AI transcript
0:00:02 (upbeat music)
0:00:07 Pushkin.
0:00:15 Our civilization is built on hydrocarbons.
0:00:20 Oil and natural gas and coal light up our houses
0:00:22 and keep us warm in the winter
0:00:26 and propel our cars and our ships and our planes.
0:00:29 They provide the heat companies need to make stuff
0:00:32 and hydrocarbons even provide the hydrogen
0:00:35 to make the fertilizer to grow our food.
0:00:39 The problem with hydrocarbons, of course, is the carbon.
0:00:42 It binds with oxygen, goes into the atmosphere
0:00:44 and warms the earth.
0:00:47 So humanity is in the process of trying to very quickly
0:00:51 come up with cheap ways to power our civilization
0:00:53 without hydrocarbons.
0:00:55 And as we’ve been discussing on the show
0:00:58 for the past few weeks, we’re actually making progress.
0:01:02 Solar energy in particular has become wildly cheap.
0:01:04 In some parts of the world, in fact,
0:01:07 it’s now free in the middle of sunny days.
0:01:10 And it’s likely that solar energy will be free
0:01:12 in the middle of the day in much more of the world
0:01:14 in the next few years.
0:01:16 The triumph of solar is gonna go a long way
0:01:20 toward powering our houses and factories and cars.
0:01:24 But there’s a lot that solar energy cannot do.
0:01:25 For reasons of basic physics,
0:01:27 it’s really hard to use solar energy
0:01:30 or solar energy combined with batteries
0:01:33 to power container ships or commercial planes.
0:01:36 It’s also hard to store large amounts of solar energy
0:01:38 for long periods of time.
0:01:40 And it’s hard to move it around the planet,
0:01:42 hard to move it across oceans.
0:01:45 So a lot of people step back
0:01:48 and they look at hydrocarbons at fossil fuels
0:01:51 and they say, you know, most of the energy in hydrocarbons
0:01:55 comes from the hydro part, the hydrogen.
0:02:00 What if we could make clean fuel that was like hydrocarbons
0:02:01 but without the carbon?
0:02:05 What if we could take that cheap, abundant solar energy
0:02:09 and use it to make pure hydrogen?
0:02:10 That would be a huge step forward
0:02:13 in figuring out how to live without hydrocarbons.
0:02:16 (upbeat music)
0:02:22 I’m Jacob Goldstein and this is What’s Your Problem.
0:02:25 This is the third of three shows we’re doing
0:02:27 about the triumph of solar energy,
0:02:29 about how solar became so cheap
0:02:31 and what cheap, abundant solar energy
0:02:34 is gonna mean for the world.
0:02:36 My guest today is Rafi Garabedian.
0:02:39 Rafi was previously the chief technology officer
0:02:43 at First Solar, a company that makes solar panels.
0:02:47 Now he is the co-founder and CEO of Electric Hydrogen,
0:02:51 a company that has raised hundreds of millions of dollars
0:02:54 in its quest to solve a big problem.
0:02:57 How do you use intermittent solar and wind power
0:02:58 to make hydrogen?
0:03:01 And crucially, how do you do it cheaply enough
0:03:04 to make that hydrogen economically viable?
0:03:08 – So you can take this free solar and wind
0:03:10 that’s available when no one needs it,
0:03:14 you can convert it to hydrogen and use that hydrogen
0:03:19 to make things like steel and fertilizer and fuels.
0:03:25 And the fuels, if I understand correctly,
0:03:30 I mean, when you burn hydrogen, it just makes water, right?
0:03:32 Like that’s part of the genius.
0:03:35 – Yeah, when you burn hydrogen, it just makes water.
0:03:36 It’s super simple, right?
0:03:38 It generates heat like any other fuel
0:03:42 and you can use that in an engine or a turbine or whatever,
0:03:45 but it emits water instead of CO2 and water.
0:03:47 So that’s the beauty of it.
0:03:52 But the rub is hydrogen by itself is hard to utilize.
0:03:56 And that’s because it’s not a liquid, it’s a gas
0:03:59 and it’s a gas that’s hard to handle
0:04:01 because the molecule is so small.
0:04:06 And so utilizing hydrogen directly as a fuel
0:04:10 requires a retooling of infrastructure.
0:04:14 When I say infrastructure, I mean pipelines,
0:04:17 shipping vessels to move the stuff around,
0:04:21 even the engines and turbines that would burn it are different.
0:04:27 And so hydrogen itself as a fuel is the end game.
0:04:29 And I would say it’s gonna happen,
0:04:31 but it’s going to take a long time to happen
0:04:36 because we’ve spent arguably over a hundred years
0:04:41 building infrastructure, engines, turbines, pipelines,
0:04:46 vessels, all that stuff to move and consume hydrocardins.
0:04:49 And we’re gonna have to retool all that stuff
0:04:51 to move and consume hydrogen.
0:04:53 As the replacement.
0:04:58 – So if that’s the long game, what’s the medium game?
0:05:00 – Yeah, that’s a great question.
0:05:01 So that’s the long game.
0:05:03 The medium game is convert the hydrogen
0:05:07 into the molecules we already know and love.
0:05:09 Well, kind of love, except for there.
0:05:10 – No one use, no one use.
0:05:15 – No one use in mind bogglingly big quantities.
0:05:19 And if you think about hydrocardins fuels
0:05:22 and how much we use globally,
0:05:27 I can’t even express how big an industry that is.
0:05:31 – Just how much oil, how many hydrocarbons
0:05:33 we’re burning right this minute.
0:05:34 – Right this minute.
0:05:38 And society, as we noticed, entirely depended on them.
0:05:40 Energy is prosperity.
0:05:43 Energy is everything that we do.
0:05:45 – Is material well-being, yeah.
0:05:49 – So the short game, the medium game
0:05:51 is convert the hydrogen, which we know how to do.
0:05:54 Thermal-mechanically, we know how to convert hydrogen
0:05:56 and CO2, which we can capture
0:05:59 from the atmosphere from other processes.
0:06:01 We know how to combine those two
0:06:05 to make everything from methane, which is natural gas,
0:06:07 all the way to jet fuel.
0:06:10 And so once we do that,
0:06:12 we don’t have to convert or retool
0:06:15 all of that industrial infrastructure.
0:06:19 – And why is that version cleaner?
0:06:22 Where are you getting the CO2 from?
0:06:24 – Yeah, that’s also a great question.
0:06:28 So the source of the CO2 is super important
0:06:32 for the cleanliness, the carbon profile
0:06:35 of these pathways, these intermediate pathways.
0:06:40 Because CO2 that is clean and clean would be biogenic.
0:06:42 It comes from biological sources.
0:06:45 Well, that’s a shorthand of way of saying
0:06:47 it’s captured from the atmosphere, right?
0:06:50 ‘Cause biological CO2, it comes from plants
0:06:52 and where does that come from?
0:06:53 It comes from the air.
0:06:55 So that’s a form of carbon capture,
0:06:58 but there’s just not enough of it available
0:07:02 to make the amounts of fuels that we need.
0:07:06 And so it is a limited pathway, but geez,
0:07:09 I mean, we can go down that pathway for 10 years
0:07:12 and not run out of CO2 sources.
0:07:15 And in the meantime, we can and are,
0:07:17 in fact, already starting as a society
0:07:19 to build our hydrogen infrastructure.
0:07:22 If you go to Europe, there are in Germany,
0:07:25 in the Netherlands, there are hydrogen pipelines,
0:07:28 dedicated hydrogen pipelines being built today.
0:07:30 – So good.
0:07:33 So we’re going in reverse chronological order.
0:07:34 We started with the long game
0:07:35 and then we did the medium game.
0:07:38 And now you’re getting to the present, right?
0:07:40 They’re building hydrogen pipelines in Europe.
0:07:44 Now people make hydrogen today for industrial reasons,
0:07:47 but that itself is a dirty process, right?
0:07:51 The sort of, before we can get to the happy world
0:07:53 of just hydrogen or even the semi-happy world
0:07:56 of hydrogen plus captured carbon,
0:07:58 you have to figure out how to make hydrogen
0:08:01 without emitting carbon in the first place, right?
0:08:04 That is your immediate project.
0:08:05 – You got it.
0:08:08 And I came, I had my co-founders came at this problem
0:08:10 actually from the opposite direction.
0:08:14 We’re solar, we’re solar people, you know,
0:08:16 is solar and wind like renewable power people.
0:08:21 And so like we came at it from, gee,
0:08:23 this energy resource is really cheap.
0:08:26 It’s really scalable, but it’s limited
0:08:28 in how much we can deploy it.
0:08:31 We got to think of a better way to use it.
0:08:33 Hey, this hydrogen pathway opens up
0:08:38 like a whole nother market that’s even bigger
0:08:40 than the electric power market.
0:08:42 Let’s try to do that.
0:08:43 – I mean, there’s a way where like,
0:08:47 if you can turn intermittent clean energy into hydrogen,
0:08:49 it’s like fuel, right?
0:08:52 Like hydrogen gas, like it’s kind of a pain in the ass
0:08:55 to move around and we’re not set up to use
0:08:58 that kind of fuel, but it has the qualities of fuel,
0:09:00 not the qualities of electricity, right?
0:09:02 It’s transportable, storable.
0:09:04 So you have this big idea.
0:09:06 It’s an obvious question, right?
0:09:09 An interesting, huge question right now.
0:09:10 Oh my God, solar power is free.
0:09:12 How do we leverage that?
0:09:13 – Yeah.
0:09:14 – You know, people are trying to make weirdo
0:09:16 long duration batteries.
0:09:18 That’s another version of it.
0:09:21 How do you land at hydrogen?
0:09:23 – Yeah, I’m a big fan of long duration batteries
0:09:28 ’cause the grid should be able to take more solar and wind.
0:09:33 It still doesn’t solve the other half of global emissions,
0:09:36 which are all these chemical industries,
0:09:38 and think about Japan.
0:09:40 Japan doesn’t have fossil resources.
0:09:44 It doesn’t have the land or the solar and wind resource
0:09:45 to power its own economy.
0:09:49 So, you know, the choices for Japan are nuclear,
0:09:51 which is problematic for Japan.
0:09:53 Or importing- – Because of Fukushima,
0:09:58 because they had like a Tsunami and a nuclear accident.
0:09:59 – Yeah, it wasn’t a good thing.
0:10:02 Or, which is what Japan does,
0:10:04 importing fuel from other places in the world.
0:10:07 You can’t import batteries that are charged.
0:10:08 – Yeah.
0:10:09 – That’s not a thing, right?
