← Catalyst with Shayle Kann
Catalyst with Shayle Kann
Driving down the cost of green hydrogen
00:41:28
Why the hype faded and how to reach fossil parity
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- [00:00]
Host/Announcer
A very brief word before we start the show. We've got a survey for listeners of Catalyst and Open Circuit and we would be so grateful if you could take a few moments to fill it out. As our audience continues to expand, it's an opportunity to understand how and why you listen to our shows and it helps us continue bringing relevant content on the tech and markets you care about in clean energy. If you fill it out, you'll get a chance to win a $100 gift card from Amazon and you can find it@latitudemedia.com survey or or just click the survey link in the show Notes thank you so much.
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Sponsor/Advertisement Voice
Latitude Media Covering the new frontiers of the energy transition, I'm.
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Shayle Kann
Shel Khan and this is Catalyst.
- [00:44]
Rafi Garabedian
We do recognize, at least at Electric Hydrogen, that we've got to collapse costs towards what we call fossil parity for the molecules that we produce.
- [00:52]
Shayle Kann
Coming up, how to make Green hydrogen great again Or Great.
- [01:06]
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- [01:40]
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- [02:15]
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- [02:46]
Shayle Kann
I'm Shayl Khan. I lead the early stage venture strategy at Energy impact partners, welcome. So if you were to read the headlines over the past year or maybe 18 months, your impression of the state of the green hydrogen market might be kind of dim. After a classic hype cycle played out at hyperspeed, basically from around 2021 to, I would say 2024, reality very much set in for that nascent market. I think that reality check basically came in three forms. First, and in my mind, by far the most importantly, the actual delivered cost of green hydrogen from the first wave of projects that were being developed was far too high. Second, some of the markets that had been targeted, say light duty transportation or building heat, just didn't make much sense in the first place. And third, as has happened in a number of other sectors over the same period, there are the durability, scalability and magnitude of the so called green premium turned out to be less than advertised. So the result has been a clear removal of hype in that market. But just as a reminder, the market for hydrogen and the emissions associated with the production of that hydrogen is not going away anytime soon. We already have a $70 billion annual market using hydrogen in industry, predominantly in petrochemicals and ammonia production. And don't look now, but there is a new wave of technologies entering the market that has the promise to actually deliver on the cost reductions that the market was seeking all along. Rafi Garabedian, who's my guest today, is the CEO of Electric Hydrogen, one of those companies. He's been on the show before, years ago, but he's back now for an update and a fresh and sober look at where this market heads after its journey up and back down the hype cycle. As a reminder for disclosure, we at EIP are investors in Electric Hydrogen and I'm on the board of the company. Here's Rafi. Rafi, welcome back.
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Rafi Garabedian
Thank you. Shail, great to be here with you.
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Shayle Kann
Let's talk green Hydrogen. I want to start by having you give me your version of the history of the green hydrogen market, such as it is over, I don't know, let's say the last five years or so. You pick your time period where the.
- [04:53]
Rafi Garabedian
I was going to say, should I go back to Jimmy Carter or.
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Shayle Kann
Yeah, no, we don't need to talk about electrolysis in the 70s. But I think I can start with like, I mean, maybe around when you were starting to think about it, which is what, 5ish years ago, and then tell me what's happened in the market since then.
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Rafi Garabedian
Yeah, great. I think as, as you know, shale, I was in the solar industry up until the end of 2020. But it started to think about what can be done with renewable power beyond, beyond direct electrification. You know, getting more renewables onto the, onto the grid. And that that interest immediately leads to green hydrogen as the thing, as the precursor, the foundation of, of most power to X kind of ideas. So in, in late 2020, early 2021, I and my, my partners here at Electric Hydrogen started to think about how to make green hydrogen cheap. Really kind of approaching the problem from the context of renewable power, where cost reduction, rapid scaling and reduction in cost helped to create a robust market for, for commodity, in, in that case, electricity. And we thought the same thing should be true in green hydrogen and derivative molecules. So, you know, that that was a point in time, early 2021, when there was the inklings of hype around green hydrogen. But hype hadn't really hit us square in the face yet. I think it was more really in 2022, late 21, early 22, when things got really, really active. And in those days, green hydrogen was the solution to every problem everywhere in the world. It was going to change everything. I mean, even at cocktail parties, people who know nothing about energy would say, oh, you're in green hydrogen, that's great. Which is a sure sign that it's overhyped. Yeah.
