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Speaker 1: Pushkin.

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Speaker 2: Our civilization is built on hydrocarbons. Oil and natural gas

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Speaker 2: and coal light up our houses and keep us warm

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Speaker 2: in the winter, and propel our cars and our ships

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Speaker 2: and our planes. They provide the heat companies need to

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Speaker 2: make stuff. Hydrocarbons even provide the hydrogen to make the

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Speaker 2: fertilizer to grow our food. The problem with hydrocarbons, of course,

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Speaker 2: is the carbon it binds with oxygen, goes into the

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Speaker 2: atmosphere and warms the earth. So humanity is in the

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Speaker 2: process of trying to very quickly come up with cheap

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Speaker 2: ways to power our civilization without hydrocarbons, and as we've

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Speaker 2: been discussing on the show for the past few weeks,

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Speaker 2: we're actually making progress. Solar energy in particular, has become

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Speaker 2: wildly cheap in some parts of the world. In fact,

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Speaker 2: it's now free in the middle of sunny days, and

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Speaker 2: it's likely that solar energy will be free in the

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Speaker 2: middle of the day in much more of the world

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Speaker 2: in the next few years. The triumph of solar is

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Speaker 2: going to go a long way toward powering our houses

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Speaker 2: and factories and cars. But there's a lot that solar

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Speaker 2: energy cannot do for reasons of basic physics. It's really

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Speaker 2: hard to use solar energy or solar energy combined with

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Speaker 2: batteries to power container ships or commercial planes. It's also

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Speaker 2: hard to store large amounts of solar energy for long

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Speaker 2: periods of time, and it's hard to move it around

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Speaker 2: the planet, hard to move it across oceans. So a

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Speaker 2: lot of people step back and they look at hydrocarbons,

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Speaker 2: at fossil fuels, and they say, you know, most of

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Speaker 2: the energy in hydrocarbons comes from the hydropart, the hydrogen.

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Speaker 2: What if we could make clean fuel that was like hydrocarbons,

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Speaker 2: but without the carbon. What if we could take that

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Speaker 2: cheap abundant solar energy and use it to make pure hydrogen.

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Speaker 2: That would be a huge step forward in figuring out

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Speaker 2: how to live without hydrocarbons. I'm Jacob Goldstein, and this

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Speaker 2: is what's your problem. This is the third of three

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Speaker 2: shows we're doing about the triumph of solar energy, about

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Speaker 2: how solar became so cheap and what cheap abundant solar

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Speaker 2: energy is going to mean for the world. My guest

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Speaker 2: today is Rafi Garabedian. Rafi was previously the chief technology

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Speaker 2: officer at First Solar, a company that makes solar panels.

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Speaker 2: Now he is the co founder and CEO of Electric Hydrogen,

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Speaker 2: a company that has raised hundreds of millions of dollars

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Speaker 2: in its quest to solve a big problem. How do

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Speaker 2: you use intermittent solar and wind power to make hydrogen?

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Speaker 2: And crucially, how do you do it cheaply enough to

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Speaker 2: make that hydrogen economically viable?

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Speaker 3: So you can take this free solar and wind that's

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Speaker 3: available when no one needs it, you can convert it

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Speaker 3: to hydrogen and use that hydrogen to make things like

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Speaker 3: steel and fertilizer and fuels.

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Speaker 2: And the fuels if I understand correctly, I mean when

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Speaker 2: you burn hydrogen, it just makes water, right, Like that's

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Speaker 2: part of the genus.

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Speaker 3: Yeah, when you burn hydrogen, it just makes water. It's

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Speaker 3: super simple, right. It generates heat like any other fuel,

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Speaker 3: and you can use that in an engine or a

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Speaker 3: turbine or whatever. But it emits water instead of CO

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Speaker 3: two and water. So that's the beauty of it. But

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Speaker 3: the rub is hydrogen by itself is hard to utilize,

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Speaker 3: and that's because it's not a liquid, it's a gas,

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Speaker 3: and it's a gas it's hard to handle because the

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Speaker 3: molecule so small and so utilizing hydrogen directly as a

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Speaker 3: fuel requires a retooling of infrastructure. When I say infrastructure,

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Speaker 3: I mean pipelines, shipping, vessels to move the stuff around.

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Speaker 3: Even the engines and turbines that would burn it are different.

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Speaker 3: And so hydrogen itself is a fuel is the endgame,

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Speaker 3: And I would say it's gonna happen, but it's going

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Speaker 3: to take a long time to happen because we've spent

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Speaker 3: arguably over one hundred years building infrastructure, engines, turbines, pipelines, vessels,

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Speaker 3: all that stuff to move and consume hydrocarbons, and we're

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Speaker 3: going to have to retool all that stuff to move

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Speaker 3: and consume hydrogen as the replacement.

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Speaker 2: So if that's the long that's the long game. What's

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Speaker 2: the medium game?

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Speaker 3: Yeah, that's great quest, So that's the long game. The

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Speaker 3: medium game is convert the hydrogen into the molecules we

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Speaker 3: already know and love, well kind of love except for

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Speaker 3: one use, use, no one use, and in mind bogglingly

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Speaker 3: big quantities. And if you if you think about hydrocarbons

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Speaker 3: fuels and how much we use globally, I can't even

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Speaker 3: express how big an industry that is, and.

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Speaker 2: How much oil how many hydrocarbons we are burning right this.

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Speaker 3: Minute, right this minute, and and society, as we not

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Speaker 3: is entirely dependent on them. Energy is prosperity, energy is

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Speaker 3: everything that we do.

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Speaker 2: Is material well being. Yeah.

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Speaker 3: So so the so the short game, the medium game

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Speaker 3: is convert the hydrogen, which we know how to do

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Speaker 3: therm mechanically. We know how to convert hydrogen and CO two,

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Speaker 3: which we can capture from the atmosphere from other processes.

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Speaker 3: We know how to combine those two to make everything

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Speaker 3: from methane which is natural gas all the way to

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Speaker 3: jet fuel. And so once we do that, we don't

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Speaker 3: have to convert or retool all of that industrial infrastructure.

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Speaker 2: And why is that version cleaner? Where are you get

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Speaker 2: in the CO two from?

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Speaker 3: Yeah, that's also a great question. So the source of

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Speaker 3: the CO two is super important for the cleanliness the

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Speaker 3: carbon profile of these pathways, these intermediate pathways, because CO

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Speaker 3: two that is clean and clean would be biogenic. It

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Speaker 3: comes from biological sources. Well, that's a shorthanded way of

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Speaker 3: saying it's captured from the atmosphere, right, Because biological CO

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Speaker 3: two it comes from plants. And where does that come from?

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Speaker 3: It comes from the air. So that's a form of

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Speaker 3: carbon capture. But there's just not enough of it available

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Speaker 3: to make the amounts of fuels that we need, and

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Speaker 3: so it is a limited pathway. But geez, I mean,

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Speaker 3: we can go down that pathway for ten years and

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Speaker 3: not run out FC two sources. And in the meantime,

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Speaker 3: we can and are in fact already starting as a

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Speaker 3: society to build our hydrogen infrastructure. If you go to Europe,

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Speaker 3: there are in Germany, in the Netherlands there are hydrogen pipelines,

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Speaker 3: dedicated hydrogen pipelines being built today.

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Speaker 2: So good, So we're going in reverse chronological order. We

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Speaker 2: started with the long game, and then we did the

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Speaker 2: medium game, and now you're getting to the present. Right,

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Speaker 2: they're building hydrogen pipelines in Europe. Now people make hydrogen

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Speaker 2: today for industrial reasons, but that itself is a dirty process, right,

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Speaker 2: the sort of before we can get to the happy

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Speaker 2: world of just hydrogen, or even the semi happy world

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Speaker 2: of hydrogen plus captured carbon, you have to figure out

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Speaker 2: how to make hydrogen without emitting carbon in the first place.

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Speaker 2: Right that is, you got is your immediate project.

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Speaker 3: You got it, and and you know I came, I

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Speaker 3: and my co founders came at this problem actually from

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Speaker 3: the opposite direction. We're solar. We're solar people. Yeah, you know,

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Speaker 3: it's solar and wind like renewable power people, and and

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Speaker 3: and so like we we came at it from Gee,

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Speaker 3: this this energy resource is really cheap, it's really scalable,

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Speaker 3: but it's limited in how much we can deploy it.

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Speaker 3: We got to think of a better way to use it. Hey,

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Speaker 3: this hydrogen pathway opens up like a whole nother market

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Speaker 3: that's even bigger than the electric power market.

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Speaker 1: Let's let's try to do that.

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Speaker 2: I mean, there's a way where, like, if you can

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Speaker 2: turn intermittent clean energy into hydrogen, it's like fuel, right,

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Speaker 2: like hydrogen caption, Like it's kind of a pain in

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Speaker 2: the ass to move around, and yeah, yeah yeah, we're

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Speaker 2: not set up to use that kind of fuel. But

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Speaker 2: it has the qualities of fuel, not the qualities of electricity. Right,

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Speaker 2: ther'st portable, storable. So you have this big idea. It's

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Speaker 2: a it's an obvious question, right, an interesting, huge question

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Speaker 2: right now, Oh my god, solar power is free. How

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Speaker 2: do we leverage that? You know, people are trying to

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Speaker 2: make weirdo long duration batteries that's another version of it.

