The Future of Renewable Energy

storm by two US climate researchers. Their rapid analysis, which they shared on Twitter, looked only at rainfall and not other critical climate metrics related to hurricanes, such as strength and toesifications, sea level rise. But you know, we know that these storms may be not more frequent, but their intensity has definitely rapped out because of climate change, and that's something that we obviously need to think about. We've got somebody with us who thinks about this stuff a lot,

and Jason Few is CEO of fuel Cell Energy. It's a publicly traded company. Uh. He joins us this afternoon on the phone from Danbury, Connecticut. Jason, how are you? I am good, Thank you very much. How are you doing, Tom? We're doing pretty well. Um. Can you explain how fuel cells work? Because I think a lot of people. Um, you know, we understand batteries, we understand internal combustion, but fuel cells it's something that I think is not necessarily

on all of our radar. It's certainly not on mine. Sure, So I think if you think about it and its most simple terms, and we just use batteries as an analogy, Uh, you know, batteries you put energy in and then you drain it and then you need to recharge the battery.

The way you can think about a fuel cell is that we use an input feedstock for the fuel cell and that allows the fuel cell to run and operate on a continual basis, you know, seven days a week, twenty four hours a day without the need to recharge the battery. And because it's a fuel cell, it actually uses a chemical reaction to actually take a fuel and air and effectively make hydrogen and then to use that

hydrogen to produce power. And so it works very different than a traditional combustion engine that you know takes and and basically combust the fuel. With a fuel cell, the fuel is not combusted, so you don't produce things like socks and knocks and other particulars that play very heavily on you know, climate as well as air quality. What are the byproducts that it does end up releasing that it does produce, So it really depends on what is

the actual feedstock that you're using. So in a case where you know, we're working to commercialize our solid oxide fuel cell, and in that case we could use hydrogen, and that hydrogen could be made from all renewable energy sources. So in that case, there are no byproducts that are

produced other than water, you know, from the hydrogen. The second way we're if we're using a traditional fuel, let's say a biofuel or renewable natural gas or even um uh natural gas, then the byproduct is you do have some carbon emissions. But if you're using biofuels are R and G right, that's considered carbon neutral, and again there's no combustion of the fuel uh. And then we also have the ability to do things like carbon capture or what we refer to as well as carbon separation to

significantly reduce or eliminate those carbon emissions. And when you think about it in total, when you when you look at fuel cells versus renewable energy sources let's say like wind and solar, because the fuel cells are more efficient and they run twenty four by seven, and you think about just overall avoided emissions because you know, you actually end up with greater emission reductions with fuel cells in most cases than you do when you're using renewable energy

because you may only be getting twenty five to thirty five percent efficiency from those resources and then you need to get power from somewhere else. So, you know, it's interesting. We all have a lot of conversations about what is ultimately the solution um to climate change, and as we move towards an alternative energy you know, uh, world if you will, and hydrogen doesn't. It doesn't. It feels like

there's momentum building um in general. But talk to us about some of the concerns when it comes to fuel cells, and some of it is the cost, the durability, some of it is concerns about flammability. Feel so, what what is it the thing, the nut that you feel like we still have to crack before we get kind of mass adoption. Well, that's a great question, and that fuel cell energy we do two things as a company. We

decarbonized power and we produce hydrogen. Those are the two things we do with our platform technology when you think about some of those concerns or areas that you raise.

You know, we've had commercial available products since two thousand and three, and in fact, our first commercial fuel cell was sold actually in Japan to the Careen and Beer Company using biofuels, So you know, it just shows the fuel flexibility of the platform when it comes to hydrogen and some of the concerns that you know get raised around hydrogen. You know, hydrogen is used widely, you know, around the world. You know, ninety minute metric tons of

year of hydrogen are used. There's some forecast that suggests that you know, of the world's energy will ultimately come from hydrogen, if not greater than that. We tend to think that hydrogen is going to be an important part of the solution, the same way we think carbon capture will be an important part of the solution to achieving the one and a half degree scenario in terms of climate change itself. And and from a safety standpoint, like