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Shayle Kann
The second anybody asks me about something I do at a cocktail party, I know something's gone horribly wrong generally, which maybe implies something about AI today. But anyway, go on.
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Rafi Garabedian
Yeah, let's not go there. But yeah, since then, you know, so, so green hydrogen went through this just incredible ballooning of the bubble. And I would say since then, the bubble has burst. And, you know, I, I can't say whether right now we're at the nadir of green hydrogen hype or whether we're starting to come out of it. It feels like we are starting to come out of it now gradually. But those of you know the Gartner hype cycle know that the climb out of the trough of disillusionment is slow and gradual and long and arduous. I think that's where we're, where we are in this market today.
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Shayle Kann
And to what would you ascribe the bubble bursting? Like, fundamentally, why did it, I mean, all bubbles burst if they're bubbles, definitionally. But like, what made this bubble burst?
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Rafi Garabedian
Yeah, so great question. So why would the bubble burst? Well, what's green hydrogen all about? It's all about avoiding emissions in very hard to decarbonize sectors of the economy. Green hydrogen, unfortunately, has been and continues to be an expensive solution to those problems. Now, there's no cheap solution to those problems. It's worth pointing out, right, all solutions to those problems are expensive. But at the peak of the hype, there was a naive hope that society was willing to pay the difference for deep decarbonization because it had turned into a decarbonization, had turned into a global priority, right? We had kind of Europe, the us, Asia, everybody had a hydro, every country had a hydrogen strategy. The world's changed dramatically since then. And I think that political climate is resulting in a retraction from commitment to retooling critical industries at some expense for the purpose of decarbonization. Green hydrogen, it is also true, is expensive and it's been too expensive over the last few years. And it's been too expensive for a couple of reasons. If you look at the cost of making a kilogram of green hydrogen today, let's say in southern Europe, it might be unsubsidized, it might be maybe $6 US a kilo. I think rough numbers that might be about right. That can be broken down roughly 50, 50 into CapEx and OpEx. OpEx being the cost of the power going in to the process to make the hydrogen and Capex being the, the cost of carrying the capital, the cost of building the, the plant. Right. Now, remember, the power that goes into making green hydrogen is carried out chemically as hydrogen. So it's not lost power. It's power that's being transformed with some inefficiency. It's about 70 to 75% efficient process. So really it's a combination of those two things. And if we look at again, what's happened in the last few years on both of those fronts, we've had bad news. So green power, renewable power prices have gone up in many places in the world, driven by an imbalance in the supply and demand. So green power is much more expensive. And let's now switch to the US And I can give you real numbers. If you look in West Texas and you were to sign a solar and wind kind of affirmed green power purchase agreement in Texas, In ERCOT territory, three years ago, you might have paid $35amegawatt hour for that product. Today you're paying 65, maybe more dollars a megawatt hour. And that's driven by, broadly speaking, increase in electric demand, driven most notably by AI data center demand coming online or planned to be coming online. And we don't just see this in the US we see this many, many Places in the world we see where there is cheap power. Power prices have gone up dramatically. Green power prices have gone up dramatically because of new demand from data centers. So that's certainly a headwind for green hydrogen. But then on top of that you have the CapEx component of the levelized cost of hydrogen and that's the other half of its cost which, which has been extremely high and actually been going up rather than going down. So you'd like to think that as an industry gets its feet under it and starts to scale, starts to get past demo projects and building real scaled projects, costs come down. But actually people were maybe unrealistic about the cost that could be achieved, the capital costs that could be achieved, particularly by large western suppliers of technology like Siemens and thiessenkrupp. I'll just mention those two big names. I won't will mention all the rest when built by an EPC into a fully constructed project. So we've seen those capital costs go from, you know, an early promise of something like $1,500 a kilowatt buck 50 a watt to now even over $3 a watt of capital cost. So that's also had an escalating effect on the cost of green hydrogen. So bottom line, green hydrogen has gotten more expensive today than it was supposed to be two years ago.
