Speaker 1: This is Bloomberg Business Week with Carol Masser and Bloomberg
Speaker 1: Quick Takes Tim Stinovic on Bloomberg Radio. There's a story
Speaker 1: on the Bloomberg Today about how climate change made Hurricane
Speaker 1: Ian's most extreme rainfall about ten percent worse than would
Speaker 1: have been without two centuries two centuries of greenhouse gas pollution.
Speaker 1: This is according to a first take analysis of the
Speaker 1: storm by two US climate researchers. Their rapid analysis, which
Speaker 1: they shared on Twitter, looked only at rainfall and not
Speaker 1: other critical climate metrics related to hurricanes, such as strength
Speaker 1: and toesifications, sea level rise. But you know, we know
Speaker 1: that these storms may be not more frequent, but their
Speaker 1: intensity has definitely rapped out because of climate change, and
Speaker 1: that's something that we obviously need to think about. We've
Speaker 1: got somebody with us who thinks about this stuff a lot,
Speaker 1: and Jason Few is CEO of fuel Cell Energy. It's
Speaker 1: a publicly traded company. Uh. He joins us this afternoon
Speaker 1: on the phone from Danbury, Connecticut. Jason, how are you?
Speaker 1: I am good, Thank you very much. How are you doing, Tom?
Speaker 1: We're doing pretty well. Um. Can you explain how fuel
Speaker 1: cells work? Because I think a lot of people. Um,
Speaker 1: you know, we understand batteries, we understand internal combustion, but
Speaker 1: fuel cells it's something that I think is not necessarily
Speaker 1: on all of our radar. It's certainly not on mine. Sure,
Speaker 1: So I think if you think about it and its
Speaker 1: most simple terms, and we just use batteries as an analogy, Uh,
Speaker 1: you know, batteries you put energy in and then you
Speaker 1: drain it and then you need to recharge the battery.
Speaker 1: The way you can think about a fuel cell is
Speaker 1: that we use an input feedstock for the fuel cell
Speaker 1: and that allows the fuel cell to run and operate
Speaker 1: on a continual basis, you know, seven days a week,
Speaker 1: twenty four hours a day without the need to recharge
Speaker 1: the battery. And because it's a fuel cell, it actually
Speaker 1: uses a chemical reaction to actually take a fuel and
Speaker 1: air and effectively make hydrogen and then to use that
Speaker 1: hydrogen to produce power. And so it works very different
Speaker 1: than a traditional combustion engine that you know takes and
Speaker 1: and basically combust the fuel. With a fuel cell, the
Speaker 1: fuel is not combusted, so you don't produce things like
Speaker 1: socks and knocks and other particulars that play very heavily
Speaker 1: on you know, climate as well as air quality. What
Speaker 1: are the byproducts that it does end up releasing that
Speaker 1: it does produce, So it really depends on what is
Speaker 1: the actual feedstock that you're using. So in a case
Speaker 1: where you know, we're working to commercialize our solid oxide
Speaker 1: fuel cell, and in that case we could use hydrogen,
Speaker 1: and that hydrogen could be made from all renewable energy sources.
Speaker 1: So in that case, there are no byproducts that are
Speaker 1: produced other than water, you know, from the hydrogen. The
Speaker 1: second way we're if we're using a traditional fuel, let's
Speaker 1: say a biofuel or renewable natural gas or even um
Speaker 1: uh natural gas, then the byproduct is you do have
Speaker 1: some carbon emissions. But if you're using biofuels are R
Speaker 1: and G right, that's considered carbon neutral, and again there's
Speaker 1: no combustion of the fuel uh. And then we also
Speaker 1: have the ability to do things like carbon capture or
Speaker 1: what we refer to as well as carbon separation to
Speaker 1: significantly reduce or eliminate those carbon emissions. And when you
Speaker 1: think about it in total, when you when you look
Speaker 1: at fuel cells versus renewable energy sources let's say like
Speaker 1: wind and solar, because the fuel cells are more efficient
Speaker 1: and they run twenty four by seven, and you think
Speaker 1: about just overall avoided emissions because you know, you actually
Speaker 1: end up with greater emission reductions with fuel cells in
Speaker 1: most cases than you do when you're using renewable energy
Speaker 1: because you may only be getting twenty five to thirty
Speaker 1: five percent efficiency from those resources and then you need
Speaker 1: to get power from somewhere else. So, you know, it's interesting.