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Speaker 2: How do you land at hydrogen.

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Speaker 3: Yeah, I'm a big fan of long duration batteries because

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Speaker 3: the grid, the grid should take should be able to

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Speaker 3: take more solar and wind. It still doesn't solve the

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Speaker 3: other half of global emissions, which are all these chemical industries.

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Speaker 3: You think about. Think about Japan. Japan doesn't have fossil resources.

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Speaker 3: It doesn't have the land or the solar and wind

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Speaker 3: resource to power its own economy. So you know, the

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Speaker 3: choices for Japan are nuclear which is problematic for Japan.

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Speaker 2: Or because cushim because they had, like to non man

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Speaker 2: a nuclear accident.

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Speaker 3: Yeah, it wasn't a good thing. Or which is what

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Speaker 3: Japan does importing fuel from other places in the world.

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Speaker 3: You can't import batteries that are charged. That's not a thing, right,

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Speaker 3: And when you think about Japan, it's an isolated case.

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Speaker 3: It's really clear and obvious. But Europe imports most of

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Speaker 3: its energy as an example, right, and that's a huge economy.

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Speaker 3: So moving energy.

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Speaker 2: From Russia awkwardly.

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Speaker 3: Awkwardly from Russia, and now more and more LNG from

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Speaker 3: the US, which by the.

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Speaker 1: Way, natural gas liquid naturally.

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Speaker 3: Yeah, So wires work really well in continence places where

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Speaker 3: you have strong renewable resource and a lot of people.

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Speaker 3: But that is not characteristic of a lot of the world.

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Speaker 3: And so when we think globally and energy is a

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Speaker 3: global industry, right, it's a global problem. We think globally,

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Speaker 3: you've got to be able to move energy in some

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Speaker 3: form other than electrons. And that takes us to hydrogen

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Speaker 3: or it's it's you know, it's derivative. It's like futiless

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Speaker 3: other hydrocarbons as the way we do this, right, that's

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Speaker 3: the only way humanity has come up with to move

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Speaker 3: vast amounts of energy to where people need it.

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Speaker 2: I mean, it's the genius of It's the genius of

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Speaker 2: fossil fuel, right Like, fossil fuel is an extraordinary energy

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Speaker 2: storage mechanism, right, Like it's incredible. You can move it around,

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Speaker 2: you can leave it in a tank, you can put

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Speaker 2: it on a ship. It's full of energy, you can

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Speaker 2: burn it whenever you want. Like it's tough to beat.

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Speaker 1: It is super tough to beat.

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Speaker 2: And we have one hundred and fifty years of optimizing

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Speaker 2: for it and building a world around it.

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Speaker 3: And if it weren't for climate change, I wouldn't be

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Speaker 3: doing what I'm doing because because fossil Yeah, because fossil

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Speaker 3: fuels are awesome in every other way like you describe, right,

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Speaker 3: They're easy to store, they're easy to move, they're super

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Speaker 3: cheap to get. Wow, like wow, it's such a gift

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Speaker 3: Nature's given us and we've been using it for a

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Speaker 3: long time.

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Speaker 1: But gift asterisk, Yeah, gift fasters.

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Speaker 3: Well, we've got me smarter, right, Yeah, we've gotten smarter

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Speaker 3: and we've we've started to realize the unintended consequences of

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Speaker 3: this this this resource we have, and now we got

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Speaker 3: to we you know, luckily, hopefully maybe we have time

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Speaker 3: enough to get out of our own way and start

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Speaker 3: to convert. So okay, So so hydrogen lets you do

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Speaker 3: all these things. It's harder, but the big problem is

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Speaker 3: it's more expensive. It's a lot more expensive today.

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Speaker 2: Well, and let's just be clear, there's hydrogen means different things,

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Speaker 2: and like there is people do make hydrogen an industrial

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Speaker 2: at industrial scale now, but they do it in a

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Speaker 2: way that emits carbon dioxide. That is like not at

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Speaker 2: all about solving the kinds of problems we're talking, right,

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Speaker 2: So the fundamental hard thing is using electricity to make hydrogen,

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Speaker 2: which is like technically not hard, but uh, but nobodys

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Speaker 2: figured out how to do it in an economical way. Right,

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Speaker 2: that's the base.

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Speaker 3: Exactly, That's exactly it. People have been doing it since

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Speaker 3: I don't know, sixty years ago, sixty five years.

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Speaker 2: Ago, right, Like, I mean my high school chemistry teacher

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Speaker 2: did it. Right, He like made this jank electoralizer where

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Speaker 2: he had a battery and then he ran wires from

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Speaker 2: the battery into a thing of water and he put

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Speaker 2: like upside down test tubes, you know, in the water,

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Speaker 2: and one of the test tubes filled up with oxygen

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Speaker 2: and the other one filled up with hydrogen.

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Speaker 3: That basic demonstration in high school chem lab or physics

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Speaker 3: lab is the core physical phenomena that is being scaled

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Speaker 3: up into modern electrolisers. That's the machine that does this

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Speaker 3: on an industrial scale today. That equipment is inefficient and

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Speaker 3: super expensive, and because it's so expensive, you have to

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Speaker 3: run it all the time, and so where Yeah, so

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Speaker 3: you know, think about like you own this really expensive thing,

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Speaker 3: you want to use it all the time?

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Speaker 2: Yeah, right, because the value you get out of it

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Speaker 2: is like the amount you pay for it divided by

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Speaker 2: how much you use it.

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Speaker 1: Right, Exactly, You've tied up all this money in a thing. Yeah,

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Speaker 1: and you've got it. That money has to be put

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Speaker 1: to work, right, And.

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Speaker 2: So if you're if your whole case is like, oh,

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Speaker 2: we're gonna have intermittent free energy, that's not going to work.

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Speaker 1: Yeah, that's right.

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Speaker 3: Where people do electrolysis today is where.

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Speaker 1: They have cheap hydropower.

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Speaker 3: And you know, you think of like Sweden and Norway

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Speaker 3: nor the Norwegians were pioneers in this because they had

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Speaker 3: a lot of hydropower in remote places without a lot

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Speaker 3: of people. Hey, if we could convert them to hydrogen

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Speaker 3: and make fertilizer, wouldn't that be great?

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Speaker 1: Right?

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Speaker 3: So that's been going on for half a decade and

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Speaker 3: interesting that part of the world. Okay, but hydropower isn't

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Speaker 3: all that scalable. There's gigawots of it out there, but

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Speaker 3: you can't build much more because it has its own

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Speaker 3: environmental impacts.

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Speaker 1: Right.

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Speaker 3: So okay, so that's the core issues. This equipment super expensive,

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Speaker 3: it's not efficient, and so that limits our ability to

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Speaker 3: use it from with this powered by this cheap, abundant

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Speaker 3: but intermittent renewable resource, all this excess solar and wet.

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Speaker 2: It's always techno economics, right, like the whole energy transition.

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Speaker 2: It's not really a technical problem, clearly at this point.

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Speaker 2: It's a it's an economic problem. It's the technoeconomic problem, yep.

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Speaker 3: And the solution to the technoeconomic problem is largely technical innovation,

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Speaker 3: but with business model and economic innovation wrapped around.

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Speaker 2: It, and scale right and scale it seems like.

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Speaker 3: Yeah, yeah, scale absolutely, scale as well. So let's talk

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Speaker 3: about scale. So most electrializers, big ones are one, maybe

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Speaker 3: two or three megalots. Those are the biggest ones out there.

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Speaker 3: A megawot is like how to put that in real terms?

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Speaker 3: It sounds like a lot of power. It kind of

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Speaker 3: is a lot of power, but it's nothing compared to

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Speaker 3: the industries we're talking about and the uses.

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Speaker 1: We're talking about.

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Speaker 3: So if you think about like an ammonia plant, you

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Speaker 3: would need a thousand of those to make enough hydrogen

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Speaker 3: to run an ammonia chemical.

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Speaker 2: One that's one ammonia.

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Speaker 1: That's one one of thousands of the world.

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Speaker 2: So do you need to go up buy a thousand X?

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Speaker 2: Is that about the about them?

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Speaker 3: You need to go up by about one hundred X.

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Speaker 2: Okay, and then you put you then you send ten

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Speaker 2: of them to the plant and it makes.

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Speaker 1: That makes sense. That's it. That's it.

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Speaker 3: So it is all about technice economics, which, by the way,

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Speaker 3: you know, so the company I run as a startup,

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Speaker 3: we've been around for a little over four years venture

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Speaker 3: financed tech startup. This is an insane thing for a

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Speaker 3: startup to try to do.

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Speaker 2: Yes, well, you've raised a ton of money, right, Like,

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Speaker 2: it's wildly capital intensity. You've raised hundreds of millions of dollars.

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Speaker 2: We have an impressive display of venture capital that people

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Speaker 2: have invested in you given you that much money on

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Speaker 2: a kind of long shot thing, right on a certainly

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Speaker 2: hard thing that might not.

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Speaker 3: Work, super super intense and I'm super grateful that the

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Speaker 3: venture community. You know, if you look at the venture

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Speaker 3: capital communities experience with what they call clean tech, right,

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Speaker 3: this is like technology companies that are trying to do

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Speaker 3: like big hard transformations of industry to make them cleaner.

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Speaker 1: You know, there was clean tech one point.