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Shayle Kann
Okay. So I think people understand, although maybe generally don't appreciate the degree to which this electricity supply demand imbalance has led to higher wholesale power prices in general and prices for renewables. We've talked about that though before on the show and I think generally people understand it. The thing I think people don't really understand is like why is the CAPEX for, for electrolyzer, for electrolyzer systems. Why has it been, been so high? Can you break it down? Like what is the, what is the cost stack of a traditional electrolyzer project? And then you can briefly talk about like what electric hydrogen is doing differently there. But, but first I want to start with like $3 a watt. Like what happened here?
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Rafi Garabedian
Yeah, what happened at $3 a watt. So if you look at the cost stack of, of a conventional electrolyzer, you're a project developer, let's say in, in, in Spain and, and you're trying to build a electrolyzer someplace. Right. How are you going to go about doing it? You're going to contract with an epc, it's an engineer procure construct company. You're going to select your technology. Maybe you're going to. I mentioned two names before, so I'll pick One, you're going to maybe select Siemens, that's your technology provider, and you're going to go through what's called a feed study, which is front end engineering design. That's where the EPC takes all of the requirements from the equipment supplier, the technology supplier, and, and figures out how to build that thing on your site. Right. The total installed cost is what drives levelized cost of hydrogen. It doesn't matter what the electrolyzer costs per se. It matters what the constructed cost of the plant is. And in a typical project like we're discussing, roughly half of the total installed cost goes to the epc. What are they doing? They, they're grading the plot, they're managing stormwater, they're building the building that the electrolyzer is going to go into. They're building the substation, they're sourcing and selecting all of the support equipment, whether it's chillers or air compressors or backup power generators. They're sourcing and designing the control system for the plant. The list goes on and on. Okay, so the EPC has a substantial scope in the project. The electrolyzer supplier, their price might not have gone up. Their price might have been $1,000 a kilowatt, a dollar a watt for their scope. What is their scope? It's the stack. Often it's what's called the balance of stack, which is some of the plumbing and support equipment around the stack. And it might or might not include the rectifier, which is the power conversion equipment that takes the AC from the grid and converts it down to the DC power that the, that drives the stack to produce hydrogen. So the electrolyzer scope is pretty well defined. Those prices are pretty well defined. What's really ballooned out of proportion is the EPC or the construction costs.
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Shayle Kann
Okay, so how do you solve it? I mean, not just the epc, but they're tied to each other. What's the solution to the CAPEX problem? We could talk about what's the solution to the overall system cost? 2, but on the CAPEX side, how do you get away from this EPC ballooning and drive down the cost of the stack? Because I think you need to.
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Rafi Garabedian
Yeah. And I think it is important to talk about the overall solution cost as well, because they're not necessarily decoupled, but just starting with the capital cost, the secret to it, it's no secret, is to think at the system level holistically. So what are those, all of those costs? Maybe. Let me back up. When we think about, when we think about our product and the scope of our product and how we present it into the market. The, the guiding light for us, the North Star is levelized cost of hydrogen. So we think about it from the perspective of our customers, Project Performa. And when you look at the problem that way, you very quickly have to accept that the EPC cost must be in scope for your engineering team to try to address. Right. There's just a big chunk of cost that's being thrown to the wind, left to others to contend with. And you could throw your hands up and say, well, yeah, but there's nothing that can be done about that because construction costs, what construction costs. But it turns out that's not really the case. Now. There's a deep technology component to the solution, which is actually, quite simply put, making the electrolyzer as dense as possible. That enables the balance of plant construction to also be quite dense and small, and hence amenable to what's called modularization, which is just the chemical industry's terminology for moving the construction from the field to a factory where the costs can be well controlled and well managed. That's what we do at Electric Hydrogen. We build a fully modularized plant which leverages our extremely dense, powerful stack technology to bring a total solution to market that minimizes the EPC's cost and hence minimizes the total installed cost. And by the way, there's some other things that are kind of obvious that need to be done. For example, not having a building because buildings are very expensive, particularly buildings that house hazardous processes like hydrogen production.