Speaker 1: We all have a lot of conversations about what is
Speaker 1: ultimately the solution um to climate change, and as we
Speaker 1: move towards an alternative energy you know, uh, world if
Speaker 1: you will, and hydrogen doesn't. It doesn't. It feels like
Speaker 1: there's momentum building um in general. But talk to us
Speaker 1: about some of the concerns when it comes to fuel cells,
Speaker 1: and some of it is the cost, the durability, some
Speaker 1: of it is concerns about flammability. Feel so, what what
Speaker 1: is it the thing, the nut that you feel like
Speaker 1: we still have to crack before we get kind of
Speaker 1: mass adoption. Well, that's a great question, and that fuel
Speaker 1: cell energy we do two things as a company. We
Speaker 1: decarbonized power and we produce hydrogen. Those are the two
Speaker 1: things we do with our platform technology when you think
Speaker 1: about some of those concerns or areas that you raise.
Speaker 1: You know, we've had commercial available products since two thousand
Speaker 1: and three, and in fact, our first commercial fuel cell
Speaker 1: was sold actually in Japan to the Careen and Beer
Speaker 1: Company using biofuels, So you know, it just shows the
Speaker 1: fuel flexibility of the platform when it comes to hydrogen
Speaker 1: and some of the concerns that you know get raised
Speaker 1: around hydrogen. You know, hydrogen is used widely, you know,
Speaker 1: around the world. You know, ninety minute metric tons of
Speaker 1: year of hydrogen are used. There's some forecast that suggests
Speaker 1: that you know, of the world's energy will ultimately come
Speaker 1: from hydrogen, if not greater than that. We tend to
Speaker 1: think that hydrogen is going to be an important part
Speaker 1: of the solution, the same way we think carbon capture
Speaker 1: will be an important part of the solution to achieving
Speaker 1: the one and a half degree scenario in terms of
Speaker 1: climate change itself. And and from a safety standpoint, like
Speaker 1: I said, you know, hydrogen widely used today. It's very
Speaker 1: safe and unlike a battery, which contains everything that you
Speaker 1: need inside the battery to actually start a fire, that's
Speaker 1: not the case with hydrogen. So it's actually quite today.
Speaker 1: So why isn't adopted more widespread? Why will it maybe
Speaker 1: only be of energy production in the years to come?
Speaker 1: Why not more Well, I think part of it is, UH,
Speaker 1: there's a cost question right in terms of this this
Speaker 1: desire to have green hydrogen. One of the things that
Speaker 1: I'm really excited about is the move not only in
Speaker 1: the United States, but I'm I'm seeing in countries around
Speaker 1: the world and the conversations we're having and in the
Speaker 1: conversation I actually just got to participate in UH in
Speaker 1: Pittsburgh with Secretary Grant Home and energy ministers from around
Speaker 1: the world at a CEO Hydrogen roundtable. The conversation is
Speaker 1: shifted from using colors to really talk about carbon intensity,
Speaker 1: and I think that's one big change that's going to
Speaker 1: help drive accelerated adoption. Another change or thing that's happening
Speaker 1: that's going to help drive adoption is the work that
Speaker 1: you're seeing that's going to get done as a result
Speaker 1: of the i ra A the United States. You have
Speaker 1: similar legislation in markets like Korea and Japan and across
Speaker 1: the EU. And we've seen this movie play out before.
Speaker 1: We saw how incentives, whether it's I T c production,
Speaker 1: tax credits, those kind of things really helped drive the
Speaker 1: cost curve down. We're going to see that same thing
Speaker 1: happen with fuel cells and with hydrogen as an effective
Speaker 1: way to get us to the cost that everyone's targeting,
Speaker 1: you know, which is you know, as low as a
Speaker 1: dollar a kilogram for hydrogen, and that's going to make
Speaker 1: it highly competitive. And I think as you look around
Speaker 1: the world today and you're seeing increased energy prices, those
Speaker 1: sparks spreads are narrowing, uh and and so I think
Speaker 1: you're going to see adoption start to accelerate with hydrogen
Speaker 1: as one of the answers to solving this climate crisis
Speaker 1: we have today. From an infrastructure perspective, when it comes
Speaker 1: to generating power, explain to us how you take a
Speaker 1: facility and allow it to create power using hydrogen using
Speaker 1: fuel cells versus using fossil fuels. Yeah. So when you
Speaker 1: think about um and input fuel, and and you think
Speaker 1: about hydrogen, hydrogen just becomes the input fuel that we
Speaker 1: would be using with our solid oxide platform for instance,
Speaker 1: in which we would take that hydrogen and we use
Speaker 1: that hydrogen as the feedstock to create electricity. That hydrogen
Speaker 1: interacts with the fuel cell, right, and and the chemistry
Speaker 1: that we use in this case of solid oxide technology
Speaker 1: to produce that power. And if that hydrogen was produced
Speaker 1: by you know, a zero carbon source of electricity. Let's
Speaker 1: say you're using electrolysis, so you're taking electricity and water
Speaker 1: and you're converting into hydrogen, then you're using that hydrogen
Speaker 1: to produce power. That hydrogen has zero carbon intensity, then
Speaker 1: the power being produced from our platform is zero carbon.