0:10:11 And when you think about Japan, it’s an isolated case.
0:10:13 It’s really clear and obvious,
0:10:18 but Europe imports most of its energy as an example, right?
0:10:20 And that’s a huge economy.
0:10:24 So moving energy- – From Russia awkwardly.
0:10:25 – Awkwardly from Russia.
0:10:29 And now more and more LNG from the U.S.,
0:10:31 which by the way- – Liquid natural gas.
0:10:32 – Liquid natural gas.
0:10:37 – Yeah, so wires work really well in continents, places,
0:10:40 where you have stronger renewable resource
0:10:42 and a lot of people.
0:10:45 But that is not characteristic of a lot of the world.
0:10:47 And so when we think globally,
0:10:49 and energy is a global industry, right?
0:10:51 It’s a global problem.
0:10:54 We think globally, you’ve got to be able to move energy
0:10:57 in some form other than electrons.
0:11:01 And that takes us to hydrogen or it’s, you know,
0:11:04 it’s derivative, it’s like fuels, other hydrocarbons.
0:11:06 As the way we do this, right?
0:11:10 That’s the only way humanity has come up with
0:11:13 to move fast amounts of energy to where people need it.
0:11:17 – I mean, it’s the genius of fossil fuel, right?
0:11:20 Like fossil fuel is an extraordinary
0:11:23 energy storage mechanism, right?
0:11:24 Like it’s incredible.
0:11:25 You can move it around.
0:11:26 You can leave it in a tank.
0:11:28 You can put it on a ship.
0:11:29 It’s full of energy.
0:11:31 You can burn it whenever you want.
0:11:32 Like it’s tough to beat.
0:11:35 – It is super tough to beat.
0:11:39 – And we have 150 years of optimizing for it
0:11:42 and building a world around it.
0:11:46 – And if it weren’t for climate change,
0:11:48 I wouldn’t be doing what I’m doing
0:11:53 because fossil fuels are awesome in every other way.
0:11:55 Like you described, right?
0:11:56 They’re easy to store.
0:11:56 They’re easy to move.
0:11:58 They’re super cheap to get.
0:12:03 – Wow, like it’s such a gift nature’s given us
0:12:06 and we’ve been using it for a long time.
0:12:08 – Gift, gift asterisk.
0:12:09 – Yeah, gift asterisk.
0:12:12 Well, we’ve gotten smarter, right?
0:12:12 We’ve gotten smarter
0:12:16 and we’ve started to realize the unintended consequences
0:12:18 of this resource we have.
0:12:22 And now we gotta, you know, luckily, hopefully maybe
0:12:25 we have time enough to get out of our own way
0:12:27 and start to convert.
0:12:30 – So, okay, so hydrogen lets you do all these things.
0:12:34 It’s harder, but the big problem is it’s more expensive.
0:12:37 It’s a lot more expensive today.
0:12:38 – Well, and let’s just be clear.
0:12:40 There’s, hydrogen means different things.
0:12:43 And like there is, people do make hydrogen
0:12:46 at industrial scale now, but they do it
0:12:48 in a way that emits carbon dioxide.
0:12:50 That is like not at all about solving
0:12:51 the kinds of problems we’re talking, right?
0:12:54 So the fundamental hard thing is using electricity
0:12:55 to make hydrogen,
0:12:57 which is technically not hard,
0:13:00 but nobody’s figured out how to do it
0:13:01 in an economical way, right?
0:13:02 That’s the big thing.
0:13:04 – Exactly, that’s exactly it.
0:13:06 People have been doing it since, I don’t know,
0:13:08 60 years ago, 65 years ago.
0:13:10 – Right, like, I mean,
0:13:12 my high school chemistry teacher did it, right?
0:13:15 He made this janky electrolyzer where he had a battery
0:13:17 and then he ran wires from the battery
0:13:18 into a thing of water,
0:13:22 and he put upside down test tubes in the water,
0:13:24 and one of the test tubes filled up with oxygen
0:13:26 and the other one filled up with hydrogen.
0:13:29 – That basic demonstration in high school chem lab
0:13:34 or physics lab is the core physical phenomena
0:13:39 that is being scaled up into modern electrolyzers.
0:13:43 That’s the machine that does this on an industrial scale.
0:13:48 Today, that equipment is inefficient and super expensive.
0:13:51 And because it’s so expensive,
0:13:53 you have to run it all the time.
0:13:56 And so, where, yeah, so, you know,
0:13:58 think about like, you own this really expensive thing,
0:14:00 you wanna use it all the time.
0:14:03 – Yeah, right, because the value you get out of it
0:14:05 is like the amount you pay for it
0:14:07 divided by how much you use it, right?
0:14:10 – Exactly, you’ve tied up all this money in a thing,
0:14:13 and you’ve got it, that money has to be put to work, right?
0:14:15 – And so, if your whole case is like,
0:14:18 oh, we’re gonna have intermittent free energy,
0:14:20 that’s not gonna work, yeah.
0:14:23 – That’s right, where people do electrolysis today
0:14:26 is where they have cheap hydropower.
0:14:29 And, you know, you think of like Sweden and Norway,
0:14:31 the Norwegians were pioneers of this,
0:14:33 ’cause they had a lot of hydropower in remote places
0:14:35 without a lot of people.
0:14:36 Hey, if we could convert that to hydrogen
0:14:38 and make fertilizer, wouldn’t that be great?
0:14:42 Right, so that’s been going on for half a decade.
0:14:43 – Oh, interesting.
0:14:44 – In that part of the world.
0:14:47 Okay, but hydropower isn’t all that scalable.
0:14:48 There’s gigawatts of it out there,
0:14:50 but you can’t build much more
0:14:55 because it has its own environmental impacts, right?
0:14:57 So, okay, so that’s the core issues.
0:14:59 This equipment’s super expensive.
0:15:01 It’s not very efficient.
0:15:04 And so that limits our ability to use it
0:15:08 from with this powered by this cheap, abundant,
0:15:10 but intermittent renewable resource,
0:15:12 all this excess solar and wind.
0:15:14 – It’s always techno economics, right?
0:15:16 Like the whole energy transition,
0:15:19 it’s not really a technical problem clearly at this point.
0:15:21 It’s an economic problem.
0:15:23 It’s the techno economic problem.
0:15:26 – Yup, and the solution to the techno economic problem
0:15:30 is largely technical innovation,
0:15:34 but with business model and economic innovation wrapped
0:15:35 around it.
0:15:36 – And scale, right?
0:15:38 And scale, it seems like, yeah.
0:15:41 – Yeah, yeah, yeah, absolutely, scale as well.
0:15:43 So let’s talk about scale.
0:15:47 So most electrolyzers, big ones,
0:15:52 are one, maybe two or three megawatts.
0:15:54 Those are the biggest ones out there.
0:15:58 A megawatt is like how to put that in real terms.
0:16:00 It sounds like a lot of power.
0:16:01 It kind of is a lot of power,
0:16:05 but it’s nothing compared to the industries
0:16:07 we’re talking about and the uses we’re talking about.
0:16:12 So if you think about like an ammonia plant,
0:16:16 you would need a thousand of those
0:16:20 to make enough hydrogen to run an ammonia chemical plant.
0:16:22 – One, that’s one ammonia plant.
0:16:23 That’s one.
0:16:24 – One of thousands in the world.
0:16:25 – Yeah.
0:16:28 So do you need to go up and buy a thousand X?
0:16:30 Is that about the way to go up?
0:16:32 – You need to go up by about a hundred X.
0:16:33 – Okay.
0:16:36 And then you send 10 of them to the plant
0:16:37 and it makes economic sense?
0:16:38 – That’s it, that’s it.
0:16:42 So it is all about techno economics, which by the way,
0:16:44 so the company I run is a startup.
0:16:45 We’ve been around for a little over four years,
0:16:47 venture financed tech startup.
0:16:51 This is an insane thing for a startup to try to do.
0:16:54 – Yes, well, you’ve raised a ton of money, right?
0:16:55 Like it’s wildly capital intensive.
0:16:57 You’ve raised hundreds of millions of dollars.
0:17:00 It’s an impressive display of venture capital
0:17:02 that people have invested in you,
0:17:07 given you that much money on a kind of long shot thing,
0:17:09 right, on a certainly hard thing that might not work.
0:17:13 – Super, super intense.
0:17:16 And I’m super grateful that the venture community,
0:17:20 if you look at the venture capital communities experience
0:17:23 with what they call clean tech, right?
0:17:24 This is like technology companies
0:17:29 that are trying to do like big, hard transformations
0:17:30 of industry to make them cleaner.
0:17:36 There was clean tech 1.0, maybe a decade or more ago
0:17:40 and a lot of people lost a lot of money, right?
0:17:43 In that first foray into clean tech.
0:17:46 – I mean, you happen to work at one of the only U.S. companies
0:17:48 that really came through that, right?
0:17:51 Maybe that helps raising money this time.
0:17:52 – It certainly doesn’t hurt.
0:17:54 Absolutely, it certainly doesn’t hurt.
0:17:57 Yeah, I spent 13 years at First Solar
0:17:59 and it is literally one of the, as you said,
0:18:02 the only U.S. companies that’s still thriving
0:18:04 in these industries.
0:18:07 But when we started this company,
0:18:09 we, I think we started it at a great time,
0:18:12 clean tech 2.0, if you will.
0:18:15 There was a lot of venture capital interest for good reason
0:18:20 because political resolve to do the things necessary
0:18:26 to start to address climate change was strong.
0:18:28 And that provides like the economic footing,
0:18:31 the support necessary to,
0:18:35 for kind of new technologies to enter the market.
0:18:37 When something new enters the market,
0:18:38 it’s never competitive.
0:18:41 – Yeah, what’s interesting in the solar story,
0:18:45 how, at least in Jenny Chase’s version of the story,
0:18:47 which seems like the most credible version I’ve come across,
0:18:51 the German feed-in tariff of 2004
0:18:52 is this sort of inciting event.
0:18:54 It’s just this one policy change
0:18:57 in a medium-sized rich country
0:19:02 kicks off this amazing run down the experience curve,
0:19:05 you know, of solar panels getting cheaper and cheaper
0:19:09 until now without incentives like solar’s gonna win.
0:19:10 It’s gonna keep winning.
0:19:13 It’s not subject to these political wins.
0:19:13 – You got it.
0:19:15 I won’t repeat the story,
0:19:17 though I personally lived through it,
0:19:19 but it sounds like you and your listeners
0:19:21 have already heard it and your recounting is accurate.
