WEBVTT - The Future of Renewable Energy 0:00:00.160 --> 0:00:04.160 This is Bloomberg Business Week with Carol Masser and Bloomberg 0:00:04.240 --> 0:00:08.039 Quick Takes Tim Stinovic on Bloomberg Radio. There's a story 0:00:08.039 --> 0:00:10.799 on the Bloomberg Today about how climate change made Hurricane 0:00:10.880 --> 0:00:13.680 Ian's most extreme rainfall about ten percent worse than would 0:00:13.680 --> 0:00:18.040 have been without two centuries two centuries of greenhouse gas pollution. 0:00:18.079 --> 0:00:20.200 This is according to a first take analysis of the 0:00:20.239 --> 0:00:23.760 storm by two US climate researchers. Their rapid analysis, which 0:00:23.800 --> 0:00:26.479 they shared on Twitter, looked only at rainfall and not 0:00:26.600 --> 0:00:29.320 other critical climate metrics related to hurricanes, such as strength 0:00:29.360 --> 0:00:32.360 and toesifications, sea level rise. But you know, we know 0:00:32.560 --> 0:00:35.199 that these storms may be not more frequent, but their 0:00:35.200 --> 0:00:38.000 intensity has definitely rapped out because of climate change, and 0:00:38.040 --> 0:00:40.720 that's something that we obviously need to think about. We've 0:00:40.760 --> 0:00:42.800 got somebody with us who thinks about this stuff a lot, 0:00:42.880 --> 0:00:45.640 and Jason Few is CEO of fuel Cell Energy. It's 0:00:45.680 --> 0:00:48.960 a publicly traded company. Uh. He joins us this afternoon 0:00:48.960 --> 0:00:51.320 on the phone from Danbury, Connecticut. Jason, how are you? 0:00:52.400 --> 0:00:54.960 I am good, Thank you very much. How are you doing, Tom? 0:00:55.080 --> 0:00:57.680 We're doing pretty well. Um. Can you explain how fuel 0:00:57.680 --> 0:01:00.480 cells work? Because I think a lot of people. Um, 0:01:00.840 --> 0:01:05.560 you know, we understand batteries, we understand internal combustion, but 0:01:05.720 --> 0:01:08.440 fuel cells it's something that I think is not necessarily 0:01:08.440 --> 0:01:11.680 on all of our radar. It's certainly not on mine. Sure, 0:01:11.720 --> 0:01:13.319 So I think if you think about it and its 0:01:13.400 --> 0:01:18.119 most simple terms, and we just use batteries as an analogy, Uh, 0:01:18.160 --> 0:01:21.319 you know, batteries you put energy in and then you 0:01:21.440 --> 0:01:24.160 drain it and then you need to recharge the battery. 0:01:24.600 --> 0:01:26.560 The way you can think about a fuel cell is 0:01:26.600 --> 0:01:30.680 that we use an input feedstock for the fuel cell 0:01:31.160 --> 0:01:34.039 and that allows the fuel cell to run and operate 0:01:34.160 --> 0:01:37.120 on a continual basis, you know, seven days a week, 0:01:37.160 --> 0:01:41.360 twenty four hours a day without the need to recharge 0:01:41.480 --> 0:01:45.600 the battery. And because it's a fuel cell, it actually 0:01:45.720 --> 0:01:49.960 uses a chemical reaction to actually take a fuel and 0:01:50.080 --> 0:01:53.360 air and effectively make hydrogen and then to use that 0:01:53.440 --> 0:01:56.960 hydrogen to produce power. And so it works very different 0:01:57.000 --> 0:02:01.200 than a traditional combustion engine that you know takes and 0:02:01.200 --> 0:02:04.880 and basically combust the fuel. With a fuel cell, the 0:02:04.920 --> 0:02:07.400 fuel is not combusted, so you don't produce things like 0:02:07.480 --> 0:02:10.760 socks and knocks and other particulars that play very heavily 0:02:10.800 --> 0:02:15.200 on you know, climate as well as air quality. What 0:02:15.280 --> 0:02:18.400 are the byproducts that it does end up releasing that 0:02:18.440 --> 0:02:21.960 it does produce, So it really depends on what is 0:02:22.120 --> 0:02:25.440 the actual feedstock that you're using. So in a case 0:02:25.560 --> 0:02:28.760 where you know, we're working to commercialize our solid oxide 0:02:28.760 --> 0:02:32.680 fuel cell, and in that case we could use hydrogen, 0:02:33.000 --> 0:02:36.960 and that hydrogen could be made from all renewable energy sources. 