Speaker 1: But we also have the ability to use blended hydrogen
Speaker 1: and natural gas for example, which even lower as you know,
Speaker 1: the carbon intensity of the fuel in that case. But
Speaker 1: in all cases, whether it's hydrogen, renewval, natural gas, or
Speaker 1: bile fuels, that serves as the input fuel that the
Speaker 1: fuel cell needs to then convert that to power, whether
Speaker 1: it's for the grid or for a commercial industrial customer.
Speaker 1: Uh and delivering that power as a as a product. Hey,
Speaker 1: I'm curious, Jason um about the business and the business
Speaker 1: outlook and the growth. And I know earlier this month
Speaker 1: you came out with your latest update quarterly update. I
Speaker 1: think there was a wider than expected loss for the quarter,
Speaker 1: strongest quarterly revenue in five years. Um, and you guys
Speaker 1: talked about an increase in marketing and consulting costs because
Speaker 1: you had raised headcount for rebranding, accelerated and accelerating your
Speaker 1: sales and commercialization efforts. Give us some more color, if
Speaker 1: you will, in terms of the business who's buying um
Speaker 1: You guys, have you know customers, certainly in the energy
Speaker 1: space and the core brid space, But give us an
Speaker 1: idea of where the growth is coming from from your business. Sure,
Speaker 1: so are the customers that we target largely cut across
Speaker 1: the utility sector where we're providing grid based power, and
Speaker 1: we might be providing that power purely is just a
Speaker 1: power resource on the grid, or we might be providing
Speaker 1: that power and using the thermal energy where we might
Speaker 1: be connected to a district heating system and we're providing
Speaker 1: that thermal energy in addition to the power. Or we
Speaker 1: might be in an in a microgrid configuration where we're
Speaker 1: providing power to the grid and in the power outage,
Speaker 1: we go into what we refer to as island mode
Speaker 1: and we provide power to a dedicated set of resources,
Speaker 1: keeping those critical resources powered while the grid is down.
Speaker 1: We also serve commercial and industrial customers, and in many
Speaker 1: of those cases we're providing power to those customers, and
Speaker 1: again we might be providing the thermal energy such that
Speaker 1: they're using steam from our platform in their manufacturing process. Uh.
Speaker 1: And we also have the ability to do things like
Speaker 1: provide carbon to those customers. So when you think about
Speaker 1: carbonated beverage companies, are you think about food processing where
Speaker 1: carbon is really important to not only processing proteins, but
Speaker 1: then extending shelf life by keeping those proteins shield. Uh.
Speaker 1: Those are always in which we leverage our platforms to
Speaker 1: deliver value to our customers. In addition to hydrogen, and
Speaker 1: we're going to projects for Toyota today we will deliver
Speaker 1: hydrogen to Toyota power and water all from the same
Speaker 1: platform at the Port of Long Beach in California. Go
Speaker 1: go ahead. A very quick question. I just want to
Speaker 1: know about price increases, Jason. When it comes to the
Speaker 1: commodities that you actually use, are you seeing the prices
Speaker 1: come down at all? We are seeing different reactions to
Speaker 1: different commodities. So for example, if you take nickel as
Speaker 1: a commodity, we've seen price decreases there. We're seeing obviously
Speaker 1: pricing increases for natural gas. So as we look across
Speaker 1: our supply chain. We've had a very focused approach on
Speaker 1: managing those price increases to minimize the impacts for us
Speaker 1: in terms of pricing to our customers, but we are
Speaker 1: seeing some price improvements across the supply chain. Well. Really
Speaker 1: great to check in with you and really appreciate your time, Jason,
Speaker 1: take care of Jason fu, Chief executive officer at fuel
Speaker 1: Cell Energy. They are a one point for a billion
Speaker 1: dollar market cap company UH and great to have them
Speaker 1: join us from I believe their carpet offices in Connecticut.