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Speaker 3: Oh maybe a decade or more ago, and a lot

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Speaker 3: of people lost a lot of money. Yeah, right in

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Speaker 3: that in that first foray into clean tech.

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Speaker 2: I mean, you happen to work at one of the

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Speaker 2: only US companies that really came through that, right, maybe

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Speaker 2: that helps raising money this time.

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Speaker 3: It certainly doesn't hurt. It certainly doesn't hurt. Yeah, it's

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Speaker 3: spent thirteen years at First Solar, and it is literally

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Speaker 3: one of the as you said, the old on the

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Speaker 3: US companies that's still thriving in these industries. But you know,

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Speaker 3: when we started this company, we I think we started

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Speaker 3: it at a great time clean dech two point zero,

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Speaker 3: if you will. There was a lot of venture capital

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Speaker 3: interest for good reason because in political resolve to do

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Speaker 3: the things necessary to start to address climate change was strong,

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Speaker 3: and that provides like the economic footing the support necessary

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Speaker 3: for kind of new technologies to enter the market. When

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Speaker 3: something new enters is the market, it's never competitive.

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Speaker 2: Yeah, well, it's interesting in the solar story, how at

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Speaker 2: least in Jenny Chase's version of the story, which seems

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Speaker 2: like the most credible version I've come across. The German

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Speaker 2: feed in tariff of two thousand and four is this

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Speaker 2: sort of inciting event. It's just this one policy change

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Speaker 2: in a medium sized, rich country kicks off this amazing

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Speaker 2: run down the experience curve, you know, of solar panels

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Speaker 2: getting cheaper and cheaper and cheaper until now without incentives

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Speaker 2: like solar is gonna win. It's gonna keep winning. It's

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Speaker 2: not subject to these political wins.

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Speaker 1: You got it.

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Speaker 3: I won't repeat the story though I personally lived through it,

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Speaker 3: but it sounds like you and your listeners have already

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Speaker 3: heard it and your recounting is accurate. Where not for

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Speaker 3: the German feed and tariff for solar probably would not exist,

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Speaker 3: nor would the solar industry as we know it. China

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Speaker 3: certainly would not have scaled up their industry dramatically, and

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Speaker 3: you know they're the dominant supplier of solar panels in

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Speaker 3: the world by a large margin. But as a result

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Speaker 3: of all that, the industry got to scale, got the

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Speaker 3: better and better economics. And it's not just the solar panels,

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Speaker 3: the equipment, but it's also, as you said, the experience

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Speaker 3: of building solar farms, the learning and the cost reduction,

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Speaker 3: the country repetition. Right, you build one house, it's kind

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Speaker 3: of spenser. If you build one hundred houses, they get

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Speaker 3: cheaper and cheaper. It's the same with solar and wind.

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Speaker 2: Houses are a weird example, though. Houses are like that

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Speaker 2: terrible productivity gits. Everything else gets cheaper when you build

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Speaker 2: more of them houses weirdly refractory the productivity gits.

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Speaker 1: That was a really bad example. I agree.

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Speaker 2: Still to come on the show, how Rafi and his

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Speaker 2: colleagues at Electric Hydrogen plan to cut the cost of

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Speaker 2: clean hydrogen in half? So is the Inflation Reduction Act

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Speaker 2: this bill, this US law passed a few years ago.

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Speaker 2: Is this like the German feed in tariff of two

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Speaker 2: thousand and four a moment for hydrogen? Is that what

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Speaker 2: you're hoping? Yeah, so the answer is no, Okay, interesting,

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Speaker 2: tell me more.

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Speaker 1: Yeah.

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Speaker 3: Interestingly, the equivalent of the German feeding taraff today is

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Speaker 3: not the Inflation Reduction Act and its provisions for hydrogen,

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Speaker 3: but it's what's going on in European policy.

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Speaker 2: Okay, well, that's heartening for semi obvious reasons. Go on, yeah, yeah,

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Speaker 2: So what's happening in Europe?

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Speaker 3: So in the European Union there is there are a

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Speaker 3: number of policy frameworks, but what's called Red two or

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Speaker 3: Red three, which are laws in Europe. These laws in

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Speaker 3: Europe provide a framework for carrots and sticks to decarbonize

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Speaker 3: certain high emitting industries. It all has to do with

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Speaker 3: the utilization of the renewable energy to decarbonize things like steel, concrete, fertilizer,

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Speaker 3: chemical industries, energy.

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Speaker 2: Those I mean, those heavy industry ones that you mentioned

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Speaker 2: are the classic like ones we haven't figured out yet,

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Speaker 2: classic like hard to do with electricity, even if you

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Speaker 2: got the electricity, like cement famously very hard to decarbonize steel,

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Speaker 2: very hard, fertilizer very hard, like we don't know how

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Speaker 2: to do it yet.

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Speaker 3: Well, interestingly, we do know how to do it.

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Speaker 2: I don't have to do it economically yet.

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Speaker 1: That's it, you got it, you got it.

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Speaker 2: Which ends up being the same thing with commodity businesses like.

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Speaker 3: That, one hundred percent. The only value in a commodity

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Speaker 3: business is the price, right, There's no other like, you know,

380
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Speaker 3: you can't make it prettier, you can't make it faster,

381
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Speaker 3: you can't make it cooler.

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Speaker 1: It's just the only thing you can do. Bro Yeah yeah,

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00:22:51,716 --> 00:22:53,276
Speaker 1: yeah yeah. Okay.

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Speaker 3: So, so the European kind of legal framework, policy framework

385
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Speaker 3: actually is what's driving this industry to produce hydrogen and

386
00:23:02,156 --> 00:23:08,076
Speaker 3: chemicals from hydrogen because it's it's driving consumption demand for

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00:23:08,156 --> 00:23:10,996
Speaker 3: those moments for those products.

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Speaker 2: Because basically they get a subsidy if they consume hydrogen

389
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Speaker 2: and they pay a fee if they don't, and more.

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Speaker 3: Last, and it's that last piece, the penalty if you

391
00:23:21,436 --> 00:23:25,476
Speaker 3: don't the stick. The stick is what actually works to

392
00:23:25,556 --> 00:23:30,316
Speaker 3: create demand. That's right, because and in contrast what we

393
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Speaker 3: have in the US with the IRA and we can

394
00:23:34,516 --> 00:23:36,836
Speaker 3: talk later about like what's actually going on with it

395
00:23:36,876 --> 00:23:39,516
Speaker 3: if you care to. But but in the US, we

396
00:23:39,636 --> 00:23:44,676
Speaker 3: just have a production side subsidy visa via tax credit

397
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Speaker 3: that doesn't do anything to cause the demand side to

398
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Speaker 3: buy the stuff.

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Speaker 2: Yes, I mean, I guess. If I guess, the hope

400
00:23:53,756 --> 00:23:58,356
Speaker 2: would be that the the production subsidy would lower the

401
00:23:58,436 --> 00:24:02,756
Speaker 2: price at which producers could sell, which would then increased demand.

402
00:24:03,236 --> 00:24:07,876
Speaker 1: That is the that would be the naive hope. Naive, Yeah,

403
00:24:07,916 --> 00:24:08,716
Speaker 1: we've never seen.

404
00:24:09,636 --> 00:24:12,236
Speaker 2: I hope was my first album.

405
00:24:14,556 --> 00:24:17,116
Speaker 3: Go on, We've never seen, We've we've never seen production

406
00:24:17,236 --> 00:24:23,996
Speaker 3: side support alone the new energy industry, it's always taken.

407
00:24:24,476 --> 00:24:26,116
Speaker 2: Yeah, you have to subsidize demand.

408
00:24:26,716 --> 00:24:29,316
Speaker 3: Yeah, you have to somehow have to get the industry

409
00:24:29,396 --> 00:24:33,116
Speaker 3: over that initial hump where the supply side subsidy isn't

410
00:24:33,156 --> 00:24:36,396
Speaker 3: quite sufficient to cause people to change behavior.

411
00:24:37,516 --> 00:24:37,956
Speaker 1: Uh huh.

412
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Speaker 2: Interesting, Well, so does that mean that whatever happens with

413
00:24:44,036 --> 00:24:48,996
Speaker 2: the with the regime change in Washington isn't going to

414
00:24:49,036 --> 00:24:50,876
Speaker 2: be that big of a deal for you. You're like, well,

415
00:24:50,916 --> 00:24:54,916
Speaker 2: we weren't that into the IRA anyway, Yeah.

416
00:24:54,836 --> 00:24:58,836
Speaker 3: Kind of, you know, we were. We were, and frankly

417
00:24:58,916 --> 00:25:02,196
Speaker 3: still are super hopeful that the rules for using the

418
00:25:02,236 --> 00:25:04,996
Speaker 3: IRA tax credit will get clarified and then we'll be

419
00:25:05,036 --> 00:25:07,236
Speaker 3: able to actually use it because we haven't been able

420
00:25:07,236 --> 00:25:09,956
Speaker 3: to use it yet because the current means hasn't set

421
00:25:09,956 --> 00:25:12,996
Speaker 3: the rules. Okay, the law exists, it's kind of a

422
00:25:12,996 --> 00:25:19,076
Speaker 3: walky thing, but it's unclear. It's frankly unclear how the

423
00:25:20,316 --> 00:25:23,596
Speaker 3: new administration is going to deal with this, and I

424
00:25:23,636 --> 00:25:26,636
Speaker 3: think there's, you know, reason to believe it could go

425
00:25:26,676 --> 00:25:28,476
Speaker 3: either way. So we're waiting to see.