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Shayle Kann
There's also the, the thing about the modularization piece that I want to get more specific about, because people use the term modularization constantly in everything that I spend time on. And in the context of green hydrogen world, there's sort of an even more extreme version of modularization as well. You could imagine building factory built small electrolyzer stacks and then numbering up. And so if you want to build a 100 megawatt project, you're going to build 101 megawatt electrolyzer stacks and then put them all in series, basically. That's not what you're talking about though. You're talking about modularizing something that is still basically at the scale of the chemical industry. Right. But can be, but is dense enough that it can be built off site and transported to site. So that is like a key distinction, I think, right?
- [19:18]
Rafi Garabedian
It absolutely is. Sh. And I, and I'll admit to you that early on in our company's history, we debated and analyzed both approaches because it is appealing to think you can build in a small package a thing that's, you know, maybe let's call it a 2 megawatt electrolyzer that's completely self contained and simply focus on cost reduction and automation, which is a small thing.
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Shayle Kann
You know, you said you spent a lot of time in solar. That's what worked in solar.
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Rafi Garabedian
Yeah, right.
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Shayle Kann
It's super modular.
- [19:48]
Rafi Garabedian
Actually. Let's. Yeah, yeah, yeah. It's actually interesting to take that solar analogy further actually. If we look at inverters in the solar industry, we've seen both approaches. We've seen large central inverters and we've seen more recently, like in the last decade, the, the advent of string inverters for large utility scale systems. And there was a lot of principled debate early on which one made more sense. And there are, there are good reasons to think string inverters could, could make a lot of sense in large solar arrays. Turns out, not so much. The industry kind of went back to large central inverters as a more effective, cost effective solution. Not only because the construction costs are, are low, lower, but also operation and maintenance complexities are, are more manageable. You can, you can, you can see the same thing going on in green hydrogen. But it turns out that at least based on our analysis, and I think we're seeing it play out in the industry, the, the idea of integrating onto a site hundreds and hundreds of very small containerized electrolyzers, it turns out to be quite expensive. And in no small part, it's expensive because it's very hard to drive the cost out of those units, but also because the footprint of the entire plant ends up being quite large and hence EPC integration costs get large again. It turns out it's hard to get the power to all of those boxes and aggregate and collect the hydrogen from all of those boxes and, and get the water, the clean water to all of those boxes, et cetera, et cetera.
- [21:39]
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- [22:21]
Host/Announcer
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- [23:10]
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- [23:46]
Shayle Kann
Okay, so taking at face value that all the things you're describing as the solution work, I mean I think it's important for people to have some understanding of where where we think costs realistically can and should go. Then we've talked about where they they have been for the Siemens and Thiessenkrups of the world in that $3,000 a kilowatt actual delivered capex range. What what's actually good? What is realistic but good? And then we should talk about what the market looks like for good.
- [24:15]
Rafi Garabedian
Yeah. Great. So I'll just give you our numbers and you know, I don't know that I've spoken publicly about our prices, but I'm going to here if you're okay with that.
- [24:26]
Shayle Kann
Shayl, this is your call. Let's do it.
- [24:30]
Rafi Garabedian
So we're pricing in the European market today with a total installed cost just north of $1,000 a kilowatt inclusive of EPC. Inclusive of EPC. That's everything from the substation, the civil works, all of our equipment, the installation and commissioning. It's basically the bill to the project developer for a hydrogen plant. Now, of course that varies from site to site, but that's rough numbers. That's about where we are. That's somewhere between a half and a third of the competitive benchmark, really, whether you're comparing to a Chinese electrolyzer built in Europe by an EPC or a European OEM built in Europe by an epc. By the way, the EPC business is pretty local.