I said, you know, hydrogen widely used today. It's very safe and unlike a battery, which contains everything that you need inside the battery to actually start a fire, that's not the case with hydrogen. So it's actually quite today. So why isn't adopted more widespread? Why will it maybe only be of energy production in the years to come? Why not more Well, I think part of it is, UH, there's a cost question right in terms of this this

desire to have green hydrogen. One of the things that I'm really excited about is the move not only in the United States, but I'm I'm seeing in countries around the world and the conversations we're having and in the conversation I actually just got to participate in UH in Pittsburgh with Secretary Grant Home and energy ministers from around

the world at a CEO Hydrogen roundtable. The conversation is shifted from using colors to really talk about carbon intensity, and I think that's one big change that's going to help drive accelerated adoption. Another change or thing that's happening that's going to help drive adoption is the work that you're seeing that's going to get done as a result of the i ra A the United States. You have similar legislation in markets like Korea and Japan and across

the EU. And we've seen this movie play out before. We saw how incentives, whether it's I T c production, tax credits, those kind of things really helped drive the cost curve down. We're going to see that same thing happen with fuel cells and with hydrogen as an effective way to get us to the cost that everyone's targeting, you know, which is you know, as low as a dollar a kilogram for hydrogen, and that's going to make

it highly competitive. And I think as you look around the world today and you're seeing increased energy prices, those sparks spreads are narrowing, uh and and so I think you're going to see adoption start to accelerate with hydrogen as one of the answers to solving this climate crisis we have today. From an infrastructure perspective, when it comes to generating power, explain to us how you take a facility and allow it to create power using hydrogen using

fuel cells versus using fossil fuels. Yeah. So when you think about um and input fuel, and and you think about hydrogen, hydrogen just becomes the input fuel that we would be using with our solid oxide platform for instance, in which we would take that hydrogen and we use that hydrogen as the feedstock to create electricity. That hydrogen interacts with the fuel cell, right, and and the chemistry that we use in this case of solid oxide technology

to produce that power. And if that hydrogen was produced by you know, a zero carbon source of electricity. Let's say you're using electrolysis, so you're taking electricity and water and you're converting into hydrogen, then you're using that hydrogen to produce power. That hydrogen has zero carbon intensity, then the power being produced from our platform is zero carbon. But we also have the ability to use blended hydrogen and natural gas for example, which even lower as you know,

the carbon intensity of the fuel in that case. But in all cases, whether it's hydrogen, renewval, natural gas, or bile fuels, that serves as the input fuel that the fuel cell needs to then convert that to power, whether it's for the grid or for a commercial industrial customer. Uh and delivering that power as a as a product. Hey, I'm curious, Jason um about the business and the business outlook and the growth. And I know earlier this month

you came out with your latest update quarterly update. I think there was a wider than expected loss for the quarter, strongest quarterly revenue in five years. Um, and you guys talked about an increase in marketing and consulting costs because you had raised headcount for rebranding, accelerated and accelerating your

sales and commercialization efforts. Give us some more color, if you will, in terms of the business who's buying um You guys, have you know customers, certainly in the energy space and the core brid space, But give us an

idea of where the growth is coming from from your business. Sure, so are the customers that we target largely cut across the utility sector where we're providing grid based power, and we might be providing that power purely is just a power resource on the grid, or we might be providing that power and using the thermal energy where we might be connected to a district heating system and we're providing

that thermal energy in addition to the power. Or we might be in an in a microgrid configuration where we're providing power to the grid and in the power outage, we go into what we refer to as island mode and we provide power to a dedicated set of resources, keeping those critical resources powered while the grid is down.

We also serve commercial and industrial customers, and in many of those cases we're providing power to those customers, and again we might be providing the thermal energy such that they're using steam from our platform in their manufacturing process. Uh. And we also have the ability to do things like provide carbon to those customers. So when you think about carbonated beverage companies, are you think about food processing where carbon is really important to not only processing proteins, but

then extending shelf life by keeping those proteins shield. Uh. Those are always in which we leverage our platforms to deliver value to our customers. In addition to hydrogen, and we're going to projects for Toyota today we will deliver hydrogen to Toyota power and water all from the same platform at the Port of Long Beach in California. Go go ahead. A very quick question. I just want to

know about price increases, Jason. When it comes to the commodities that you actually use, are you seeing the prices come down at all? We are seeing different reactions to different commodities. So for example, if you take nickel as a commodity, we've seen price decreases there. We're seeing obviously pricing increases for natural gas. So as we look across

our supply chain. We've had a very focused approach on managing those price increases to minimize the impacts for us in terms of pricing to our customers, but we are seeing some price improvements across the supply chain. Well. Really great to check in with you and really appreciate your time, Jason, take care of Jason fu, Chief executive officer at fuel

Cell Energy. They are a one point for a billion dollar market cap company UH and great to have them join us from I believe their carpet offices in Connecticut.