426
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Speaker 2: Yeah, I mean, it seems like a lot of the

427
00:25:30,876 --> 00:25:36,236
Speaker 2: IRA might be unchanged, right. I know, there was a

428
00:25:36,276 --> 00:25:40,156
Speaker 2: group of Republican congressmen that recently wrote to the Speaker

429
00:25:40,196 --> 00:25:43,516
Speaker 2: of the House saying don't get the IRA, saying it's

430
00:25:43,556 --> 00:25:45,956
Speaker 2: you know, creating jobs in our industries. It does seem

431
00:25:46,036 --> 00:25:49,596
Speaker 2: like it was written in such a way, or at

432
00:25:49,676 --> 00:25:52,156
Speaker 2: least as being implemented in such a way in other

433
00:25:53,236 --> 00:25:57,676
Speaker 2: sectors at least that it does have some staying power political.

434
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Speaker 3: At the risk of being political and super cynical, which

435
00:26:02,036 --> 00:26:05,356
Speaker 3: I tend to be when I get political. Washington's about

436
00:26:05,356 --> 00:26:11,916
Speaker 3: money and the IRA channel money disproportionately it turns out

437
00:26:12,036 --> 00:26:16,556
Speaker 3: to Republican states, and so like, there is real support,

438
00:26:17,276 --> 00:26:21,036
Speaker 3: not only principal support, because not all Republicans are blind

439
00:26:21,156 --> 00:26:25,476
Speaker 3: to climate change and the need to transform the energy sector. Okay,

440
00:26:25,516 --> 00:26:28,236
Speaker 3: so I think that needs to be said and realized

441
00:26:28,396 --> 00:26:32,716
Speaker 3: that it's not a monolithic Hey we don't care, right, Yeah,

442
00:26:32,796 --> 00:26:35,876
Speaker 3: there's real support for solar and wind in particular, but

443
00:26:35,956 --> 00:26:42,356
Speaker 3: also for other decomponization pathways amongst Republicans. But also, like,

444
00:26:42,396 --> 00:26:44,996
Speaker 3: the money matters, and so you know, Red states are

445
00:26:44,996 --> 00:26:47,716
Speaker 3: getting a lot of money from the high rate potentially,

446
00:26:47,756 --> 00:26:51,076
Speaker 3: and so gutting that would be I think politically challenging.

447
00:26:51,916 --> 00:26:54,476
Speaker 3: But this is a this is a nonlinear time, right,

448
00:26:54,756 --> 00:26:58,076
Speaker 3: this is a this is a time when I think

449
00:26:58,116 --> 00:26:58,796
Speaker 3: it's very hard.

450
00:26:58,716 --> 00:27:01,076
Speaker 1: To predict what's going to go on in Washington.

451
00:27:01,156 --> 00:27:04,196
Speaker 2: So we'll see, yeah, yeah, yeah, So okay, So so

452
00:27:04,596 --> 00:27:08,956
Speaker 2: you're saying you have a pathway in Europe. Anyways, let's

453
00:27:09,196 --> 00:27:12,516
Speaker 2: let's talk more about how you're actually trying to do

454
00:27:12,596 --> 00:27:15,116
Speaker 2: this thing. Right, So, you have in front of you

455
00:27:15,156 --> 00:27:21,956
Speaker 2: a sort of technical problem, which is making green hydrogen

456
00:27:22,596 --> 00:27:25,916
Speaker 2: cheaply enough to make economic sense, right, and you have

457
00:27:26,036 --> 00:27:30,836
Speaker 2: certain tailwinds in the form of regulations that are encouraging this,

458
00:27:30,956 --> 00:27:33,476
Speaker 2: but you're still not there yet, right, even with those tailwinds.

459
00:27:33,556 --> 00:27:36,116
Speaker 2: Is that a fair characterization of where you are now?

460
00:27:36,556 --> 00:27:39,756
Speaker 3: Yeah, that's a totally fair assessment for the whole industry actually,

461
00:27:39,836 --> 00:27:42,676
Speaker 3: so yeah. So if you think about the whole like

462
00:27:43,036 --> 00:27:48,676
Speaker 3: burgeoning hopefully soon burgeoning industry of sourgon.

463
00:27:51,036 --> 00:27:53,716
Speaker 2: Today it's nascent, tomorrow it's burgeoning.

464
00:27:53,716 --> 00:27:54,316
Speaker 1: That's right.

465
00:27:54,596 --> 00:27:57,796
Speaker 3: If you think about like green hydrogen or electrolytic hydrogen,

466
00:27:57,836 --> 00:28:03,356
Speaker 3: whatever you want to call it, as an industry, it's

467
00:28:03,436 --> 00:28:07,236
Speaker 3: gotten a lot of excitement because again, the policy framework

468
00:28:07,756 --> 00:28:12,356
Speaker 3: has matured and there to support it, but not a

469
00:28:12,356 --> 00:28:15,596
Speaker 3: lot of big projects have been built yet. And it's

470
00:28:15,636 --> 00:28:21,516
Speaker 3: because it's too expensive. That is exactly why my company

471
00:28:21,556 --> 00:28:26,356
Speaker 3: Electric Collagen exists like we exist because we actually recognize

472
00:28:26,356 --> 00:28:30,636
Speaker 3: that it's too expensive and have developed and are commercializing

473
00:28:31,796 --> 00:28:35,516
Speaker 3: technical solution to make it much cheaper by a factor

474
00:28:35,516 --> 00:28:38,716
Speaker 3: of two, Like half the cost.

475
00:28:39,196 --> 00:28:42,236
Speaker 2: Does have get you there? Does if you actually do

476
00:28:42,316 --> 00:28:45,316
Speaker 2: cut the price in half? Then does it work under say,

477
00:28:45,316 --> 00:28:46,196
Speaker 2: the European.

478
00:28:45,836 --> 00:28:46,516
Speaker 1: Regime right now?

479
00:28:46,636 --> 00:28:51,436
Speaker 3: Yeah, totally so in Europe. In Europe, the typical project

480
00:28:51,556 --> 00:28:55,116
Speaker 3: using other technology companies, equipment, and you know, I'll name

481
00:28:55,316 --> 00:28:58,756
Speaker 3: I'll name the big ones like Siemens or Tiscent Croup, right,

482
00:28:58,796 --> 00:28:59,716
Speaker 3: big industry.

483
00:28:59,396 --> 00:29:01,436
Speaker 2: Big incumbent industrial companies.

484
00:29:01,476 --> 00:29:03,836
Speaker 3: Yeah, they make these things, they make equipment to do

485
00:29:03,876 --> 00:29:07,196
Speaker 3: this stuff. The cost of producing hydrogen using that gear

486
00:29:07,356 --> 00:29:10,676
Speaker 3: in Europe today is probably the five dollars and fifty

487
00:29:10,716 --> 00:29:13,716
Speaker 3: cents a kilo of hydrogen, so maybe six dollars achilo

488
00:29:13,716 --> 00:29:17,076
Speaker 3: of hydrogen. If you make hydrogen from natural gas in

489
00:29:17,116 --> 00:29:19,876
Speaker 3: Europe today, it probably costs their own.

490
00:29:19,796 --> 00:29:21,796
Speaker 1: Three dollars akuila. Oh okay.

491
00:29:22,236 --> 00:29:24,276
Speaker 3: We think we're already there. We think we're already at

492
00:29:24,276 --> 00:29:29,156
Speaker 3: a place where we can enable economic parody or close

493
00:29:29,196 --> 00:29:34,316
Speaker 3: to economic parity with the fossil incumbent, but in a

494
00:29:34,516 --> 00:29:36,036
Speaker 3: very fundamentally preen way.

495
00:29:36,716 --> 00:29:39,876
Speaker 2: So how do you do it? How do you cut

496
00:29:39,916 --> 00:29:41,076
Speaker 2: the cost in half?

497
00:29:41,556 --> 00:29:43,436
Speaker 1: Yeah?

498
00:29:42,436 --> 00:29:47,036
Speaker 3: It all starts with the realization, which you struck on

499
00:29:47,556 --> 00:29:52,476
Speaker 3: really early in this conversation, that cheap power is plentiful,

500
00:29:52,516 --> 00:29:57,556
Speaker 3: but it's not steady. Yeah, right, So the equipment that

501
00:29:57,676 --> 00:30:01,476
Speaker 3: you use to convert that unsteady, intermittent cheap power to

502
00:30:01,516 --> 00:30:05,076
Speaker 3: hydrogen has to be really, really inexpensive, But it also

503
00:30:05,196 --> 00:30:07,196
Speaker 3: has to be flexible. It has to be able to

504
00:30:07,276 --> 00:30:11,396
Speaker 3: run up and down, up and down quickly without failing,

505
00:30:11,596 --> 00:30:17,396
Speaker 3: damaging it or loss of efficiency. Today's equipment can't do either,

506
00:30:17,756 --> 00:30:20,836
Speaker 3: and so part of the reason that hydrogen is so

507
00:30:21,116 --> 00:30:25,436
Speaker 3: expensive to produce this way today is that not only

508
00:30:25,476 --> 00:30:30,036
Speaker 3: are you using that intermittent, effectively free power, but you're

509
00:30:30,076 --> 00:30:33,676
Speaker 3: also drawing power from the grid to keep the equipment running,

510
00:30:35,076 --> 00:30:37,836
Speaker 3: and that drives up the cost of the power. The

511
00:30:37,916 --> 00:30:40,636
Speaker 3: power costs is about half of the hydrogen production cost,

512
00:30:41,116 --> 00:30:46,796
Speaker 3: so that's half the half. The other half of the

513
00:30:46,836 --> 00:30:49,556
Speaker 3: half is it comes from the equipment actually being a

514
00:30:49,596 --> 00:30:50,236
Speaker 3: lot cheaper.