0:02:36.960 --> 0:02:40.200 So in that case, there are no byproducts that are 0:02:40.240 --> 0:02:43.920 produced other than water, you know, from the hydrogen. The 0:02:44.000 --> 0:02:47.720 second way we're if we're using a traditional fuel, let's 0:02:47.760 --> 0:02:52.480 say a biofuel or renewable natural gas or even um 0:02:52.880 --> 0:02:57.000 uh natural gas, then the byproduct is you do have 0:02:57.080 --> 0:03:01.120 some carbon emissions. But if you're using biofuels are R 0:03:01.200 --> 0:03:04.560 and G right, that's considered carbon neutral, and again there's 0:03:04.600 --> 0:03:07.280 no combustion of the fuel uh. And then we also 0:03:07.320 --> 0:03:09.640 have the ability to do things like carbon capture or 0:03:09.639 --> 0:03:12.720 what we refer to as well as carbon separation to 0:03:13.080 --> 0:03:17.880 significantly reduce or eliminate those carbon emissions. And when you 0:03:17.919 --> 0:03:21.240 think about it in total, when you when you look 0:03:21.280 --> 0:03:25.280 at fuel cells versus renewable energy sources let's say like 0:03:25.360 --> 0:03:28.679 wind and solar, because the fuel cells are more efficient 0:03:28.880 --> 0:03:32.320 and they run twenty four by seven, and you think 0:03:32.360 --> 0:03:36.680 about just overall avoided emissions because you know, you actually 0:03:36.800 --> 0:03:40.520 end up with greater emission reductions with fuel cells in 0:03:40.600 --> 0:03:43.080 most cases than you do when you're using renewable energy 0:03:43.080 --> 0:03:45.480 because you may only be getting twenty five to thirty 0:03:45.560 --> 0:03:48.800 five percent efficiency from those resources and then you need 0:03:48.840 --> 0:03:52.920 to get power from somewhere else. So, you know, it's interesting. 0:03:53.280 --> 0:03:55.040 We all have a lot of conversations about what is 0:03:55.120 --> 0:03:59.440 ultimately the solution um to climate change, and as we 0:03:59.480 --> 0:04:03.720 move towards an alternative energy you know, uh, world if 0:04:03.760 --> 0:04:06.720 you will, and hydrogen doesn't. It doesn't. It feels like 0:04:06.760 --> 0:04:10.200 there's momentum building um in general. But talk to us 0:04:10.200 --> 0:04:12.920 about some of the concerns when it comes to fuel cells, 0:04:12.960 --> 0:04:15.920 and some of it is the cost, the durability, some 0:04:16.040 --> 0:04:19.599 of it is concerns about flammability. Feel so, what what 0:04:19.760 --> 0:04:22.160 is it the thing, the nut that you feel like 0:04:22.200 --> 0:04:24.600 we still have to crack before we get kind of 0:04:24.720 --> 0:04:28.880 mass adoption. Well, that's a great question, and that fuel 0:04:28.920 --> 0:04:32.520 cell energy we do two things as a company. We 0:04:32.720 --> 0:04:36.400 decarbonized power and we produce hydrogen. Those are the two 0:04:36.440 --> 0:04:41.040 things we do with our platform technology when you think 0:04:41.040 --> 0:04:43.960 about some of those concerns or areas that you raise. 