- [25:21]
Shayle Kann
Yeah, we should spend a minute on the Chinese thing because that's the other, the other big looming question here. Like are you going to, you know, the question everyone gets. You get all the time, I'm sure, is are we just going to get a flood of cheap electrolyzers shipped from China? And one, is that going to solve the problem? Right. From a societal perspective, are we just going to get cheap electrolyzers? Like we've gotten cheap solar panels from China? And two, like, what does that mean if you're not a Chinese player in the market?
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Rafi Garabedian
Yeah, let's talk about that. It turns out a large industrial electrolyzer green hydrogen facility looks more like, you know, if you just walk up to it, it looks more like a gas generation plant, like a combined cycle plant, then it looks like a solar array. What do I mean by that? I mean it's a complicated thing. It's got a lot of pipes and valves and stuff going on, which makes it much less amenable to low cost manufacturing at scale. Kind of putting a low cost product in a box in China and shipping it to someplace and letting someone install it. So it is true that the global market is flooded with really cheap Chinese electrolyzers. These are like 2 megawatt electrolyzers that are the size of a school bus and way more than a school bus. And they need to sit in a building and have this like chemical plant wrapped around them to support them and operate them. So the, the normal approach that China has used in other industries to drive cost out really kind of only addresses the cost of the electrolyzer stack or stack and power conversion. It doesn't address the EPC component of the cost buildup. And so it's a limited, there's a limited opportunity for overall total installed cost reduction taking that approach. It's real, by the way, you know, we see integrators building or promising to build using Chinese equipment systems in the European market at a total installed cost, you know, right around maybe a little north of $1,500 a kilowatt. So still more expensive than our stuff, but quite a Bit cheaper than, than the name brand European suppliers. So long story short, I don't think the same game that worked in solar works in green hydrogen. Yeah.
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Shayle Kann
Okay, so let's talk about what the market then actually looks like here. I mean, we've talked about it's been too expensive. There's multiple components, there's maybe less willingness to pay the premium. Least there has been. But in your view, okay, if you can sell at 1000 bucks ish today and drive, and that's, you know, entering the market at, at a thousand bucks and, and presumably we'll be able to drive costs down from there if you're able to scale. What, what does demand look like? What does it rely upon in terms of policy support? What's your view like? What's your thesis of the market here?
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Rafi Garabedian
Yeah, the current market is still policy supported primarily in Europe. So Europe has to get a little policy wonky here. Europe has The Renewable Energy Directive 3. RED3. So called RED3. RED3 has a component in it called RFMBO, which is the, the part of the RED3 law that stipulates the, the gradual conversion to partial conversion to renewable molecules, E molecules. And these, these range from hydrogen itself to things like green methanol and green ammonia for various purposes. That policy I think has been, geez, I don't know when, when Red 2 and 3 were enacted, but it's been years. But the way European policy works, the EU law has to be what's called transposed or translated into national level rules which then drive project decisions. And those rules are being transposed as we speak. It's underway, the process is underway. I think Romania has transposed Red 3 now. I think Netherlands are close, Germany's very close. Spain is about to do so. Long list. And so we are seeing in the short term a policy driven market. What do I mean by policy driven market? I mean markets where the green product is more expensive than the gray product, but there is a compulsion to make a conversion and hence an absorption of that cost by society. That's the nature of the market today in Europe. Again, kind of similar to the old German feed in tariff days in the solar industry there was a different mechanism, but still it got the industry going at high speed at the expense of the German taxpayer footing the bill. And in this case what we're seeing is the European Union stepping up and saying, yeah, we're going to foot the bill for, for some conversion to E molecules so that we can get this industry going and see where the costs ultimately land. That's the market today, that is not a sustainable market in my view. In the long term, it's a necessary first step for the, for the P2X or green molecule industry to get going. And you know, I'm incredibly grateful for Europe's continued seemingly stalwart support for decarbonization. But we do recognize, at least at electric hydrogen, that we've got to collapse costs towards what we call fossil parity for the molecules that we produce. And it turns out that's a different number for, for different products. It's also a different number for different regions of the world. Right. So energy is complicated. Ammonia has a different price in different parts of the world depending on whether you have natural gas and can produce ammonia locally or not, for example. So we are increasingly turning our attention to markets where we believe in the next few years we can start to approach fossil parity on critical molecules that can achieve scale. I can give you a few examples of that as we talk.