0:19:24 We’re not for the German feed-in tariff for solar
0:19:25 probably would not exist,
0:19:28 nor would the solar industry, as we know it.
0:19:31 China certainly would not have scaled up their industry
0:19:34 dramatically and they’re the dominant supplier
0:19:38 of solar panels in the world by a large margin.
0:19:44 But as a result of all that, the industry got to scale,
0:19:45 got to better and better economics,
0:19:48 and it’s not just the solar panels, the equipment,
0:19:49 but it’s also, as you said,
0:19:54 the experience of building solar farms,
0:19:56 the learning and the cost reduction
0:19:58 that comes from repetition, right?
0:20:00 You build one house, it’s kind of expensive.
0:20:02 You build 100 houses, they get cheaper and cheaper.
0:20:04 It’s the same with solar and wind.
0:20:07 – Houses are a weird example, though.
0:20:08 Houses are like the ones that–
0:20:08 – That was a bad example.
0:20:10 – There have been terrible productivity gains.
0:20:13 Everything else gets cheaper when you build more of them.
0:20:15 Houses weirdly refractory to productivity gains.
0:20:18 – That was a really bad example, I agree.
0:20:24 – Still to come on the show,
0:20:27 how Rafi and his colleagues at Electric Hydrogen
0:20:30 plan to cut the cost of clean hydrogen in half.
0:20:33 (upbeat music)
0:20:42 – So is the Inflation Reduction Act,
0:20:46 this bill, this US law passed a few years ago,
0:20:48 is this like the German feed-in tariff
0:20:50 of 2004 moment for hydrogen?
0:20:51 Is that what you’re hoping?
0:20:53 – Yeah, so the answer is no.
0:20:55 – Okay, interesting, tell me more.
0:20:57 – Yeah, interestingly, the equivalent
0:21:00 of the German feed-in tariff today
0:21:03 is not the Inflation Reduction Act
0:21:05 and it’s provisions for hydrogen,
0:21:08 but it’s what’s going on in European policy.
0:21:13 – Okay, well that’s heartening for semi-obvious reasons.
0:21:14 Go on.
0:21:17 (laughing)
0:21:19 – Yeah, yeah.
0:21:21 – So what’s happening in Europe?
0:21:23 – So in the European Union,
0:21:27 there are a number of policy frameworks,
0:21:30 but what’s called red two or red three,
0:21:34 which are laws in Europe.
0:21:38 These laws in Europe provide a framework
0:21:41 for carrots and sticks to decarbonize
0:21:44 certain high-emitting industries.
0:21:49 It all has to do with the utilization of renewable energy
0:21:51 to decarbonize things like steel,
0:21:56 concrete, fertilizer, chemical industries, energy.
0:21:59 Those heavy industry ones that you mentioned
0:22:03 are the classic ones we haven’t figured out yet.
0:22:07 Classic hard to do with electricity.
0:22:08 Even if you’ve got the electricity,
0:22:12 like cement famously very hard to decarbonize,
0:22:14 steel very hard, fertilizer very hard,
0:22:16 like we don’t know how to do it yet.
0:22:18 – Well, interestingly, we do know how to do it.
0:22:20 – We don’t know how to do it economically yet.
0:22:22 – That’s it, you got it.
0:22:25 – Which ends up being the same thing
0:22:27 with commodity businesses like that.
0:22:30 – 100%, the only value in a commodity business
0:22:32 is the price, right?
0:22:35 There’s no other like, you can’t make it prettier,
0:22:38 you can’t make it faster, you can’t make it cooler.
0:22:40 It’s just, the only thing you can do
0:22:42 is make it cheaper. – It’s just fertilizer bro, yeah.
0:22:43 – Yeah, yeah, yeah.
0:22:46 Okay, so the European kind of legal framework,
0:22:51 policy framework actually is what’s driving this industry
0:22:55 to produce hydrogen and chemicals from hydrogen
0:22:58 because it’s driving consumption,
0:23:01 demand for those models, for those products.
0:23:03 – Because basically they get a subsidy
0:23:07 if they consume hydrogen and they pay a fee
0:23:09 if they don’t, more or less.
0:23:12 – And it’s that last piece, the penalty if you don’t.
0:23:16 – The stick, the stick. – The stick is what actually works
0:23:19 to create demand, that’s right.
0:23:22 Because, and in contrast, what we have in the US
0:23:25 with the IRA, and we can talk later
0:23:29 about what’s actually going on with it if you care to.
0:23:34 But in the US, we just have a production-side subsidy
0:23:35 vis-a-vis a tax credit.
0:23:39 That doesn’t do anything to cause the demand side
0:23:40 to buy the stuff.
0:23:46 – Yes, I guess the hope would be that the production subsidy
0:23:51 would lower the price at which producers could sell
0:23:54 which would then increase demand.
0:23:57 – That is the, that would be the naive hope.
0:23:58 – Naive fare, yeah.
0:24:00 – Yeah, we’ve never seen production-side–
0:24:02 – Naive hope was my first album.
0:24:06 Go on, we’ve never seen–
0:24:09 – We’ve never seen production-side support alone
0:24:13 kick off a new energy industry.
0:24:15 It’s always taken, yeah.
0:24:17 – You have to subsidize demand.
0:24:20 – Yeah, you somehow have to get the industry
0:24:23 over that initial hump where the supply-side subsidy
0:24:27 isn’t quite sufficient to cause people to change behavior.
0:24:30 – Interesting.
0:24:34 Well, so does that mean that whatever happens
0:24:39 with the regime change in Washington
0:24:41 isn’t gonna be that big of a deal for you?
0:24:44 You’re like, oh, we weren’t that into the IRA anyway?
0:24:49 – Yeah, kind of, we were, and frankly,
0:24:52 still are super hopeful that the rules
0:24:55 for using the IRA tax credit will get clarified
0:24:57 and then we’ll be able to actually use it.
0:24:58 ‘Cause we haven’t been able to use it yet
0:25:01 ’cause the current administration hasn’t set the rules.
0:25:03 – Okay. – The law exists.
0:25:07 It’s kind of a walkie-talkie thing, but it’s unclear.
0:25:12 It’s frankly unclear how the new administration
0:25:13 is gonna deal with this.
0:25:18 I think there’s reason to believe it could go either way.
0:25:19 So we’re waiting to see.
0:25:22 – Yeah, I mean, it seems like a lot of the IRA
0:25:26 might be unchanged, right?
0:25:29 I know there was a group of Republican congressmen
0:25:31 that recently wrote to the Speaker of the House
0:25:33 saying don’t cut the IRA,
0:25:36 saying it’s creating jobs in our industries.
0:25:40 It does seem like it was written in such a way
0:25:42 or at least is being implemented in such a way
0:25:45 in other sectors at least
0:25:48 that it does have some staying power politically.
0:25:52 – The risk of being political and super cynical,
0:25:55 which I tend to be when I get political,
0:26:00 Washington’s about money and the IRA channels money.
0:26:04 Disproportionately, it turns out, to Republican states.
0:26:08 And so there is real support,
0:26:09 not only principal support,
0:26:12 because not all Republicans are blind to climate change
0:26:16 and the need to transform the energy sector.
0:26:18 So I think that needs to be said
0:26:21 and realized that it’s not monolithic.
0:26:23 Hey, we don’t care, right?
0:26:26 There’s real support for solar and wind in particular,
0:26:29 but also for other decarbonization pathways
0:26:31 amongst Republicans,
0:26:34 but also like the money matters.
0:26:37 And so red states are getting a lot of money
0:26:38 from the IRA potentially.
0:26:42 And so gutting that would be, I think, politically challenging.
0:26:45 But this is a non-linear time, right?
0:26:50 This is a time when I think it’s very hard to predict
0:26:52 what’s gonna go on in Washington, so we’ll see.
0:26:53 – Yeah, yeah, yeah.
0:26:58 So, okay, so you’re saying you have a pathway in Europe.
0:27:01 Anyways, let’s talk more about
0:27:04 how you’re actually trying to do this thing, right?
0:27:08 So you have in front of you a sort of technical problem,
0:27:13 which is making green hydrogen cheaply enough
0:27:16 to make economic sense, right?
0:27:20 And you have certain tailwinds in the form of regulations
0:27:21 that are encouraging this,
0:27:23 but you’re still not there yet, right?
0:27:24 Even with those tailwinds.
0:27:27 Is that a fair characterization of where you are now?
0:27:29 – Yeah, that’s a totally fair assessment
0:27:30 for the whole industry, actually.
0:27:34 So if you think about the whole burgeoning,
0:27:38 hopefully soon burgeoning industry of electrolytic.
0:27:42 – Soon to be burgeoning, today it’s nascent,
0:27:44 tomorrow it’s burgeoning.
0:27:45 – That’s right.
0:27:47 If you think about like green hydrogen
0:27:50 or electrolytic hydrogen, whatever you wanna call it,
0:27:56 as an industry, it’s gotten a lot of excitement
0:27:59 because, again, the policy framework has matured
0:28:01 and is there to support it.
0:28:06 But not a lot of big projects have been built yet.
0:28:08 And it’s because it’s too expensive.
0:28:12 That is exactly why my company,
0:28:14 Electric Hydrogen, exists.
0:28:17 Like we exist because we actually recognize
0:28:20 that it’s too expensive and have developed
0:28:23 in our commercializing technical solution
0:28:27 to make it much cheaper by a factor of two,
0:28:30 like half the cost.
0:28:31 – Does half get you there?
0:28:34 If you actually do cut the price in half,
0:28:37 then does it work under, say, the European regime right now?
0:28:38 – Yeah, totally.
0:28:42 So in Europe, the typical project
0:28:45 using other technology companies’ equipment,
0:28:47 and I’ll name the big ones, like Siemens
0:28:50 or Tees & Crew, right, big industrial companies.
0:28:52 – Just big incumbent industrial companies.
0:28:53 – Yeah, they make these things.
0:28:55 They make equipment to do this stuff.
0:28:59 The cost of producing hydrogen using that gear in Europe today
0:29:03 is probably $5.50 a kilo of hydrogen,
0:29:06 so maybe $6.00 a kilo of hydrogen.
0:29:08 If you make hydrogen from natural gas in Europe today,
0:29:12 it probably costs around $3.00 a kilo.
0:29:13 – Oh, okay.
0:29:14 – We think we’re already there.
0:29:15 We think we’re already at a place
0:29:19 where we can enable economic parity,
0:29:21 or close to economic parity,
0:29:24 with the fossil incumbent,
0:29:27 but in a very fundamentally clean way.