515
00:30:50,636 --> 00:30:51,836
Speaker 1: And the way we do.

516
00:30:51,796 --> 00:30:55,716
Speaker 3: Both of these things is the fundamental physics of the device.

517
00:30:55,836 --> 00:30:59,796
Speaker 3: So we're a bunch of super nerdy like semiconductor device

518
00:30:59,836 --> 00:31:03,476
Speaker 3: physics and chemist kind of people, and we spent the

519
00:31:03,516 --> 00:31:05,956
Speaker 3: first couple of years of the company in the lab

520
00:31:06,276 --> 00:31:11,276
Speaker 3: basically reinventing this simple, simple device that you saw in

521
00:31:11,316 --> 00:31:13,716
Speaker 3: your high school chem lab. Right the two wires that

522
00:31:13,756 --> 00:31:16,716
Speaker 3: make the bubbles we electualizer.

523
00:31:16,756 --> 00:31:18,636
Speaker 2: We can use this piece of jargon, right, it's the

524
00:31:18,716 --> 00:31:20,796
Speaker 2: electoral yea, yeah.

525
00:31:20,556 --> 00:31:21,276
Speaker 1: Yeah, yeah yeah.

526
00:31:21,636 --> 00:31:23,396
Speaker 3: So we we came up with a way to make

527
00:31:23,436 --> 00:31:28,076
Speaker 3: the electoralizer much much cheaper, not not by using cheaper materials,

528
00:31:28,116 --> 00:31:32,796
Speaker 3: but by actually increasing the through but the amount of

529
00:31:32,916 --> 00:31:37,796
Speaker 3: hydrogen that can be produced from the object. Since then,

530
00:31:38,636 --> 00:31:41,876
Speaker 3: in the subsequent two years and more recently, we commercialized that.

531
00:31:42,556 --> 00:31:46,196
Speaker 3: Our product is it's a big product. It's funny to

532
00:31:46,236 --> 00:31:48,796
Speaker 3: call it a product. It's about an acre in size.

533
00:31:49,196 --> 00:31:53,116
Speaker 3: It's a it's a plant. So if you've ever driven

534
00:31:53,156 --> 00:31:56,716
Speaker 3: around parts of Texas, you've seen like small chemical plants,

535
00:31:56,716 --> 00:31:59,236
Speaker 3: not pap refineries, but small ones. It looks kind of

536
00:31:59,236 --> 00:32:01,436
Speaker 3: like one of those is a bunch of piping and plumbing.

537
00:32:01,876 --> 00:32:04,956
Speaker 3: At the heart of it is this electrilizer, which is

538
00:32:04,996 --> 00:32:08,036
Speaker 3: the thing we manufacture ourselves that does all the work

539
00:32:08,076 --> 00:32:12,436
Speaker 3: and the recip the equipment around it, gathers the hydrogen,

540
00:32:14,116 --> 00:32:19,436
Speaker 3: purifies it, and puts it out in a pipe. So

541
00:32:19,596 --> 00:32:22,036
Speaker 3: we figured out how to make that really cheap. Half

542
00:32:22,076 --> 00:32:22,756
Speaker 3: the cost.

543
00:32:24,076 --> 00:32:28,676
Speaker 2: And the electoralizer itself, Like, what's it look like? How

544
00:32:28,676 --> 00:32:29,756
Speaker 2: big is it?

545
00:32:29,756 --> 00:32:34,036
Speaker 3: It looks about like it's about the size of a refrigerator,

546
00:32:35,156 --> 00:32:36,836
Speaker 3: an American refrigerator.

547
00:32:36,316 --> 00:32:37,156
Speaker 1: Not the little European.

548
00:32:39,636 --> 00:32:44,116
Speaker 3: Yeah, and it looks you know, it doesn't look too

549
00:32:44,236 --> 00:32:48,036
Speaker 3: it's kind of a rectangular box, you know, it's it's

550
00:32:48,116 --> 00:32:51,596
Speaker 3: not very interesting to look at, frankly, And when it's running,

551
00:32:52,356 --> 00:32:54,996
Speaker 3: it just sits there. It doesn't make any noise, it

552
00:32:55,036 --> 00:32:58,476
Speaker 3: doesn't move, there's no robots or anything. There's a bunch

553
00:32:58,476 --> 00:33:01,396
Speaker 3: of water running through it. There's pumps make a bunch

554
00:33:01,436 --> 00:33:04,876
Speaker 3: of noise. There's water running through it and outcomes water

555
00:33:04,956 --> 00:33:07,476
Speaker 3: and gas, water and oxygen in one pipe, water and

556
00:33:07,556 --> 00:33:10,196
Speaker 3: hydrogen in the other pipe. And then there's a bunch

557
00:33:10,196 --> 00:33:13,276
Speaker 3: of vessels and pipes that separate the gases from the

558
00:33:13,276 --> 00:33:16,876
Speaker 3: water and purify them and send them out to be used.

559
00:33:17,476 --> 00:33:21,596
Speaker 3: So it's it's a very you know if if you're

560
00:33:21,756 --> 00:33:25,396
Speaker 3: a geek like me, it's really impressive. If you're just

561
00:33:25,476 --> 00:33:27,596
Speaker 3: walking by one and you see it, you'd go, huh,

562
00:33:27,756 --> 00:33:31,196
Speaker 3: what's that. It's kind of unimpressive, which is how you

563
00:33:31,236 --> 00:33:33,436
Speaker 3: want one of these things to be. For sure, want

564
00:33:33,516 --> 00:33:37,916
Speaker 3: any you know, any drama when you're when you're converting

565
00:33:37,956 --> 00:33:39,396
Speaker 3: power to hydrogen, well.

566
00:33:39,276 --> 00:33:42,116
Speaker 2: And especially with hydrogen, right, like I mean, I don't

567
00:33:42,116 --> 00:33:45,076
Speaker 2: want to yeah, yeah, talking about things blowing up, but

568
00:33:45,196 --> 00:33:46,396
Speaker 2: hydrogen can blow up.

569
00:33:46,516 --> 00:33:50,676
Speaker 3: Right. Actually, let's let me take a moment here, because

570
00:33:50,756 --> 00:33:53,676
Speaker 3: there's a lot of talk about that are in the US.

571
00:33:53,716 --> 00:33:56,756
Speaker 3: Our new president elect even made some comments about that

572
00:33:57,316 --> 00:34:01,556
Speaker 3: hydrogen is no more explosive than gasoline vapor or natural

573
00:34:01,636 --> 00:34:04,996
Speaker 3: gas vapor. So we already know how to handle things

574
00:34:05,036 --> 00:34:07,716
Speaker 3: that blow up when you when you spark them, and

575
00:34:07,876 --> 00:34:10,116
Speaker 3: hydrogen is kind of us like those things.

576
00:34:10,596 --> 00:34:10,796
Speaker 1: Yeah.

577
00:34:12,076 --> 00:34:15,996
Speaker 2: Fair, So, so, how many of these acre sized plants

578
00:34:16,436 --> 00:34:17,316
Speaker 2: exist in the world.

579
00:34:18,676 --> 00:34:23,036
Speaker 3: Well, we are building our first one now and it'll

580
00:34:23,116 --> 00:34:26,996
Speaker 3: be installed next year in an undisclosed location in Texas

581
00:34:27,796 --> 00:34:28,996
Speaker 3: for a customer of ours.

582
00:34:29,476 --> 00:34:31,436
Speaker 1: So we're we're super excited.

583
00:34:31,476 --> 00:34:34,516
Speaker 3: You know, in the life cycle of a startup, this

584
00:34:34,716 --> 00:34:39,396
Speaker 3: is an incredible moment where you know, we've we've gone

585
00:34:39,396 --> 00:34:43,316
Speaker 3: from the laboratory to kind of a pilot scale operation

586
00:34:44,156 --> 00:34:47,876
Speaker 3: and now we're building the first real one and uh

587
00:34:48,316 --> 00:34:50,796
Speaker 3: and you know, all eyes are on it, and uh,

588
00:34:51,396 --> 00:34:54,676
Speaker 3: we're just goes down executing and building it. You know,

589
00:34:54,756 --> 00:34:58,516
Speaker 3: once we get the first one proven and running effectively,

590
00:34:58,596 --> 00:35:02,036
Speaker 3: which will be next year, then you know we expect

591
00:35:02,316 --> 00:35:06,796
Speaker 3: to to be uh, you know, super viable in the

592
00:35:06,836 --> 00:35:08,996
Speaker 3: market because our price point is so compelling.

593
00:35:10,836 --> 00:35:12,596
Speaker 2: What are you going to do with the hydrogen you

594
00:35:12,676 --> 00:35:13,436
Speaker 2: make in Texas?