- [31:56]
Shayle Kann
Yeah, give me an example or two of like what, where could you achieve fossil parity? What cost would it take on your side for that to be true? And similarly, is it like in those markets, is there a premium that has to get bought down? Is there a secondary benefit to green hydrogen that isn't entirely about the emission savings? Like, what's the theory of the case on how that plays out?
- [32:25]
Rafi Garabedian
Yeah, we are getting more sophisticated on that last point. And we experienced the same thing in the solar industry. If you remember it, initially it was all about carbon, and then later it was about energy security. And today it's about both. Right, it's about energy security, it's about carbon. It's also about volatility. Hedging. Right, you, you buy a green PPA that's a fixed price for 10 or 20 years, whereas if you buy fossil power, your price for that power kind of floats with the fuel price. So there's various values that can be derived from conversion to renewables that are independent of the carbon footprint of the renewables. And we're starting to see the same kind of more sophisticated point of view on the market emerging in E molecules. I'll talk for a little bit about a market that I'm really interested in and it's not a market we're incredibly active in. We've, we've, we've just dipped a toe in the water over there. But, but the market is Brazil and give you, let's like a few facts about Brazil. So Brazil is a huge agriculture exporter. I think agricultural Exports are about 20% of Brazil's. GDP represent about 50% of Brazil's exports, with most of the rest being minerals. I believe for this industry to exist in Brazil requires a great deal of artificial nitrogen fertilizer. So as you guys know, all agricultural products require nitrogen fertilizer. There's not enough natural nitrogen to go around. And so we make nitrogen fertilizer primarily from, well, almost exclusively from ammonia, which either is used as ammonia or is converted to nitrates or urea or other molecules that are easier to distribute. Brazil, it turns out, imports over 90% of its, its nitrogen. Its biggest import partner for fertilizer is actually Russia. So alarm bells can start to go off in your mind about like the geopolitics of all this, right? The risks that Brazil's economy faces as a result of importing a critical feedstock for its primary industry to the country. But also think about it in terms of the money that Brazil is spending effectively abroad to support its agriculture industry. If you put all that together, you have an interesting proposition for conversion of the Brazilian economy to local production of nitrogen fertilizer. But there's more, because Brazil imports all of its nitrogen. And the reason for that is simple. Brazil doesn't have natural gas, so they can't produce fertilizer the old fashioned way by cracking natural gas and running it through the Haber Bosch process. Because Brazil imports all of its fertilizer, the price of that fertilizer is relatively high due to the logistics costs of moving ammonia. Now today, fertilizer coming into Brazil might be 450 or $475 a ton. But if you look back 10 years, the 10 year average is around $600 a ton. And that you can go 20 years back, it's about the same number, right? It's a very volatile commodity that's not typically bought on long term contracts. It's traded in the market. It goes up and down and up and down. So if we use that $600 a ton benchmark as the, the bogey for what I'll call fossil parity ammonia in Brazil. The, the billion dollar question is, can we achieve that using electric hydrogens kit green hydrogen production to produce? And the answer turns out to be, yeah, we think we can. So we've done a lot of analysis on this particular market case. There's, there's another really kind of positive fact pattern about Brazil. It has a great deal of hydropower and is increasingly installing more and more solar and wind. The result of this is Brazil's grid is around 90% green already and power prices at least Away from the coastal economic centers are quite low, 30 to $35amegawatt hour. That in and of itself allows us to make on the order of seven to $750 a ton ammonia today with our equipment, which is not quite fossil parity, but not a huge stretch from it, and with the other benefits to Brazil's economy and resiliency on from onshoring the production of fertilizer, we think there's a strong business case for Brazil as a country to start to build out local ammonia production. Now, if you take our technology roadmap a little further out and you think about scale and also improvements we have coming in our technology along with what we expect to see in terms of continued cost reduction in wind and solar, we think we can get to actually cheaper than fossil hydrogen around the beginning of the next decade. So in the early2030s, that's a pretty compelling case. That's a market where we think we can be cheaper than the fossil alternative for a critical, critical piece of Brazil's economy. That's the kind of market I get really excited about because now we're not talking about a solution that's better because it's green. We're talking about a solution where green is the icing on the cake, not the whole cake. I think you said that Shail.