0:04:44.279 --> 0:04:48.159 You know, we've had commercial available products since two thousand 0:04:48.240 --> 0:04:51.200 and three, and in fact, our first commercial fuel cell 0:04:51.320 --> 0:04:54.040 was sold actually in Japan to the Careen and Beer 0:04:54.080 --> 0:04:58.760 Company using biofuels, So you know, it just shows the 0:04:58.800 --> 0:05:02.880 fuel flexibility of the platform when it comes to hydrogen 0:05:03.160 --> 0:05:05.479 and some of the concerns that you know get raised 0:05:05.520 --> 0:05:09.919 around hydrogen. You know, hydrogen is used widely, you know, 0:05:09.960 --> 0:05:12.680 around the world. You know, ninety minute metric tons of 0:05:12.760 --> 0:05:16.400 year of hydrogen are used. There's some forecast that suggests 0:05:16.480 --> 0:05:20.480 that you know, of the world's energy will ultimately come 0:05:20.520 --> 0:05:24.240 from hydrogen, if not greater than that. We tend to 0:05:24.279 --> 0:05:26.680 think that hydrogen is going to be an important part 0:05:26.760 --> 0:05:29.480 of the solution, the same way we think carbon capture 0:05:29.480 --> 0:05:32.159 will be an important part of the solution to achieving 0:05:32.560 --> 0:05:35.520 the one and a half degree scenario in terms of 0:05:35.600 --> 0:05:39.640 climate change itself. And and from a safety standpoint, like 0:05:39.680 --> 0:05:42.960 I said, you know, hydrogen widely used today. It's very 0:05:42.960 --> 0:05:47.520 safe and unlike a battery, which contains everything that you 0:05:47.600 --> 0:05:51.120 need inside the battery to actually start a fire, that's 0:05:51.160 --> 0:05:53.920 not the case with hydrogen. So it's actually quite today. 0:05:53.960 --> 0:05:57.440 So why isn't adopted more widespread? Why will it maybe 0:05:57.480 --> 0:06:01.960 only be of energy production in the years to come? 0:06:02.200 --> 0:06:05.880 Why not more Well, I think part of it is, UH, 0:06:05.920 --> 0:06:09.240 there's a cost question right in terms of this this 0:06:09.360 --> 0:06:12.359 desire to have green hydrogen. One of the things that 0:06:12.400 --> 0:06:15.200 I'm really excited about is the move not only in 0:06:15.240 --> 0:06:18.640 the United States, but I'm I'm seeing in countries around 0:06:18.680 --> 0:06:21.720 the world and the conversations we're having and in the 0:06:21.839 --> 0:06:25.839 conversation I actually just got to participate in UH in 0:06:25.960 --> 0:06:30.599 Pittsburgh with Secretary Grant Home and energy ministers from around 0:06:30.600 --> 0:06:34.800 the world at a CEO Hydrogen roundtable. The conversation is 0:06:34.880 --> 0:06:39.160 shifted from using colors to really talk about carbon intensity, 0:06:39.520 --> 0:06:41.960 and I think that's one big change that's going to 0:06:42.040 --> 0:06:47.040 help drive accelerated adoption. Another change or thing that's happening 0:06:47.040 --> 0:06:50.320 that's going to help drive adoption is the work that 0:06:50.360 --> 0:06:52.279 you're seeing that's going to get done as a result 0:06:52.320 --> 0:06:54.440 of the i ra A the United States. You have 0:06:54.480 --> 0:06:58.400 similar legislation in markets like Korea and Japan and across 0:06:58.480 --> 0:07:02.080 the EU. And we've seen this movie play out before. 0:07:02.480 --> 0:07:06.960 We saw how incentives, whether it's I T c production, 0:07:07.040 --> 0:07:09.840 tax credits, those kind of things really helped drive the 0:07:09.920 --> 0:07:13.200 cost curve down. We're going to see that same thing 0:07:13.320 --> 0:07:17.760 happen with fuel cells and with hydrogen as an effective 0:07:17.800 --> 0:07:21.760 way to get us to the cost that everyone's targeting, 0:07:21.800 --> 0:07:25.000 you know, which is you know, as low as a 0:07:25.080 --> 0:07:27.440 dollar a kilogram for hydrogen, and