0:29:29 – So how do you do it?
0:29:32 How do you cut the cost in half?
0:29:36 – Yeah, it all starts with the realization,
0:29:39 which you struck on really early in this conversation,
0:29:44 that cheap power is plentiful, but it’s not steady.
0:29:46 – Yeah.
0:29:47 – Right?
0:29:49 So the equipment that you use to convert
0:29:52 that unsteady intermittent cheap power to hydrogen
0:29:55 has to be really, really inexpensive,
0:29:57 but it also has to be flexible.
0:30:00 It has to be able to run up and down, up and down quickly
0:30:05 without failing, damaging it, or loss of efficiency.
0:30:08 Today’s equipment can’t do either.
0:30:11 And so part of the reason that hydrogen
0:30:14 is so expensive to produce this way today
0:30:18 is that not only are you using that intermittent,
0:30:20 effectively free power,
0:30:23 but you’re also drawing power from the grid
0:30:24 to keep the equipment running.
0:30:28 And that drives up the cost of the power.
0:30:31 The power cost is about half of the hydrogen production cost.
0:30:34 – So there’s your half.
0:30:35 There’s your half.
0:30:36 – That’s half the half.
0:30:39 The other half of the half is it comes from the equipment
0:30:41 actually being a lot cheaper.
0:30:43 And the way we do both of these things
0:30:46 is the fundamental like physics of the device.
0:30:48 So we’re a bunch of super nerdy,
0:30:53 like semiconductor device physics and chemist kind of people.
0:30:57 We spent the first couple of years of the company in the lab,
0:31:01 basically reinventing this simple, simple device
0:31:03 that you saw in your high school chem lab, right?
0:31:06 The two wires that made the bubbles.
0:31:09 – The electrolyzer, we can use this piece of jargon, right?
0:31:10 It’s an electrolyzer, that’s the term, right?
0:31:12 – Yeah, yeah, yeah.
0:31:15 So we came up with a way to make the electrolyzer
0:31:18 much, much cheaper, not by using cheaper materials,
0:31:23 but by actually increasing the throughput,
0:31:27 the amount of hydrogen that can be produced from the object.
0:31:30 We’ve since then, in the subsequent two years,
0:31:33 some more recently, we’ve commercialized that.
0:31:35 Our product is, it’s a big product.
0:31:37 It’s funny to call it a product.
0:31:39 It’s about an acre in size.
0:31:43 It’s a plant.
0:31:45 So if you’ve ever driven around parts of Texas,
0:31:47 you’ve seen like small chemical plants,
0:31:49 not big refineries, but small ones.
0:31:50 It looks kind of like one of those,
0:31:52 a bunch of piping and plumbing.
0:31:55 At the heart of it is this electrolyzer,
0:31:57 which is the thing we manufacture ourselves,
0:31:59 that does all the work and the rest of the equipment
0:32:04 around it, gathers the hydrogen, purifies it,
0:32:08 and puts it out in a pipe.
0:32:12 So we figured out how to make that really cheap,
0:32:13 half the cost.
0:32:19 – And the electrolyzer itself, like, what’s it look like?
0:32:20 How big is it?
0:32:22 – It looks about like,
0:32:25 it’s about the size of a refrigerator.
0:32:26 – Okay.
0:32:28 – An American refrigerator, not the little Europeans.
0:32:29 (laughing)
0:32:30 – Bad.
0:32:31 – Yeah.
0:32:35 And it looks, you know, it doesn’t look too,
0:32:37 it’s kind of a rectangular box.
0:32:41 It’s not very interesting to look at, frankly.
0:32:44 And when it’s running, it just sits there.
0:32:45 It doesn’t make any noise.
0:32:48 It doesn’t move, there’s no robots or anything.
0:32:50 There’s a bunch of water running through it.
0:32:51 There’s pumps, right?
0:32:52 Make a bunch of noise.
0:32:53 There’s water running through it,
0:32:56 and out comes water and gas,
0:32:58 watering oxygen in one pipe,
0:32:59 watering hydrogen in the other pipe.
0:33:02 And then there’s a bunch of vessels and pipes
0:33:04 that separate the gases from the water
0:33:08 and purify them and send them out to be used.
0:33:11 So it’s a very, you know,
0:33:14 if you’re a geek like me, it’s really impressive.
0:33:17 If you’re just walking by one and you see it,
0:33:19 you’d go, “Oh, what’s that?”
0:33:21 It’s kind of unimpressive.
0:33:23 Which is how you want one of these things to be.
0:33:24 – For sure.
0:33:27 – You don’t want any drama
0:33:29 when you’re converting power to hydrogen.
0:33:32 – Well, and especially with hydrogen, right?
0:33:34 Like, I mean, I don’t want to, you know,
0:33:35 talk about things blowing up,
0:33:37 but hydrogen can blow up, right?
0:33:40 – Actually, let me take a moment here.
0:33:41 – Yeah.
0:33:43 – Because there’s a lot of talk about that
0:33:46 in the U.S. or a new president-elect,
0:33:48 even made some comments about that.
0:33:51 Hydrogen’s no more explosive than gasoline vapor
0:33:53 or natural gas vapor.
0:33:55 So we already know how to handle things
0:33:58 that blow up when you spark it.
0:34:01 And hydrogen is kind of just like those things.
0:34:04 – Yeah, fair.
0:34:08 So how many of these acre-sized plants exist in the world?
0:34:13 – Well, we are building our first one now,
0:34:15 and it’ll be installed next year
0:34:20 in an undisclosed location in Texas for our customer firms.
0:34:22 So we’re super excited.
0:34:25 You know, in the life cycle of a startup,
0:34:28 this is an incredible moment
0:34:31 where we’ve gone from the laboratory
0:34:34 to kind of a pilot-scale operation,
0:34:38 and now we’re building the first real one.
0:34:41 And, you know, all eyes are on it,
0:34:45 and we’re just nose-down, executing and building it.
0:34:47 You know, once we get the first one
0:34:51 proven and running effectively, which will be next year,
0:34:56 then we expect to be super viable in the market
0:35:00 because our price point is so compelling.
0:35:05 – What are you gonna do with the hydrogen you make in Texas?
0:35:08 – So I can’t tell you because the deal isn’t announced yet.
0:35:11 But it’s exciting.
0:35:16 It’s a fuel that’s gonna be produced using the hydrogen.
0:35:19 – You can’t tell me specifically
0:35:21 what this first one’s gonna do, fine.
0:35:24 But, you know, we talked about this whole kind of range
0:35:27 of things one might do with hydrogen.
0:35:32 What are some of the sort of relatively easier applications?
0:35:35 Like, what’s the low-hanging fruit for green hydrogen?
0:35:36 What’s the first thing you can do?
0:35:37 What can you do tomorrow?
0:35:40 – Yeah, so if everybody in our industry
0:35:43 likes to think that ammonia, which is fertilizer,
0:35:46 is the first thing, it uses hydrogen today,
0:35:49 that hydrogen is made from natural gas usually.
0:35:51 So why not just replace that dirty hydrogen
0:35:53 with this clean stuff, right?
0:35:58 The reason ammonia isn’t happening super fast right now
0:36:02 is because there’s relatively little incentive
0:36:04 to decarbonize ammonia.
0:36:09 No one’s willing to pay extra for clean fertilizer
0:36:13 because food, food security, food cost
0:36:15 is super politically charged.
0:36:18 And obviously, that’s nowhere,
0:36:20 that’s not a place policy makers wanna go.
0:36:24 Potentially even in Europe, we’ll see.
0:36:28 So it turns out the low-hanging fruit might be economically
0:36:33 or politically one of the last things to be done.
0:36:37 – So now we gotta do political techno-economics,
0:36:39 political economy techno-economics,
0:36:42 gotta figure that one out, but yeah, okay, go on.
0:36:43 – Yeah, when you figure that out, tell me,
0:36:44 ’cause I need the way to describe it.
0:36:46 – It’s interesting, right?
0:36:48 Political economy is an underused phrase,
0:36:51 but we want to get political techno-economy,
0:36:53 political techno-economy, no, it’s not.
0:36:54 Okay, so what are you gonna do?
0:36:56 Not fertilizer, but what?
0:37:00 – Yeah, so I’ll rattle off the list of things
0:37:01 that are very active today.
0:37:06 Ironically, decarbonizing the hydrogen input
0:37:10 to refineries in Europe is very active.
0:37:13 – Refineries like oil refineries
0:37:16 that are making gasoline and whatever, yeah.
0:37:18 – That’s right, what am I talking about here?
0:37:21 So a significant part of the CO2 emissions
0:37:25 from a refinery itself are from the production of hydrogen,
0:37:28 which is used to refine oil.
0:37:29 – Uh-huh, uh-huh.
0:37:32 – So hydrogens used for desulfurization, hydrocracking,
0:37:36 it’s like, it’s a big input to oil refineries.
0:37:38 So there are incentives in place
0:37:43 to gradually decarbonize the refinery itself.
0:37:45 Of course, it doesn’t do much to decarbonize
0:37:49 the use of the fuel at the other end, but it’s a start.
0:37:51 – And it can help you scale, right?
0:37:55 Presumably, anything that can get you building is good now.
0:37:56 – You need a job in policy.
0:37:59 – God forbid.
0:38:03 But that’s exactly right, that’s the motivation.
0:38:05 It seems counterintuitive to try to decarbonize
0:38:10 a oil refinery, but because they consume hydrogen today,
0:38:14 it is an obvious place for policy makers
0:38:18 to incentivize the scale and up
0:38:20 of the green hydrogen industry.
0:38:23 So that’s exactly right, you nailed it.
0:38:26 Green steel, I already mentioned that one.
0:38:30 So there’s multiple active, big projects in the world,
0:38:34 for them in Europe to convert steel production
0:38:38 from coal, super dirty to green hydrogen, super clean.
0:38:44 Methanol, methanol is both the chemical input
0:38:49 to plastics as I mentioned, but also is the favorite fuel
0:38:52 for the decarbonization of shipping.
0:38:56 And so big shippers like Maersk,
0:38:57 probably Artivone, you’ve seen their name
0:39:01 on shipping containers, they are building
0:39:05 multi-fuel ships now, which can burn both conventional fuel,
0:39:07 which is super dirty, it’s called bunker fuel.
0:39:08 It’s like the sludge that comes out the bottom
0:39:13 of a refinery column, but also can burn methanol.
0:39:17 And so green methanol, e-methanol, some people call it,
0:39:19 which is made from green hydrogen,
0:39:23 is like a favorite pathway for decarbonization of shipping.