- [38:22]
Shayle Kann
I think that's the. Yeah, I mean, I've been. That's a, it's a short description of like where I think the world is at. Not the world, but at least the US Is at, at the moment. Which is like, if you're gonna be green, it's, it's, it's often insufficient to be green. You want green to be the icing, not the cake itself. And you gotta have some other benefits. It's not universally true, but it's, it's more true today than it was two years ago.
- [38:44]
Rafi Garabedian
I think it's pretty close to universally true today. With the possible exception being China.
- [38:49]
Shayle Kann
Yeah, I mean, in China things. Right. Various things don't hold in China that hold other places. That one probably among them. I guess I want to wrap up then with like. So that's a, I think a compelling promised land of like. Let's remind ourselves that the goal of getting this market, the green hydrogen market, off the ground is to replicate a version of what we've already seen in solar, which is get it to scale, get it down the cost curve, get it so that it is cost competitive. And so you're painting the picture of like, where it actually can be cost competitive. Straight up without a premium and carry all these side benefits. What does it look like to get from here to there? This is my final question for you. So like paint, paint, you know, we started with the picture of the last five years. What is the next five or 10 years have to look like?
- [39:36]
Rafi Garabedian
So I think the next five years looks like very, very tactical kind of one off projects that are policy driven in places like Europe that have the policy frameworks in place or emerging to motivate consumption of these molecules. And we're seeing that and we're very engaged in that market. That process will get us to scale where we can start to deploy in markets like I described around Brazil. But there are other similar markets. India is a great example of another very similar market with similar fact patterns where we think we can actually solve not just an economic problem but a host of other problems that are geopolitical in nature.
- [40:23]
Shayle Kann
Why do you retain optimism about this market? Like bring me into your head and explain to me why you're excited about the future in this market despite that.
- [40:34]
Rafi Garabedian
Yeah, I mean two things, both of them long term. Actually I think the, the short term is, is, is a slog. But, but really two things. So, so thing one, I see a clear path to, to parity with fossil equivalent molecules in a number of industries and a number of places in the world. That has me really excited. Right. So, so, so really it's all of, it's all about getting to subsidy free economics. And when you get to that, the market is, is insatiable for a product like ours. So that gets me very excited. And the other thing that gets me excited is, is my kids, honestly again, you know, I have kids in their 20s and I know how they think about the problem of climate and energy and they give me optimism that the situation we're in right now, it's a cycle. But if I look out, you know, five years out and think on a 10 year horizon, we are as a society going to, going to implement innovations to fix the problem.
- [41:40]
Shayle Kann
All right, Rafi, as always, appreciate the conversation and the candor and the optimism and we'll check back in once we've got a bunch of these multi hundred megawatt actually cheap green hydrogen plants up and running and see where we are on the cost curve.
- [41:56]
Rafi Garabedian
Well, shale, we're building our first one in West Texas today and it's going extremely well. So I'm looking forward to showing that off to you when it's up and running.
- [42:07]
Shayle Kann
Rafi Garabedian is the co founder and CEO of electric hydrogen. This show is a production of Latitude Media. You can head over to latitudemedia.com for links to today's topics. Latitude is supported by Prelude Ventures. This episode was produced by Daniel Waldorf. Mixing and theme song by Sean Marquand. Steven Lacey is our executive editor. I'm Shao Kahn and this is Catalyst.