595
00:35:14,436 --> 00:35:17,676
Speaker 3: So I can't tell you because the deal isn't announced yet,

596
00:35:19,356 --> 00:35:25,076
Speaker 3: but it's exciting. It's a fuel that's going to be

597
00:35:25,156 --> 00:35:26,516
Speaker 3: produced using the hydrogen.

598
00:35:27,036 --> 00:35:29,356
Speaker 2: You can't tell me specifically what this first one's going

599
00:35:29,436 --> 00:35:32,476
Speaker 2: to do, fine, but you know, we talked about this

600
00:35:32,596 --> 00:35:35,916
Speaker 2: whole kind of range of things one might do with hydrogen.

601
00:35:37,156 --> 00:35:42,556
Speaker 2: What are some of the sort of relatively easier applications, Like,

602
00:35:42,596 --> 00:35:44,756
Speaker 2: what's the low hanging fruit for green hydrogen? What's the

603
00:35:44,796 --> 00:35:45,436
Speaker 2: first thing you can do?

604
00:35:45,436 --> 00:35:46,316
Speaker 1: Why can you do it tomorrow?

605
00:35:47,036 --> 00:35:51,036
Speaker 3: Yeah, So everybody in our industry likes to think that ammonia,

606
00:35:51,076 --> 00:35:55,236
Speaker 3: which is fertilizer, is the first thing it uses hydrogen today,

607
00:35:55,676 --> 00:35:58,676
Speaker 3: That hydrogen is made from natural gas usually, so why

608
00:35:58,716 --> 00:36:02,196
Speaker 3: not just replace that that dirty hydrogen with this clean stuff?

609
00:36:02,276 --> 00:36:02,396
Speaker 1: Right?

610
00:36:04,236 --> 00:36:07,636
Speaker 3: The reason ammonia isn't happening super fast right now is

611
00:36:07,756 --> 00:36:14,916
Speaker 3: because they're relatively little incentive to decarganives ammoniah. No one's

612
00:36:14,956 --> 00:36:21,796
Speaker 3: willing to pay extra for clean fertilizer because food, food security,

613
00:36:21,876 --> 00:36:25,916
Speaker 3: food cost is super politically charged, and obviously right that

614
00:36:26,196 --> 00:36:31,156
Speaker 3: that's nowhere that's not a place policy makers want to go. Potentially,

615
00:36:31,236 --> 00:36:35,196
Speaker 3: even in Europe. We'll see. So it turns out the

616
00:36:35,276 --> 00:36:40,396
Speaker 3: low hanging fruit might be economically or politically one of

617
00:36:40,476 --> 00:36:41,596
Speaker 3: the last.

618
00:36:41,356 --> 00:36:42,756
Speaker 1: Things to be done.

619
00:36:43,516 --> 00:36:48,156
Speaker 2: So now we got to do politico techno economics, political economy,

620
00:36:48,276 --> 00:36:49,996
Speaker 2: techno economics. I got to figure that one out.

621
00:36:50,076 --> 00:36:52,116
Speaker 1: But yeah, okay, go on, and when you figure that out,

622
00:36:52,156 --> 00:36:54,756
Speaker 1: tell me, because I need the I need. It's an interest, right.

623
00:36:55,236 --> 00:36:58,556
Speaker 2: Political economy is an underused phrase, but we want to

624
00:36:58,636 --> 00:37:03,076
Speaker 2: get tech political technoic, political techno economy. It's not Yeah, okay,

625
00:37:03,116 --> 00:37:05,036
Speaker 2: so what are you going to do? Not fertilizer, but what.

626
00:37:05,716 --> 00:37:09,076
Speaker 3: Yeah, so, so I'll rattle off the list of things

627
00:37:09,356 --> 00:37:15,916
Speaker 3: that are very active today, ironically decarbonizing. The hydrogen input

628
00:37:16,076 --> 00:37:19,396
Speaker 3: to refineries in Europe is very active.

629
00:37:20,836 --> 00:37:24,796
Speaker 2: Refineries like oil refineries that are making whatever.

630
00:37:24,996 --> 00:37:27,236
Speaker 3: Yeah, that's right, what am I talking about here? So

631
00:37:27,716 --> 00:37:30,836
Speaker 3: a significant part of the of the CO two emissions

632
00:37:30,836 --> 00:37:34,516
Speaker 3: from a refinery itself are from the production of hydrogen,

633
00:37:34,596 --> 00:37:39,436
Speaker 3: which is used to refine oil. So hydrogen is used

634
00:37:39,476 --> 00:37:44,076
Speaker 3: for desulfurization, hydro cracking. It's like it's a big input

635
00:37:44,156 --> 00:37:48,116
Speaker 3: to employ refine. So there are incentives in place to

636
00:37:48,516 --> 00:37:52,956
Speaker 3: gradually decarbonize the refinery itself. Of course, it doesn't do

637
00:37:53,116 --> 00:37:56,756
Speaker 3: much to decarbonize the use of the fuel at the

638
00:37:56,836 --> 00:37:59,276
Speaker 3: other end, but it's a start and it.

639
00:37:59,316 --> 00:38:02,076
Speaker 2: Can help you scale, right, Presumably anything that can get

640
00:38:02,116 --> 00:38:05,756
Speaker 2: you building is good. Now you need a job in policy,

641
00:38:07,316 --> 00:38:07,956
Speaker 2: God forbid.

642
00:38:09,796 --> 00:38:11,556
Speaker 1: But that's exactly right. That's the motivation.

643
00:38:11,756 --> 00:38:16,396
Speaker 3: It seems counterintuitive to try to decarbonize a oil refinery,

644
00:38:16,996 --> 00:38:22,196
Speaker 3: but because they consume hydrogen today, it is an obvious

645
00:38:22,276 --> 00:38:27,956
Speaker 3: place for policy makers to incentivize the scaling up of

646
00:38:28,076 --> 00:38:29,276
Speaker 3: the green hydrogen industry.

647
00:38:29,636 --> 00:38:31,276
Speaker 1: So that's exactly right. You nailed it.

648
00:38:32,396 --> 00:38:37,356
Speaker 3: Green steel, I already mentioned that one. So there's multiple active,

649
00:38:37,716 --> 00:38:41,716
Speaker 3: big projects in the world, predominant in Europe to convert

650
00:38:41,796 --> 00:38:46,796
Speaker 3: steel production from coal super dirty to green hydrogen super

651
00:38:46,836 --> 00:38:53,756
Speaker 3: clean methanol. Methanol is both the chemical input to plastics,

652
00:38:53,796 --> 00:38:59,356
Speaker 3: as I mentioned, but also is the favorite fuel for

653
00:38:59,476 --> 00:39:05,596
Speaker 3: the decarbonization of shipping. So big shippers like Marisk probably

654
00:39:05,596 --> 00:39:07,836
Speaker 3: heard of them, you've seen their name on shipping containers.

655
00:39:09,196 --> 00:39:12,716
Speaker 3: They are building multi fuel ships now which can burn

656
00:39:13,036 --> 00:39:16,156
Speaker 3: both conventional fuel which is super dirty. It's called bunker fuel.

657
00:39:16,396 --> 00:39:18,116
Speaker 3: It's like the sludge that comes at the bottom of

658
00:39:18,196 --> 00:39:23,076
Speaker 3: a refinery called but also can burn methanol and so

659
00:39:23,516 --> 00:39:26,996
Speaker 3: green methanol emethanol some people call it, which is made

660
00:39:27,036 --> 00:39:32,356
Speaker 3: from green hydrogen, is like a favorite pathway for decombanizational shipping.

661
00:39:34,596 --> 00:39:36,716
Speaker 3: Those are the things that are doing. Another another one

662
00:39:36,956 --> 00:39:39,476
Speaker 3: is SAFF sustainable aviation fuel.

663
00:39:39,956 --> 00:39:40,516
Speaker 1: So what is that.

664
00:39:40,676 --> 00:39:45,276
Speaker 3: It's kerosene. Basically it's fancy kerosene. And what is kerosene?

665
00:39:45,316 --> 00:39:49,636
Speaker 3: It's a hydrocarden. It's just it's like gasoline but heavier.

666
00:39:50,996 --> 00:39:53,796
Speaker 3: And so that can also be made from CO two

667
00:39:54,236 --> 00:39:57,676
Speaker 3: biogenic CO two and hydrogen, or it can be made

668
00:39:57,796 --> 00:40:02,676
Speaker 3: as is being done in Europe today from used cooking

669
00:40:02,756 --> 00:40:08,476
Speaker 3: oil and other biological waste and hydrogen in a specialized refinery.

670
00:40:10,116 --> 00:40:15,516
Speaker 2: So what are you worried about right now? Not about

671
00:40:15,556 --> 00:40:18,876
Speaker 2: the world, but about your company? Like you're right at

672
00:40:18,916 --> 00:40:21,956
Speaker 2: this moment, you're building first commercial plant, you have a

673
00:40:22,036 --> 00:40:25,036
Speaker 2: lot of investment. Like what's at the top of your

674
00:40:25,116 --> 00:40:26,116
Speaker 2: list of things to worry about?