0:39:28 Those are the things that are, oh, another one is SAF,
0:39:30 Sustainable Aviation Fuel.
0:39:31 So what is that?
0:39:34 It’s kerosene, basically it’s chancey kerosene.
0:39:36 And what is kerosene?
0:39:40 It’s a hydrocarbon, it’s like gasoline, but heavier.
0:39:45 And so that can also be made from CO2,
0:39:47 biogenic CO2, and hydrogen.
0:39:50 Or it can be made, as is being done in Europe today,
0:39:55 from used cooking oil and other biological waste
0:39:59 and hydrogen in a specialized refinery.
0:40:05 – So what are you worried about right now?
0:40:08 Not about the world, but about your company.
0:40:10 Like you’re right at this moment,
0:40:12 you’re building first commercial plant,
0:40:14 you have a lot of investment.
0:40:16 Like what’s at the top of your list
0:40:17 of things to worry about?
0:40:22 – Yeah, so as I described,
0:40:25 like this moment for a technology company
0:40:30 going from lab and concept to actual product in the field
0:40:34 is probably the riskiest and most delicate moment
0:40:36 in a company’s life cycle.
0:40:37 Why is that?
0:40:39 Because to do what we’re doing
0:40:41 and to actually deploy commercially,
0:40:44 you have to be at a big enough scale to do that.
0:40:46 And that means you’re spending a lot of money.
0:40:50 And so if you don’t get it perfectly right,
0:40:53 the ramifications, like it can be painful.
0:40:56 So that’s kind of a generic answer.
0:41:01 The bigger worry for me is the stability of policy.
0:41:09 Not just in the US, but globally, around decardinization.
0:41:11 And why am I concerned about that?
0:41:13 Because we’ve seen it before.
0:41:16 We’ve seen it in, you mentioned the German feed-in tariff.
0:41:18 Right, the German feed-in tariff experience,
0:41:20 that’s what created the solar industry.
0:41:23 But then it also got retracted suddenly.
0:41:27 Why? Because of political change within Germany.
0:41:29 Wow, this is costing the taxpayers a lot.
0:41:33 And there was a move to the right in Germany.
0:41:38 And like, so the feed-in tariff was revoked, wound down.
0:41:44 And that was a near-death experience
0:41:46 for the solar industry.
0:41:49 The same thing can happen to us
0:41:53 because we are in the early days of this industry,
0:41:57 extremely policy-sensitive, policy-dependent.
0:42:02 Now, at Electric Hydrogen, our literal goal
0:42:05 is to be independent of policy.
0:42:08 Success for us looks like we are
0:42:12 economically competitive without any policy support.
0:42:14 You wanna be where solar power is now.
0:42:16 Like, nobody’s gonna stop solar now
0:42:17 ’cause it’s the cheapest.
0:42:20 Like, you don’t need any special rules, it’s just cheaper.
0:42:23 People just go to the store and buy solar panels
0:42:25 and get their electricity.
0:42:26 You got it.
0:42:27 And that’s what success looks like.
0:42:30 But we’re competing against an industry
0:42:33 that’s gone down its learning curve for the last 100 years.
0:42:35 And so to compete with that,
0:42:38 like economically, naturally, right out of the gate,
0:42:39 it’s too much to ask.
0:42:41 Meaning the fossil fuel industry.
0:42:43 Yeah, the fossil fuel industry, yeah.
0:42:44 So we need a little time.
0:42:46 How much time?
0:42:47 What’s your guess?
0:42:50 I think we can get there by 2030.
0:42:51 That’s certainly– That’s fast.
0:42:53 That’s certainly our team.
0:42:55 Yeah, it’s fast, but it’s a lifetime
0:42:58 in terms of political wins
0:43:00 and in terms of like a startup company,
0:43:04 you know, crossing the– Capital intensive, yeah.
0:43:06 Yeah, yeah, exactly.
0:43:07 Yeah. Exactly.
0:43:09 So that’s what worries me.
0:43:10 Yeah.
0:43:12 Well, you just gotta make it five years, man,
0:43:14 if you’re right, but five years a long time.
0:43:16 Especially right now.
0:43:17 It’s doubling my life.
0:43:18 It’s doubling my life.
0:43:24 Okay, so that’s what’s to worry about.
0:43:26 Give me the happy 2030 story.
0:43:29 If things, if you don’t,
0:43:32 if you make it to 2030 and it works out like you hope,
0:43:33 what’s it look like?
0:43:34 What’s the company look like
0:43:36 and what’s the world look like?
0:43:39 We’re selling tens of gigawatts a year
0:43:42 of electrolyzers, but more importantly,
0:43:44 we’re ramping up fast,
0:43:49 which means we’re ideally doubling capacity every year
0:43:53 to meet the demand for global projects
0:43:55 to produce green hydrogen.
0:44:00 The world looks like it’s ramping up
0:44:04 green hydrogen production at a rate
0:44:08 at which it will start to become relevant,
0:44:10 kind of relative to the fossil industry
0:44:13 in a matter of years or a decade.
0:44:17 Yeah, and tell me in five or 10 years,
0:44:21 like what are the places where there might be
0:44:24 sort of meaningfully significant use
0:44:27 of green hydrogen in industrial processes?
0:44:31 Yeah, so in five years, certainly in Southern Europe,
0:44:34 where solar and wind are plentiful and available,
0:44:38 North Africa, which is really well positioned
0:44:40 to supply Europe,
0:44:43 and has incredible solar and wind resource.
0:44:50 Texas and kind of, yeah, Texas, Louisiana, Oklahoma,
0:44:53 again, and the wind belt in the US
0:44:57 are like ideal places for the production of the molecules.
0:45:00 You look at places like Chile,
0:45:03 interesting because the Otacama Desert
0:45:05 has both wind and solar,
0:45:08 and the combination is extremely inexpensive.
0:45:12 And the Middle East,
0:45:15 I can’t not mention the Middle East.
0:45:16 That’s the supply side.
0:45:19 That’s where you’re making all this hydrogen.
0:45:21 And then what’s the demand side look like in five years?
0:45:23 Who’s buying it, and what are they doing with it?
0:45:24 Yeah, in five years,
0:45:29 the demand side is largely Europe, Japan, Korea.
0:45:32 Because that’s where the incentives are in place, basically?
0:45:37 It’s, that’s where the problem is hardest to solve.
0:45:38 They have the biggest problem.
0:45:40 And it’s not just incentives.
0:45:42 Like when I say the problem to solve.
0:45:45 They’re most reliant on imported fossil fuel.
0:45:46 You got it, you got it.
0:45:49 So it turns out to not just be a decarbonization problem,
0:45:52 it’s also an energy security problem.
0:45:53 But that’s good for you.
0:45:55 That’s good for you on the policy side,
0:45:59 because there’s more like short-term self-interest,
0:46:01 short-term localized self-interest
0:46:03 in figuring out how to make hydrogen work.
0:46:04 100%.
0:46:06 So those places make a lot of sense
0:46:09 in the five-year timeframe, in the 10-year timeframe.
0:46:11 Again, we come close,
0:46:13 even come close to meeting our goals,
0:46:17 and we’re gonna be knocking on the door of parity in cost
0:46:19 with fossil resources.
0:46:21 And so I think the market is truly global.
0:46:25 And just list off some of the things, not the places,
0:46:28 but some of the things that people will be using
0:46:33 your hydrogen for, clean hydrogen for, in five or 10 years.
0:46:34 Oh, yeah, easy.
0:46:39 So steel, cement, ammonia, fertilizer, shipping fuel,
0:46:46 aviation fuel, chemicals like methanol,
0:46:48 those are the easy ones.
0:46:49 And all of those industries,
0:46:51 I mean, those industries together
0:46:55 make up a very large chunk of carbon emissions.
0:46:59 – Yeah, the ones I rattled off, probably 30 to 40%.
0:47:02 – Yeah, and it’s the 30 to 40%
0:47:05 that seems really hard right now, right?
0:47:07 It’s not the like, oh, great solar power
0:47:10 and batteries for people’s houses and cars.
0:47:12 Like that part, we’ve actually kind of got, which is good.
0:47:14 And so you’re doing the hard part.
0:47:15 – Yep, that’s it.
0:47:22 – We’ll be back in a minute with the lightning round.
0:47:25 (upbeat music)
0:47:35 – Let’s finish with lightning round.
0:47:37 What’s your second favorite element?
0:47:41 – Ooh, my second favorite element.
0:47:44 That’s a great question.
0:47:44 I’d say carbon.
0:47:50 – Interesting, just as a human, as an organism or why?
0:47:51 Why carbon?
0:47:56 – Well, it came to mind because hydrocarbons are awesome.
0:47:58 We just need to make them clean.
0:47:59 – Yeah.
0:48:03 What do you think is the most underrated power tool
0:48:05 for home use?
0:48:09 – Yeah, so I have a battery-powered Makita angle grinder
0:48:12 that I use all the time.
0:48:14 And it’s arguably one of my favorite tools.
0:48:16 Yeah, last time I used it,
0:48:20 I used it to cut off a hard to reach metal bolt.
0:48:21 – Oh, I love that, okay.
0:48:22 Or there’s sparks?
0:48:23 Sounds like sparks.
0:48:24 – Yeah, it makes lots of sparks.
0:48:25 – That’s good.
0:48:28 – It’s one of the reasons it’s one of my favorite tools.
0:48:29 – ‘Cause it looks cool.
0:48:31 What’s your favorite song right now
0:48:33 to listen to very loud?
0:48:36 – Who?
0:48:39 Led Zeppelin, Brony or Stodd.
0:48:41 – Great.
0:48:42 – Just makes me happy.
0:48:45 Every time I listen to it, it just makes me happy.
0:48:46 – Make you feel 20?
0:48:49 I think if I put that song on, it would make me feel 20.
0:48:52 Or at least make me remember feeling 20.
0:48:54 – And feeling 20 makes me happy.
0:48:56 – Yeah, that’s nice.
0:48:58 Probably, it would probably make me happier
0:49:00 than I actually felt when I was 20, which is–
0:49:02 – Yeah, I think that’s true as well.
0:49:04 – Yeah, it’s definitely–
0:49:07 – Last one, I read in the Wall Street Journal
0:49:10 that your co-founder keeps, quote,
0:49:14 a secret document of the company’s failures and fixes
0:49:17 that only top engineers can access.
0:49:19 And that you cannot access.
0:49:22 Did you know about this?
0:49:24 Did you learn about it by reading the Wall Street Journal?
