operators in the sector.
Can you give us an actual example of the value of a certain scale achieved?
For instance, the ‘smart bin’ for waste, which talks to the station to communicate that it is full and needs emptying. Given the large number of bins in the areas we serve, we have been able to deploy the new ‘smart bin’ prototype on a large scale with positive returns for us and benefits for the citizens, while working totally independently and amortising the full cost of research.
What are the advantages deriving from the significant size you can boast in all business areas?
“Having developed a solid expertise across multiple businesses, we now have access to important international networks.”
One example is the Knowledge-2-Implementation (K2I) platform for the water sector – where Hera is the only Italian company present – on which all member companies make available their experience and knowledge on specific areas, processes, and issues of the water cycle. Therefore, comparisons and exchanges take place in a very targeted manner, between operators who have a track record in this area and other operators who are interested in adopting the same processes or technologies.
Can you give us a practical example of an issue for which you are leveraging the opportunities offered by this international platform?
I have already mentioned the criticality of the resource “water” if we want to produce hydrogen in abundance. We are trying to answer the question “How much water is present in the aquifers of our territories?” by accessing this international platform of “best practices” that we can count on. We can accurately measure how much water is in our infrastructure, but not in the aquifers. In recent weeks, we have been working with major utilities in Nevada and California – areas where water resiliency issues are at the forefront of attention due to the drought – to develop accurate groundwater measurement systems.
“In this way, given both the size and the standing that Hera has achieved, we are able to innovate by leveraging the vertical experience of other leading players globally.”
What else does give strength to Hera’s innovation?
“Another strength of the way we make innovation is that we can work in strong symbiosis with the communities that we know in depth and serve with many businesses.”
As a result, for example, we mobilize many companies, involving them in the new projects that we launch. A sample case is Hera Business Solution, the integrated and sustainable offer that we have designed specifically for businesses, which had a significant response in a very short time.
All in all, there are many reasons why our innovation platform is so strong and effective. We can play in a multi-business framework, being upstream and downstream of the supply chain of each project; we have a scale that allows us, on the one hand, to deploy large-scale innovation and, on the other one, to participate in international forums, from which we can draw examples and new ideas. Our strength also lies in both the culture of innovation and the close contact with the local communities, including the companies that operate there. Finally, sustainability guides our search for new solutions in the most appropriate direction, with long-term benefits.