675
00:40:27,596 --> 00:40:32,996
Speaker 3: Yeah, So, as a described like this moment for a

676
00:40:33,076 --> 00:40:38,236
Speaker 3: technology company going from lab and concept to actual product

677
00:40:38,276 --> 00:40:42,356
Speaker 3: in the field is probably the riskiest and most delicate

678
00:40:42,476 --> 00:40:46,556
Speaker 3: moment in a company's life cycle. Why is that because

679
00:40:47,076 --> 00:40:50,476
Speaker 3: to do what we're doing and to actually deploy commercially,

680
00:40:51,036 --> 00:40:52,916
Speaker 3: you have to be at a big enough scale to

681
00:40:53,036 --> 00:40:55,516
Speaker 3: do that, and that means you're spending a lot of money.

682
00:40:56,116 --> 00:41:01,036
Speaker 3: And so if you don't get it perfectly right the ramifications,

683
00:41:01,356 --> 00:41:05,076
Speaker 3: it can be painful. So that's kind of a generic answer.

684
00:41:05,716 --> 00:41:11,916
Speaker 3: The bigger worry for me is the stability of policy,

685
00:41:13,396 --> 00:41:18,556
Speaker 3: not just in the US but globally around decargonization. And

686
00:41:18,796 --> 00:41:21,996
Speaker 3: you know why am I concerned about that because we've

687
00:41:22,036 --> 00:41:24,116
Speaker 3: seen it before. We've seen it and you mentioned the

688
00:41:24,196 --> 00:41:27,516
Speaker 3: German feed and tariff, the German feed and tariff experience,

689
00:41:27,676 --> 00:41:30,836
Speaker 3: that's what created the solar industry. But then it also

690
00:41:30,956 --> 00:41:36,756
Speaker 3: got retracted suddenly. Why because of political change within Germany. Wow,

691
00:41:36,996 --> 00:41:39,236
Speaker 3: this is costing the taxpayers a lot. And there was

692
00:41:39,316 --> 00:41:42,956
Speaker 3: a there was a move to the right in Germany

693
00:41:43,036 --> 00:41:46,996
Speaker 3: and like so the you know, the feed and traff

694
00:41:47,156 --> 00:41:52,236
Speaker 3: was was revoked while I'm down, and that was a

695
00:41:52,836 --> 00:41:56,676
Speaker 3: near death experience for the solar industry. The same thing

696
00:41:56,756 --> 00:42:00,916
Speaker 3: can happen to us because we are, we are in

697
00:42:00,996 --> 00:42:05,356
Speaker 3: the early days of this industry extremely policy sensitive or

698
00:42:05,436 --> 00:42:09,996
Speaker 3: policy dependent. Now you know at electric high are like

699
00:42:10,196 --> 00:42:14,956
Speaker 3: literal goal is to be independent of policy. Sure, success

700
00:42:15,076 --> 00:42:20,316
Speaker 3: for us looks like we are economic economically competitive without

701
00:42:20,356 --> 00:42:21,396
Speaker 3: any policy support.

702
00:42:21,676 --> 00:42:23,596
Speaker 2: You want to be where solar power is now, Like

703
00:42:23,876 --> 00:42:26,196
Speaker 2: nobody's going to stop solar now because it's the cheapest.

704
00:42:26,316 --> 00:42:28,756
Speaker 2: Like you don't need to special rules, it's just cheaper.

705
00:42:29,396 --> 00:42:31,356
Speaker 2: You got to just go to the store and buy

706
00:42:31,436 --> 00:42:34,036
Speaker 2: solar panels and get their electricity.

707
00:42:34,276 --> 00:42:34,676
Speaker 1: You got it.

708
00:42:35,116 --> 00:42:38,716
Speaker 3: And that's what success looks like. But we're competing against

709
00:42:38,716 --> 00:42:40,876
Speaker 3: an industry that's gone down its learning curve for the

710
00:42:40,956 --> 00:42:45,116
Speaker 3: last hundred years, and so to compete with that like

711
00:42:45,276 --> 00:42:48,316
Speaker 3: economically naturally right out of the gate, it's too much.

712
00:42:48,196 --> 00:42:50,676
Speaker 2: To ask me the fossil fuel industry.

713
00:42:50,916 --> 00:42:53,116
Speaker 3: Yeah, the fossil fuel industry. Yeah, yeah, so we need

714
00:42:53,156 --> 00:42:53,716
Speaker 3: a little time.

715
00:42:54,076 --> 00:42:56,036
Speaker 2: How much time? What's your guess?

716
00:42:57,356 --> 00:42:59,516
Speaker 1: I think we can get there about twenty thirty. That's

717
00:42:59,636 --> 00:43:01,916
Speaker 1: certainly fast, that's certainly ourgue.

718
00:43:02,756 --> 00:43:05,636
Speaker 3: Yeah, it's fast, but it's a lifetime in terms of

719
00:43:05,956 --> 00:43:09,636
Speaker 3: political wins and in terms of like a startup company.

720
00:43:10,156 --> 00:43:11,716
Speaker 1: Yeah, you know, crossing.

721
00:43:11,436 --> 00:43:13,636
Speaker 2: Capital capital intensive Yeah.

722
00:43:13,676 --> 00:43:17,676
Speaker 3: Yeah, yeah, exactly, yeah exactly. So that's what worries me.

723
00:43:18,596 --> 00:43:21,716
Speaker 2: Yeah, Well, you just got to make it five years. Man,

724
00:43:21,796 --> 00:43:24,436
Speaker 2: if you're right, but five years a long time, especially

725
00:43:24,556 --> 00:43:25,116
Speaker 2: right now.

726
00:43:25,476 --> 00:43:27,556
Speaker 1: It's doubling my life. That's doubling my life.

727
00:43:31,436 --> 00:43:34,116
Speaker 2: Okay, So that's what's to worry about. Give me the

728
00:43:34,236 --> 00:43:38,436
Speaker 2: happy twenty thirty story. If if things, if you don't,

729
00:43:38,556 --> 00:43:40,556
Speaker 2: if you make it to twenty thirty and you and

730
00:43:40,676 --> 00:43:42,636
Speaker 2: it works out like you hope, what's what's it look like?

731
00:43:42,716 --> 00:43:44,596
Speaker 2: What's the company look like? And what's the world look like.

732
00:43:45,316 --> 00:43:50,196
Speaker 3: We're we're selling tens of gigawaps a year of electoralizers,

733
00:43:50,876 --> 00:43:54,636
Speaker 3: but more important, we're ramping up fast, which means where

734
00:43:54,836 --> 00:43:59,156
Speaker 3: you know, ideally doubling capacity every year to meet the

735
00:44:00,076 --> 00:44:05,556
Speaker 3: demand for global projects to produce green hydrogen. The world

736
00:44:05,676 --> 00:44:11,996
Speaker 3: looks like it's it's ramping green hydrogen production at a

737
00:44:12,156 --> 00:44:17,356
Speaker 3: rate at which it will start to become relevant kind

738
00:44:17,396 --> 00:44:20,476
Speaker 3: of relative to the fossil industry in a matter of

739
00:44:20,796 --> 00:44:21,996
Speaker 3: years or a decade.

740
00:44:22,516 --> 00:44:26,316
Speaker 2: Yeah, and tell me in five or ten years, like,

741
00:44:26,916 --> 00:44:30,876
Speaker 2: what are the places where there might be sort of

742
00:44:31,196 --> 00:44:35,996
Speaker 2: meaningfully significant use of green hydrogen in industrial processes?

743
00:44:36,636 --> 00:44:36,836
Speaker 1: Yeah?

744
00:44:36,916 --> 00:44:41,196
Speaker 3: So in five years, certainly in southern Europe, where solar

745
00:44:41,276 --> 00:44:45,836
Speaker 3: and wind are plentiful and available, North Africa, which is

746
00:44:46,276 --> 00:44:51,316
Speaker 3: really well positioned to supply Europe and has incredible solar

747
00:44:51,396 --> 00:44:58,436
Speaker 3: and wind resource. Texas and kind of yeah, Texas, Louisiana,

748
00:44:58,556 --> 00:45:02,716
Speaker 3: Oklahoma again, and the wind belt in the US are

749
00:45:02,996 --> 00:45:07,476
Speaker 3: like ideal places for the production of the molecules. You

750
00:45:07,596 --> 00:45:12,956
Speaker 3: look at places like Chile interesting because the Autocoma Desert

751
00:45:13,276 --> 00:45:17,476
Speaker 3: has both wind and solar and the combination is extremely inexpensive.

752
00:45:20,116 --> 00:45:23,556
Speaker 3: Those in the Middle East. It can't not mention the

753
00:45:23,596 --> 00:45:24,116
Speaker 3: Middle East.

754
00:45:24,716 --> 00:45:28,196
Speaker 2: That's the supply side, that's where you're making all this hydrogen.

755
00:45:28,236 --> 00:45:30,356
Speaker 2: And then what's the demand side look like? In five years,

756
00:45:30,836 --> 00:45:32,476
Speaker 2: who's buying it? What are they doing with it?

757
00:45:32,836 --> 00:45:37,516
Speaker 3: Yeah, in five years, the demand side is largely Europe, Japan.

758
00:45:37,476 --> 00:45:40,556
Speaker 2: Korea, because that's where the incentives are in place.

759
00:45:40,676 --> 00:45:46,276
Speaker 3: Basically, it's that's where the problem is hardest to solve.

760
00:45:46,356 --> 00:45:49,396
Speaker 3: They have the biggest problem. And it's not just incentives.