0:49:29 – I don’t know if that was a misquote or not,
0:49:32 but yeah, it’s actually not true.
0:49:34 But it was a nice piece of story.
0:49:35 – Are you sure?
0:49:35 Are you sure?
0:49:37 Or are they just telling you that at the company?
0:49:40 Maybe they’re like, no, no, the Journal got that wrong.
0:49:42 There’s no secret document.
0:49:45 – With my co-founder, Dave, you never actually know.
0:49:48 – Okay, keeps it interesting.
0:49:53 Anything else we should talk about?
0:49:54 – It’s been great.
0:49:55 – Yeah, I really enjoyed it.
0:49:57 – Super fun.
0:49:59 (upbeat music)
0:50:06 – Rafi Garabedian is the co-founder and CEO
0:50:07 of Electric Hydrogen.
0:50:11 Today’s show was produced by Gabriel Hunter Chang.
0:50:13 It was edited by Lydia Jean Kott
0:50:16 and engineered by Sarah Brugier.
0:50:20 You can email us at problem@pushkin.fm.
0:50:22 I’m Jacob Goldstein and we’ll be back next week
0:50:24 with another episode of What’s Your Problem.
0:50:26 (upbeat music)
0:50:29 (upbeat music)
0:50:33 (upbeat music)
0:50:43 [BLANK_AUDIO]
0:00:07 Pushkin.
0:00:15 Our civilization is built on hydrocarbons.
0:00:20 Oil and natural gas and coal light up our houses
0:00:22 and keep us warm in the winter
0:00:26 and propel our cars and our ships and our planes.
0:00:29 They provide the heat companies need to make stuff
0:00:32 and hydrocarbons even provide the hydrogen
0:00:35 to make the fertilizer to grow our food.
0:00:39 The problem with hydrocarbons, of course, is the carbon.
0:00:42 It binds with oxygen, goes into the atmosphere
0:00:44 and warms the earth.
0:00:47 So humanity is in the process of trying to very quickly
0:00:51 come up with cheap ways to power our civilization
0:00:53 without hydrocarbons.
0:00:55 And as we’ve been discussing on the show
0:00:58 for the past few weeks, we’re actually making progress.
0:01:02 Solar energy in particular has become wildly cheap.
0:01:04 In some parts of the world, in fact,
0:01:07 it’s now free in the middle of sunny days.
0:01:10 And it’s likely that solar energy will be free
0:01:12 in the middle of the day in much more of the world
0:01:14 in the next few years.
0:01:16 The triumph of solar is gonna go a long way
0:01:20 toward powering our houses and factories and cars.
0:01:24 But there’s a lot that solar energy cannot do.
0:01:25 For reasons of basic physics,
0:01:27 it’s really hard to use solar energy
0:01:30 or solar energy combined with batteries
0:01:33 to power container ships or commercial planes.
0:01:36 It’s also hard to store large amounts of solar energy
0:01:38 for long periods of time.
0:01:40 And it’s hard to move it around the planet,
0:01:42 hard to move it across oceans.
0:01:45 So a lot of people step back
0:01:48 and they look at hydrocarbons at fossil fuels
0:01:51 and they say, you know, most of the energy in hydrocarbons
0:01:55 comes from the hydro part, the hydrogen.
0:02:00 What if we could make clean fuel that was like hydrocarbons
0:02:01 but without the carbon?
0:02:05 What if we could take that cheap, abundant solar energy
0:02:09 and use it to make pure hydrogen?
0:02:10 That would be a huge step forward
0:02:13 in figuring out how to live without hydrocarbons.
0:02:16 (upbeat music)
0:02:22 I’m Jacob Goldstein and this is What’s Your Problem.
0:02:25 This is the third of three shows we’re doing
0:02:27 about the triumph of solar energy,
0:02:29 about how solar became so cheap
0:02:31 and what cheap, abundant solar energy
0:02:34 is gonna mean for the world.
0:02:36 My guest today is Rafi Garabedian.
0:02:39 Rafi was previously the chief technology officer
0:02:43 at First Solar, a company that makes solar panels.
0:02:47 Now he is the co-founder and CEO of Electric Hydrogen,
0:02:51 a company that has raised hundreds of millions of dollars
0:02:54 in its quest to solve a big problem.
0:02:57 How do you use intermittent solar and wind power
0:02:58 to make hydrogen?
0:03:01 And crucially, how do you do it cheaply enough
0:03:04 to make that hydrogen economically viable?
0:03:08 – So you can take this free solar and wind
0:03:10 that’s available when no one needs it,
0:03:14 you can convert it to hydrogen and use that hydrogen
0:03:19 to make things like steel and fertilizer and fuels.
0:03:25 And the fuels, if I understand correctly,
0:03:30 I mean, when you burn hydrogen, it just makes water, right?
0:03:32 Like that’s part of the genius.
0:03:35 – Yeah, when you burn hydrogen, it just makes water.
0:03:36 It’s super simple, right?
0:03:38 It generates heat like any other fuel
0:03:42 and you can use that in an engine or a turbine or whatever,
0:03:45 but it emits water instead of CO2 and water.
0:03:47 So that’s the beauty of it.
0:03:52 But the rub is hydrogen by itself is hard to utilize.
0:03:56 And that’s because it’s not a liquid, it’s a gas
0:03:59 and it’s a gas that’s hard to handle
0:04:01 because the molecule is so small.
0:04:06 And so utilizing hydrogen directly as a fuel
0:04:10 requires a retooling of infrastructure.
0:04:14 When I say infrastructure, I mean pipelines,
0:04:17 shipping vessels to move the stuff around,
0:04:21 even the engines and turbines that would burn it are different.
0:04:27 And so hydrogen itself as a fuel is the end game.
0:04:29 And I would say it’s gonna happen,
0:04:31 but it’s going to take a long time to happen
0:04:36 because we’ve spent arguably over a hundred years
0:04:41 building infrastructure, engines, turbines, pipelines,
0:04:46 vessels, all that stuff to move and consume hydrocardins.
0:04:49 And we’re gonna have to retool all that stuff
0:04:51 to move and consume hydrogen.
0:04:53 As the replacement.
0:04:58 – So if that’s the long game, what’s the medium game?
0:05:00 – Yeah, that’s a great question.
0:05:01 So that’s the long game.
0:05:03 The medium game is convert the hydrogen
0:05:07 into the molecules we already know and love.
0:05:09 Well, kind of love, except for there.
0:05:10 – No one use, no one use.
0:05:15 – No one use in mind bogglingly big quantities.
0:05:19 And if you think about hydrocardins fuels
0:05:22 and how much we use globally,
0:05:27 I can’t even express how big an industry that is.
0:05:31 – Just how much oil, how many hydrocarbons
0:05:33 we’re burning right this minute.
0:05:34 – Right this minute.
0:05:38 And society, as we noticed, entirely depended on them.
0:05:40 Energy is prosperity.
0:05:43 Energy is everything that we do.
0:05:45 – Is material well-being, yeah.
0:05:49 – So the short game, the medium game
0:05:51 is convert the hydrogen, which we know how to do.
0:05:54 Thermal-mechanically, we know how to convert hydrogen
0:05:56 and CO2, which we can capture
0:05:59 from the atmosphere from other processes.
0:06:01 We know how to combine those two
0:06:05 to make everything from methane, which is natural gas,
0:06:07 all the way to jet fuel.
0:06:10 And so once we do that,
0:06:12 we don’t have to convert or retool
0:06:15 all of that industrial infrastructure.
0:06:19 – And why is that version cleaner?
0:06:22 Where are you getting the CO2 from?
0:06:24 – Yeah, that’s also a great question.
0:06:28 So the source of the CO2 is super important
0:06:32 for the cleanliness, the carbon profile
0:06:35 of these pathways, these intermediate pathways.
0:06:40 Because CO2 that is clean and clean would be biogenic.
0:06:42 It comes from biological sources.
0:06:45 Well, that’s a shorthand of way of saying
0:06:47 it’s captured from the atmosphere, right?
0:06:50 ‘Cause biological CO2, it comes from plants
0:06:52 and where does that come from?
0:06:53 It comes from the air.
0:06:55 So that’s a form of carbon capture,
0:06:58 but there’s just not enough of it available
0:07:02 to make the amounts of fuels that we need.
0:07:06 And so it is a limited pathway, but geez,
0:07:09 I mean, we can go down that pathway for 10 years
0:07:12 and not run out of CO2 sources.
0:07:15 And in the meantime, we can and are,
0:07:17 in fact, already starting as a society
0:07:19 to build our hydrogen infrastructure.
0:07:22 If you go to Europe, there are in Germany,
0:07:25 in the Netherlands, there are hydrogen pipelines,
0:07:28 dedicated hydrogen pipelines being built today.
0:07:30 – So good.
0:07:33 So we’re going in reverse chronological order.
0:07:34 We started with the long game
0:07:35 and then we did the medium game.
0:07:38 And now you’re getting to the present, right?
0:07:40 They’re building hydrogen pipelines in Europe.
0:07:44 Now people make hydrogen today for industrial reasons,
0:07:47 but that itself is a dirty process, right?
0:07:51 The sort of, before we can get to the happy world
0:07:53 of just hydrogen or even the semi-happy world
0:07:56 of hydrogen plus captured carbon,
0:07:58 you have to figure out how to make hydrogen
0:08:01 without emitting carbon in the first place, right?
0:08:04 That is your immediate project.
0:08:05 – You got it.
0:08:08 And I came, I had my co-founders came at this problem
0:08:10 actually from the opposite direction.
0:08:14 We’re solar, we’re solar people, you know,
0:08:16 is solar and wind like renewable power people.
0:08:21 And so like we came at it from, gee,
0:08:23 this energy resource is really cheap.
0:08:26 It’s really scalable, but it’s limited
0:08:28 in how much we can deploy it.
0:08:31 We got to think of a better way to use it.
0:08:33 Hey, this hydrogen pathway opens up
0:08:38 like a whole nother market that’s even bigger
0:08:40 than the electric power market.
0:08:42 Let’s try to do that.
0:08:43 – I mean, there’s a way where like,
0:08:47 if you can turn intermittent clean energy into hydrogen,
0:08:49 it’s like fuel, right?
0:08:52 Like hydrogen gas, like it’s kind of a pain in the ass
0:08:55 to move around and we’re not set up to use
0:08:58 that kind of fuel, but it has the qualities of fuel,
0:09:00 not the qualities of electricity, right?
0:09:02 It’s transportable, storable.
0:09:04 So you have this big idea.
0:09:06 It’s an obvious question, right?