that's going to make 0:07:27.440 --> 0:07:30.520 it highly competitive. And I think as you look around 0:07:30.600 --> 0:07:34.200 the world today and you're seeing increased energy prices, those 0:07:34.200 --> 0:07:37.120 sparks spreads are narrowing, uh and and so I think 0:07:37.160 --> 0:07:41.240 you're going to see adoption start to accelerate with hydrogen 0:07:41.320 --> 0:07:44.880 as one of the answers to solving this climate crisis 0:07:44.880 --> 0:07:47.680 we have today. From an infrastructure perspective, when it comes 0:07:47.680 --> 0:07:50.400 to generating power, explain to us how you take a 0:07:50.440 --> 0:07:54.800 facility and allow it to create power using hydrogen using 0:07:54.840 --> 0:07:58.840 fuel cells versus using fossil fuels. Yeah. So when you 0:07:58.880 --> 0:08:03.920 think about um and input fuel, and and you think 0:08:03.920 --> 0:08:08.240 about hydrogen, hydrogen just becomes the input fuel that we 0:08:08.280 --> 0:08:11.640 would be using with our solid oxide platform for instance, 0:08:12.000 --> 0:08:14.760 in which we would take that hydrogen and we use 0:08:14.840 --> 0:08:19.560 that hydrogen as the feedstock to create electricity. That hydrogen 0:08:20.240 --> 0:08:24.480 interacts with the fuel cell, right, and and the chemistry 0:08:24.520 --> 0:08:28.080 that we use in this case of solid oxide technology 0:08:28.480 --> 0:08:32.520 to produce that power. And if that hydrogen was produced 0:08:32.559 --> 0:08:37.720 by you know, a zero carbon source of electricity. Let's 0:08:37.720 --> 0:08:41.360 say you're using electrolysis, so you're taking electricity and water 0:08:41.559 --> 0:08:44.640 and you're converting into hydrogen, then you're using that hydrogen 0:08:44.720 --> 0:08:49.960 to produce power. That hydrogen has zero carbon intensity, then 0:08:50.000 --> 0:08:53.720 the power being produced from our platform is zero carbon. 0:08:54.240 --> 0:08:57.719 But we also have the ability to use blended hydrogen 0:08:57.800 --> 0:09:00.760 and natural gas for example, which even lower as you know, 0:09:00.800 --> 0:09:03.920 the carbon intensity of the fuel in that case. But 0:09:04.200 --> 0:09:09.040 in all cases, whether it's hydrogen, renewval, natural gas, or 0:09:09.080 --> 0:09:12.400 bile fuels, that serves as the input fuel that the 0:09:12.400 --> 0:09:17.280 fuel cell needs to then convert that to power, whether 0:09:17.320 --> 0:09:20.719 it's for the grid or for a commercial industrial customer. 0:09:20.840 --> 0:09:24.960 Uh and delivering that power as a as a product. Hey, 0:09:25.000 --> 0:09:29.720 I'm curious, Jason um about the business and the business 0:09:29.760 --> 0:09:32.240 outlook and the growth. And I know earlier this month 0:09:32.679 --> 0:09:35.599 you came out with your latest update quarterly update. I 0:09:35.600 --> 0:09:37.720 think there was a wider than expected loss for the quarter, 0:09:37.800 --> 0:09:41.320 strongest quarterly revenue in five years. Um, and you guys 0:09:41.360 --> 0:09:44.480 talked about an increase in marketing and consulting costs because 0:09:44.600 --> 0:09:48.960 you had raised headcount for rebranding, accelerated and accelerating your 0:09:48.960 --> 0:09:52.080 sales and commercialization efforts. Give us some more color, if 0:09:52.080 --> 0:09:55.520 you will, in terms of the business who's buying um 0:09:55.679 --> 0:09:59.120 You guys, have you know customers, certainly in the energy 0:09:59.160 --> 0:10:01.240 space and the core brid space, But give us an 0:10:01.240 --> 0:10:05.280 idea of where the growth is coming from from