761
00:45:49,516 --> 00:45:51,196
Speaker 3: Like when I say the problem to solve.

762
00:45:51,236 --> 00:45:53,916
Speaker 2: They're most reliant on imported fossil fuel.

763
00:45:54,276 --> 00:45:55,556
Speaker 1: You got it, you got it.

764
00:45:55,676 --> 00:45:58,916
Speaker 3: So it turns out to not just be a decarbanization problem,

765
00:45:59,036 --> 00:46:00,956
Speaker 3: it's also an energy security problem.

766
00:46:01,196 --> 00:46:04,076
Speaker 2: But that's good for you, that's good for you. On

767
00:46:04,196 --> 00:46:07,716
Speaker 2: the policy side, because there's more like short term self

768
00:46:07,796 --> 00:46:11,396
Speaker 2: interest as a term of localized self interest in figuring

769
00:46:11,396 --> 00:46:12,516
Speaker 2: out how to make hydrogen or.

770
00:46:12,516 --> 00:46:15,116
Speaker 3: One hundred percent. So those places make a lot of

771
00:46:15,156 --> 00:46:16,876
Speaker 3: sense in the five year timeframe. In the ten year

772
00:46:16,996 --> 00:46:21,276
Speaker 3: time frame again, you know, we come close, even come

773
00:46:21,396 --> 00:46:23,796
Speaker 3: close to meeting our goals, and we're going to be

774
00:46:24,316 --> 00:46:28,276
Speaker 3: knocking on the door of parity in cost with fossil resources.

775
00:46:28,316 --> 00:46:30,716
Speaker 1: And so I think the market is truly global.

776
00:46:31,876 --> 00:46:34,756
Speaker 2: And just list off some of the things, not the places,

777
00:46:34,836 --> 00:46:37,356
Speaker 2: but some of the things that people will be using

778
00:46:38,876 --> 00:46:42,076
Speaker 2: your hydrogen four clean hydrogen four in five or ten years.

779
00:46:42,116 --> 00:46:50,076
Speaker 3: Oh yeah, easy, so steal cement, ammonia, fertilizer, shipping fuel,

780
00:46:50,436 --> 00:46:56,676
Speaker 3: aviation fuel, chemicals like methanol. Those are the easy ones.

781
00:46:57,476 --> 00:47:00,316
Speaker 2: And all of those industries, I mean, those industries together

782
00:47:00,396 --> 00:47:04,036
Speaker 2: make up a very large chunk of of carbon emissions.

783
00:47:04,476 --> 00:47:08,596
Speaker 3: Yeah, the ones I rattled off probably thirty to forty percent.

784
00:47:09,196 --> 00:47:13,236
Speaker 2: Yeah, and it's the thirty to that seems really hard

785
00:47:13,356 --> 00:47:16,276
Speaker 2: right now. Right it's not the like, oh, great solar

786
00:47:16,356 --> 00:47:19,676
Speaker 2: power and batteries for people's houses and cars like that

787
00:47:19,796 --> 00:47:21,836
Speaker 2: part we've actually kind of got, which is good. And

788
00:47:21,876 --> 00:47:22,836
Speaker 2: so you're doing the hard part.

789
00:47:23,436 --> 00:47:24,836
Speaker 1: Yep, consider.

790
00:47:29,476 --> 00:47:31,476
Speaker 2: You'll be back in a minute with the lightning round.

791
00:47:33,836 --> 00:47:45,996
Speaker 2: M let's finish with lightning round. What's your second favorite element?

792
00:47:47,396 --> 00:47:52,996
Speaker 3: Ooh, my second favorite element? Yeah, that's a great question.

793
00:47:53,076 --> 00:47:54,156
Speaker 3: I'd say carby.

794
00:47:55,836 --> 00:47:59,076
Speaker 2: Interesting just as a as a human, as an organism

795
00:47:59,196 --> 00:48:00,036
Speaker 2: or why why carbon?

796
00:48:01,156 --> 00:48:05,196
Speaker 3: Well it came to mind because because hydrocarbons are awesome,

797
00:48:05,516 --> 00:48:07,196
Speaker 3: we just need to make them clean.

798
00:48:07,876 --> 00:48:08,076
Speaker 1: Yeah.

799
00:48:08,876 --> 00:48:12,196
Speaker 2: Uh. What do you think is the most underrated power

800
00:48:12,316 --> 00:48:13,436
Speaker 2: tool for home use?

801
00:48:14,476 --> 00:48:14,676
Speaker 1: Yeah?

802
00:48:14,836 --> 00:48:18,716
Speaker 3: So I have a battery powered Makita angle grinder that

803
00:48:18,836 --> 00:48:22,316
Speaker 3: I use all the time, and it's parguing me.

804
00:48:22,396 --> 00:48:24,236
Speaker 1: One of my favorite tools. Yeah.

805
00:48:24,316 --> 00:48:26,556
Speaker 3: Last time I used it, I used it to cut

806
00:48:26,636 --> 00:48:28,476
Speaker 3: off a hard to reach metal bolt.

807
00:48:29,236 --> 00:48:32,396
Speaker 2: Oh I love that. Okay, where there's sparks. Sounds like

808
00:48:32,476 --> 00:48:33,636
Speaker 2: it makes lots of sparks.

809
00:48:33,876 --> 00:48:35,916
Speaker 1: That's good. It's one of the reasons it's one of

810
00:48:35,996 --> 00:48:36,796
Speaker 1: my favorite tools.

811
00:48:37,316 --> 00:48:40,916
Speaker 2: Is it looks cool? What's your favorite song right now

812
00:48:41,036 --> 00:48:42,356
Speaker 2: to listen to very loud?

813
00:48:44,356 --> 00:48:51,476
Speaker 3: Ooh, led Zeppelin, Bronnie or stab Great. Just makes me

814
00:48:51,636 --> 00:48:53,956
Speaker 3: happy every time I listen to it. It just makes

815
00:48:53,996 --> 00:48:54,476
Speaker 3: me happy.

816
00:48:54,876 --> 00:48:56,636
Speaker 2: Make you feel twenty? I think if I put that

817
00:48:56,756 --> 00:48:59,236
Speaker 2: song on it would make me feel twenty, or at

818
00:48:59,316 --> 00:49:01,476
Speaker 2: least make me remember feeling twenty.

819
00:49:01,556 --> 00:49:04,596
Speaker 1: And feeling twenty makes me happy. Yeah, that's nice.

820
00:49:05,356 --> 00:49:07,796
Speaker 2: Probably, probably it would probably make me happier than I

821
00:49:07,916 --> 00:49:08,836
Speaker 2: actually felt when I was.

822
00:49:08,836 --> 00:49:11,956
Speaker 1: Two, which is yeah, I think that. Well, yeah, it's

823
00:49:12,196 --> 00:49:13,716
Speaker 1: definitely last one.

824
00:49:15,116 --> 00:49:16,996
Speaker 2: I read in the Wall Street Journal that your co

825
00:49:17,236 --> 00:49:22,556
Speaker 2: founder keeps quote a secret document of the company's failures

826
00:49:22,636 --> 00:49:27,196
Speaker 2: and fixes that only top engineers can access and that

827
00:49:27,356 --> 00:49:31,356
Speaker 2: you cannot access. Did you know about this? Did you

828
00:49:31,476 --> 00:49:33,356
Speaker 2: learn about it by reading the Wall Street Journal?

829
00:49:36,036 --> 00:49:38,236
Speaker 3: I don't know if that was a misquote or not,

830
00:49:38,556 --> 00:49:42,196
Speaker 3: but yeah, it's actually not true, but it was a

831
00:49:42,316 --> 00:49:43,236
Speaker 3: nice piece of story.

832
00:49:43,436 --> 00:49:43,996
Speaker 1: Are you sure?

833
00:49:44,156 --> 00:49:46,276
Speaker 2: Are you sure or are they just telling you that

834
00:49:46,396 --> 00:49:46,996
Speaker 2: at the company?

835
00:49:47,116 --> 00:49:47,316
Speaker 1: Maybe?

836
00:49:47,436 --> 00:49:50,076
Speaker 2: Like, no, no, the journal got that wrong. There was

837
00:49:50,156 --> 00:49:51,556
Speaker 2: no secret document.

838
00:49:51,516 --> 00:49:53,796
Speaker 1: With my co founder Dave. You never actually know.

839
00:49:54,436 --> 00:50:01,276
Speaker 2: Okay, keeps it interesting? Anything else we should talk about.

840
00:50:02,356 --> 00:50:13,516
Speaker 2: It's been great, Yeah, really is super fun. Rafy Garabedian

841
00:50:13,636 --> 00:50:18,196
Speaker 2: is the co founder and CEO of Electric Hydrogen. Today's

842
00:50:18,236 --> 00:50:21,676
Speaker 2: show was produced by Gabriel Hunter Chang. It was edited

843
00:50:21,716 --> 00:50:25,356
Speaker 2: by Lyddy jeene Kott and engineered by Sarah Bruguer. You

844
00:50:25,436 --> 00:50:29,196
Speaker 2: can email us at problem at Pushkin dot Fm. I'm

845
00:50:29,276 --> 00:50:31,676
Speaker 2: Jacob Goldstein and we'll be back next week with another

846
00:50:31,756 --> 00:50:32,996
Speaker 2: episode of What's Your Problem.