0:09:09 An interesting, huge question right now.
0:09:10 Oh my God, solar power is free.
0:09:12 How do we leverage that?
0:09:13 – Yeah.
0:09:14 – You know, people are trying to make weirdo
0:09:16 long duration batteries.
0:09:18 That’s another version of it.
0:09:21 How do you land at hydrogen?
0:09:23 – Yeah, I’m a big fan of long duration batteries
0:09:28 ’cause the grid should be able to take more solar and wind.
0:09:33 It still doesn’t solve the other half of global emissions,
0:09:36 which are all these chemical industries,
0:09:38 and think about Japan.
0:09:40 Japan doesn’t have fossil resources.
0:09:44 It doesn’t have the land or the solar and wind resource
0:09:45 to power its own economy.
0:09:49 So, you know, the choices for Japan are nuclear,
0:09:51 which is problematic for Japan.
0:09:53 Or importing- – Because of Fukushima,
0:09:58 because they had like a Tsunami and a nuclear accident.
0:09:59 – Yeah, it wasn’t a good thing.
0:10:02 Or, which is what Japan does,
0:10:04 importing fuel from other places in the world.
0:10:07 You can’t import batteries that are charged.
0:10:08 – Yeah.
0:10:09 – That’s not a thing, right?
0:10:11 And when you think about Japan, it’s an isolated case.
0:10:13 It’s really clear and obvious,
0:10:18 but Europe imports most of its energy as an example, right?
0:10:20 And that’s a huge economy.
0:10:24 So moving energy- – From Russia awkwardly.
0:10:25 – Awkwardly from Russia.
0:10:29 And now more and more LNG from the U.S.,
0:10:31 which by the way- – Liquid natural gas.
0:10:32 – Liquid natural gas.
0:10:37 – Yeah, so wires work really well in continents, places,
0:10:40 where you have stronger renewable resource
0:10:42 and a lot of people.
0:10:45 But that is not characteristic of a lot of the world.
0:10:47 And so when we think globally,
0:10:49 and energy is a global industry, right?
0:10:51 It’s a global problem.
0:10:54 We think globally, you’ve got to be able to move energy
0:10:57 in some form other than electrons.
0:11:01 And that takes us to hydrogen or it’s, you know,
0:11:04 it’s derivative, it’s like fuels, other hydrocarbons.
0:11:06 As the way we do this, right?
0:11:10 That’s the only way humanity has come up with
0:11:13 to move fast amounts of energy to where people need it.
0:11:17 – I mean, it’s the genius of fossil fuel, right?
0:11:20 Like fossil fuel is an extraordinary
0:11:23 energy storage mechanism, right?
0:11:24 Like it’s incredible.
0:11:25 You can move it around.
0:11:26 You can leave it in a tank.
0:11:28 You can put it on a ship.
0:11:29 It’s full of energy.
0:11:31 You can burn it whenever you want.
0:11:32 Like it’s tough to beat.
0:11:35 – It is super tough to beat.
0:11:39 – And we have 150 years of optimizing for it
0:11:42 and building a world around it.
0:11:46 – And if it weren’t for climate change,
0:11:48 I wouldn’t be doing what I’m doing
0:11:53 because fossil fuels are awesome in every other way.
0:11:55 Like you described, right?
0:11:56 They’re easy to store.
0:11:56 They’re easy to move.
0:11:58 They’re super cheap to get.
0:12:03 – Wow, like it’s such a gift nature’s given us
0:12:06 and we’ve been using it for a long time.
0:12:08 – Gift, gift asterisk.
0:12:09 – Yeah, gift asterisk.
0:12:12 Well, we’ve gotten smarter, right?
0:12:12 We’ve gotten smarter
0:12:16 and we’ve started to realize the unintended consequences
0:12:18 of this resource we have.
0:12:22 And now we gotta, you know, luckily, hopefully maybe
0:12:25 we have time enough to get out of our own way
0:12:27 and start to convert.
0:12:30 – So, okay, so hydrogen lets you do all these things.
0:12:34 It’s harder, but the big problem is it’s more expensive.
0:12:37 It’s a lot more expensive today.
0:12:38 – Well, and let’s just be clear.
0:12:40 There’s, hydrogen means different things.
0:12:43 And like there is, people do make hydrogen
0:12:46 at industrial scale now, but they do it
0:12:48 in a way that emits carbon dioxide.
0:12:50 That is like not at all about solving
0:12:51 the kinds of problems we’re talking, right?
0:12:54 So the fundamental hard thing is using electricity
0:12:55 to make hydrogen,
0:12:57 which is technically not hard,
0:13:00 but nobody’s figured out how to do it
0:13:01 in an economical way, right?
0:13:02 That’s the big thing.
0:13:04 – Exactly, that’s exactly it.
0:13:06 People have been doing it since, I don’t know,
0:13:08 60 years ago, 65 years ago.
0:13:10 – Right, like, I mean,
0:13:12 my high school chemistry teacher did it, right?
0:13:15 He made this janky electrolyzer where he had a battery
0:13:17 and then he ran wires from the battery
0:13:18 into a thing of water,
0:13:22 and he put upside down test tubes in the water,
0:13:24 and one of the test tubes filled up with oxygen
0:13:26 and the other one filled up with hydrogen.
0:13:29 – That basic demonstration in high school chem lab
0:13:34 or physics lab is the core physical phenomena
0:13:39 that is being scaled up into modern electrolyzers.
0:13:43 That’s the machine that does this on an industrial scale.
0:13:48 Today, that equipment is inefficient and super expensive.
0:13:51 And because it’s so expensive,
0:13:53 you have to run it all the time.
0:13:56 And so, where, yeah, so, you know,
0:13:58 think about like, you own this really expensive thing,
0:14:00 you wanna use it all the time.
0:14:03 – Yeah, right, because the value you get out of it
0:14:05 is like the amount you pay for it
0:14:07 divided by how much you use it, right?
0:14:10 – Exactly, you’ve tied up all this money in a thing,
0:14:13 and you’ve got it, that money has to be put to work, right?
0:14:15 – And so, if your whole case is like,
0:14:18 oh, we’re gonna have intermittent free energy,
0:14:20 that’s not gonna work, yeah.
0:14:23 – That’s right, where people do electrolysis today
0:14:26 is where they have cheap hydropower.
0:14:29 And, you know, you think of like Sweden and Norway,
0:14:31 the Norwegians were pioneers of this,
0:14:33 ’cause they had a lot of hydropower in remote places
0:14:35 without a lot of people.
0:14:36 Hey, if we could convert that to hydrogen
0:14:38 and make fertilizer, wouldn’t that be great?
0:14:42 Right, so that’s been going on for half a decade.
0:14:43 – Oh, interesting.
0:14:44 – In that part of the world.
0:14:47 Okay, but hydropower isn’t all that scalable.
0:14:48 There’s gigawatts of it out there,
0:14:50 but you can’t build much more
0:14:55 because it has its own environmental impacts, right?
0:14:57 So, okay, so that’s the core issues.
0:14:59 This equipment’s super expensive.
0:15:01 It’s not very efficient.
0:15:04 And so that limits our ability to use it
0:15:08 from with this powered by this cheap, abundant,
0:15:10 but intermittent renewable resource,
0:15:12 all this excess solar and wind.
0:15:14 – It’s always techno economics, right?
0:15:16 Like the whole energy transition,
0:15:19 it’s not really a technical problem clearly at this point.
0:15:21 It’s an economic problem.
0:15:23 It’s the techno economic problem.
0:15:26 – Yup, and the solution to the techno economic problem
0:15:30 is largely technical innovation,
0:15:34 but with business model and economic innovation wrapped
0:15:35 around it.
0:15:36 – And scale, right?
0:15:38 And scale, it seems like, yeah.
0:15:41 – Yeah, yeah, yeah, absolutely, scale as well.
0:15:43 So let’s talk about scale.
0:15:47 So most electrolyzers, big ones,
0:15:52 are one, maybe two or three megawatts.
0:15:54 Those are the biggest ones out there.
0:15:58 A megawatt is like how to put that in real terms.
0:16:00 It sounds like a lot of power.
0:16:01 It kind of is a lot of power,
0:16:05 but it’s nothing compared to the industries
0:16:07 we’re talking about and the uses we’re talking about.
0:16:12 So if you think about like an ammonia plant,
0:16:16 you would need a thousand of those
0:16:20 to make enough hydrogen to run an ammonia chemical plant.
0:16:22 – One, that’s one ammonia plant.
0:16:23 That’s one.
0:16:24 – One of thousands in the world.
0:16:25 – Yeah.
0:16:28 So do you need to go up and buy a thousand X?
0:16:30 Is that about the way to go up?
0:16:32 – You need to go up by about a hundred X.
0:16:33 – Okay.
0:16:36 And then you send 10 of them to the plant
0:16:37 and it makes economic sense?
0:16:38 – That’s it, that’s it.
0:16:42 So it is all about techno economics, which by the way,
0:16:44 so the company I run is a startup.
0:16:45 We’ve been around for a little over four years,
0:16:47 venture financed tech startup.
0:16:51 This is an insane thing for a startup to try to do.
0:16:54 – Yes, well, you’ve raised a ton of money, right?
0:16:55 Like it’s wildly capital intensive.
0:16:57 You’ve raised hundreds of millions of dollars.
0:17:00 It’s an impressive display of venture capital
0:17:02 that people have invested in you,
0:17:07 given you that much money on a kind of long shot thing,
0:17:09 right, on a certainly hard thing that might not work.
0:17:13 – Super, super intense.
0:17:16 And I’m super grateful that the venture community,
0:17:20 if you look at the venture capital communities experience
0:17:23 with what they call clean tech, right?
0:17:24 This is like technology companies
0:17:29 that are trying to do like big, hard transformations
0:17:30 of industry to make them cleaner.
0:17:36 There was clean tech 1.0, maybe a decade or more ago
0:17:40 and a lot of people lost a lot of money, right?
0:17:43 In that first foray into clean tech.
0:17:46 – I mean, you happen to work at one of the only U.S. companies
0:17:48 that really came through that, right?
0:17:51 Maybe that helps raising money this time.
0:17:52 – It certainly doesn’t hurt.
0:17:54 Absolutely, it certainly doesn’t hurt.
0:17:57 Yeah, I spent 13 years at First Solar
0:17:59 and it is literally one of the, as you said,
0:18:02 the only U.S. companies that’s still thriving
0:18:04 in these industries.
0:18:07 But when we started this company,
0:18:09 we, I think we started it at a great time,
0:18:12 clean tech 2.0, if you will.