your business. Sure, 0:10:05.679 --> 0:10:10.040 so are the customers that we target largely cut across 0:10:10.160 --> 0:10:14.400 the utility sector where we're providing grid based power, and 0:10:14.440 --> 0:10:17.920 we might be providing that power purely is just a 0:10:18.000 --> 0:10:21.360 power resource on the grid, or we might be providing 0:10:21.400 --> 0:10:24.800 that power and using the thermal energy where we might 0:10:24.840 --> 0:10:27.400 be connected to a district heating system and we're providing 0:10:27.440 --> 0:10:30.320 that thermal energy in addition to the power. Or we 0:10:30.400 --> 0:10:34.040 might be in an in a microgrid configuration where we're 0:10:34.080 --> 0:10:37.160 providing power to the grid and in the power outage, 0:10:37.200 --> 0:10:39.720 we go into what we refer to as island mode 0:10:40.040 --> 0:10:43.080 and we provide power to a dedicated set of resources, 0:10:43.200 --> 0:10:48.280 keeping those critical resources powered while the grid is down. 0:10:49.120 --> 0:10:52.560 We also serve commercial and industrial customers, and in many 0:10:52.559 --> 0:10:56.560 of those cases we're providing power to those customers, and 0:10:56.600 --> 0:11:00.680 again we might be providing the thermal energy such that 0:11:00.760 --> 0:11:05.520 they're using steam from our platform in their manufacturing process. Uh. 0:11:05.559 --> 0:11:08.679 And we also have the ability to do things like 0:11:08.800 --> 0:11:11.640 provide carbon to those customers. So when you think about 0:11:12.160 --> 0:11:16.199 carbonated beverage companies, are you think about food processing where 0:11:16.240 --> 0:11:21.000 carbon is really important to not only processing proteins, but 0:11:21.080 --> 0:11:26.160 then extending shelf life by keeping those proteins shield. Uh. 0:11:26.200 --> 0:11:29.080 Those are always in which we leverage our platforms to 0:11:29.120 --> 0:11:32.480 deliver value to our customers. In addition to hydrogen, and 0:11:32.520 --> 0:11:35.800 we're going to projects for Toyota today we will deliver 0:11:35.920 --> 0:11:39.480 hydrogen to Toyota power and water all from the same 0:11:39.480 --> 0:11:42.640 platform at the Port of Long Beach in California. Go 0:11:42.640 --> 0:11:45.400 go ahead. A very quick question. I just want to 0:11:45.400 --> 0:11:47.280 know about price increases, Jason. When it comes to the 0:11:47.320 --> 0:11:49.560 commodities that you actually use, are you seeing the prices 0:11:49.559 --> 0:11:55.000 come down at all? We are seeing different reactions to 0:11:55.120 --> 0:11:58.640 different commodities. So for example, if you take nickel as 0:11:58.640 --> 0:12:02.720 a commodity, we've seen price decreases there. We're seeing obviously 0:12:02.760 --> 0:12:06.600 pricing increases for natural gas. So as we look across 0:12:06.640 --> 0:12:10.200 our supply chain. We've had a very focused approach on 0:12:10.480 --> 0:12:14.719 managing those price increases to minimize the impacts for us 0:12:14.720 --> 0:12:17.719 in terms of pricing to our customers, but we are 0:12:17.760 --> 0:12:21.120 seeing some price improvements across the supply chain. Well. Really 0:12:21.120 --> 0:12:24.040 great to check in with you and really appreciate your time, Jason, 0:12:24.120 --> 0:12:26.600 take care of Jason fu, Chief executive officer at fuel 0:12:26.600 --> 0:12:29.520 Cell Energy. They are a one point for a billion 0:12:29.520 --> 0:12:32.000 dollar market cap company UH and great to have them 0:12:32.040 --> 0:12:34.960 join us from I believe their carpet offices in Connecticut.