0:18:15 There was a lot of venture capital interest for good reason
0:18:20 because political resolve to do the things necessary
0:18:26 to start to address climate change was strong.
0:18:28 And that provides like the economic footing,
0:18:31 the support necessary to,
0:18:35 for kind of new technologies to enter the market.
0:18:37 When something new enters the market,
0:18:38 it’s never competitive.
0:18:41 – Yeah, what’s interesting in the solar story,
0:18:45 how, at least in Jenny Chase’s version of the story,
0:18:47 which seems like the most credible version I’ve come across,
0:18:51 the German feed-in tariff of 2004
0:18:52 is this sort of inciting event.
0:18:54 It’s just this one policy change
0:18:57 in a medium-sized rich country
0:19:02 kicks off this amazing run down the experience curve,
0:19:05 you know, of solar panels getting cheaper and cheaper
0:19:09 until now without incentives like solar’s gonna win.
0:19:10 It’s gonna keep winning.
0:19:13 It’s not subject to these political wins.
0:19:13 – You got it.
0:19:15 I won’t repeat the story,
0:19:17 though I personally lived through it,
0:19:19 but it sounds like you and your listeners
0:19:21 have already heard it and your recounting is accurate.
0:19:24 We’re not for the German feed-in tariff for solar
0:19:25 probably would not exist,
0:19:28 nor would the solar industry, as we know it.
0:19:31 China certainly would not have scaled up their industry
0:19:34 dramatically and they’re the dominant supplier
0:19:38 of solar panels in the world by a large margin.
0:19:44 But as a result of all that, the industry got to scale,
0:19:45 got to better and better economics,
0:19:48 and it’s not just the solar panels, the equipment,
0:19:49 but it’s also, as you said,
0:19:54 the experience of building solar farms,
0:19:56 the learning and the cost reduction
0:19:58 that comes from repetition, right?
0:20:00 You build one house, it’s kind of expensive.
0:20:02 You build 100 houses, they get cheaper and cheaper.
0:20:04 It’s the same with solar and wind.
0:20:07 – Houses are a weird example, though.
0:20:08 Houses are like the ones that–
0:20:08 – That was a bad example.
0:20:10 – There have been terrible productivity gains.
0:20:13 Everything else gets cheaper when you build more of them.
0:20:15 Houses weirdly refractory to productivity gains.
0:20:18 – That was a really bad example, I agree.
0:20:24 – Still to come on the show,
0:20:27 how Rafi and his colleagues at Electric Hydrogen
0:20:30 plan to cut the cost of clean hydrogen in half.
0:20:33 (upbeat music)
0:20:42 – So is the Inflation Reduction Act,
0:20:46 this bill, this US law passed a few years ago,
0:20:48 is this like the German feed-in tariff
0:20:50 of 2004 moment for hydrogen?
0:20:51 Is that what you’re hoping?
0:20:53 – Yeah, so the answer is no.
0:20:55 – Okay, interesting, tell me more.
0:20:57 – Yeah, interestingly, the equivalent
0:21:00 of the German feed-in tariff today
0:21:03 is not the Inflation Reduction Act
0:21:05 and it’s provisions for hydrogen,
0:21:08 but it’s what’s going on in European policy.
0:21:13 – Okay, well that’s heartening for semi-obvious reasons.
0:21:14 Go on.
0:21:17 (laughing)
0:21:19 – Yeah, yeah.
0:21:21 – So what’s happening in Europe?
0:21:23 – So in the European Union,
0:21:27 there are a number of policy frameworks,
0:21:30 but what’s called red two or red three,
0:21:34 which are laws in Europe.
0:21:38 These laws in Europe provide a framework
0:21:41 for carrots and sticks to decarbonize
0:21:44 certain high-emitting industries.
0:21:49 It all has to do with the utilization of renewable energy
0:21:51 to decarbonize things like steel,
0:21:56 concrete, fertilizer, chemical industries, energy.
0:21:59 Those heavy industry ones that you mentioned
0:22:03 are the classic ones we haven’t figured out yet.
0:22:07 Classic hard to do with electricity.
0:22:08 Even if you’ve got the electricity,
0:22:12 like cement famously very hard to decarbonize,
0:22:14 steel very hard, fertilizer very hard,
0:22:16 like we don’t know how to do it yet.
0:22:18 – Well, interestingly, we do know how to do it.
0:22:20 – We don’t know how to do it economically yet.
0:22:22 – That’s it, you got it.
0:22:25 – Which ends up being the same thing
0:22:27 with commodity businesses like that.
0:22:30 – 100%, the only value in a commodity business
0:22:32 is the price, right?
0:22:35 There’s no other like, you can’t make it prettier,
0:22:38 you can’t make it faster, you can’t make it cooler.
0:22:40 It’s just, the only thing you can do
0:22:42 is make it cheaper. – It’s just fertilizer bro, yeah.
0:22:43 – Yeah, yeah, yeah.
0:22:46 Okay, so the European kind of legal framework,
0:22:51 policy framework actually is what’s driving this industry
0:22:55 to produce hydrogen and chemicals from hydrogen
0:22:58 because it’s driving consumption,
0:23:01 demand for those models, for those products.
0:23:03 – Because basically they get a subsidy
0:23:07 if they consume hydrogen and they pay a fee
0:23:09 if they don’t, more or less.
0:23:12 – And it’s that last piece, the penalty if you don’t.
0:23:16 – The stick, the stick. – The stick is what actually works
0:23:19 to create demand, that’s right.
0:23:22 Because, and in contrast, what we have in the US
0:23:25 with the IRA, and we can talk later
0:23:29 about what’s actually going on with it if you care to.
0:23:34 But in the US, we just have a production-side subsidy
0:23:35 vis-a-vis a tax credit.
0:23:39 That doesn’t do anything to cause the demand side
0:23:40 to buy the stuff.
0:23:46 – Yes, I guess the hope would be that the production subsidy
0:23:51 would lower the price at which producers could sell
0:23:54 which would then increase demand.
0:23:57 – That is the, that would be the naive hope.
0:23:58 – Naive fare, yeah.
0:24:00 – Yeah, we’ve never seen production-side–
0:24:02 – Naive hope was my first album.
0:24:06 Go on, we’ve never seen–
0:24:09 – We’ve never seen production-side support alone
0:24:13 kick off a new energy industry.
0:24:15 It’s always taken, yeah.
0:24:17 – You have to subsidize demand.
0:24:20 – Yeah, you somehow have to get the industry
0:24:23 over that initial hump where the supply-side subsidy
0:24:27 isn’t quite sufficient to cause people to change behavior.
0:24:30 – Interesting.
0:24:34 Well, so does that mean that whatever happens
0:24:39 with the regime change in Washington
0:24:41 isn’t gonna be that big of a deal for you?
0:24:44 You’re like, oh, we weren’t that into the IRA anyway?
0:24:49 – Yeah, kind of, we were, and frankly,
0:24:52 still are super hopeful that the rules
0:24:55 for using the IRA tax credit will get clarified
0:24:57 and then we’ll be able to actually use it.
0:24:58 ‘Cause we haven’t been able to use it yet
0:25:01 ’cause the current administration hasn’t set the rules.
0:25:03 – Okay. – The law exists.
0:25:07 It’s kind of a walkie-talkie thing, but it’s unclear.
0:25:12 It’s frankly unclear how the new administration
0:25:13 is gonna deal with this.
0:25:18 I think there’s reason to believe it could go either way.
0:25:19 So we’re waiting to see.
0:25:22 – Yeah, I mean, it seems like a lot of the IRA
0:25:26 might be unchanged, right?
0:25:29 I know there was a group of Republican congressmen
0:25:31 that recently wrote to the Speaker of the House
0:25:33 saying don’t cut the IRA,
0:25:36 saying it’s creating jobs in our industries.
0:25:40 It does seem like it was written in such a way
0:25:42 or at least is being implemented in such a way
0:25:45 in other sectors at least
0:25:48 that it does have some staying power politically.
0:25:52 – The risk of being political and super cynical,
0:25:55 which I tend to be when I get political,
0:26:00 Washington’s about money and the IRA channels money.
0:26:04 Disproportionately, it turns out, to Republican states.
0:26:08 And so there is real support,
0:26:09 not only principal support,
0:26:12 because not all Republicans are blind to climate change
0:26:16 and the need to transform the energy sector.
0:26:18 So I think that needs to be said
0:26:21 and realized that it’s not monolithic.
0:26:23 Hey, we don’t care, right?
0:26:26 There’s real support for solar and wind in particular,
0:26:29 but also for other decarbonization pathways
0:26:31 amongst Republicans,
0:26:34 but also like the money matters.
0:26:37 And so red states are getting a lot of money
0:26:38 from the IRA potentially.
0:26:42 And so gutting that would be, I think, politically challenging.
0:26:45 But this is a non-linear time, right?
0:26:50 This is a time when I think it’s very hard to predict
0:26:52 what’s gonna go on in Washington, so we’ll see.
0:26:53 – Yeah, yeah, yeah.
0:26:58 So, okay, so you’re saying you have a pathway in Europe.
0:27:01 Anyways, let’s talk more about
0:27:04 how you’re actually trying to do this thing, right?
0:27:08 So you have in front of you a sort of technical problem,
0:27:13 which is making green hydrogen cheaply enough
0:27:16 to make economic sense, right?
0:27:20 And you have certain tailwinds in the form of regulations
0:27:21 that are encouraging this,
0:27:23 but you’re still not there yet, right?
0:27:24 Even with those tailwinds.
0:27:27 Is that a fair characterization of where you are now?
0:27:29 – Yeah, that’s a totally fair assessment
0:27:30 for the whole industry, actually.
0:27:34 So if you think about the whole burgeoning,
0:27:38 hopefully soon burgeoning industry of electrolytic.
0:27:42 – Soon to be burgeoning, today it’s nascent,
0:27:44 tomorrow it’s burgeoning.
0:27:45 – That’s right.
0:27:47 If you think about like green hydrogen
0:27:50 or electrolytic hydrogen, whatever you wanna call it,
0:27:56 as an industry, it’s gotten a lot of excitement
0:27:59 because, again, the policy framework has matured
0:28:01 and is there to support it.
0:28:06 But not a lot of big projects have been built yet.
0:28:08 And it’s because it’s too expensive.
0:28:12 That is exactly why my company,
0:28:14 Electric Hydrogen, exists.
0:28:17 Like we exist because we actually recognize
0:28:20 that it’s too expensive and have developed
0:28:23 in our commercializing technical solution
0:28:27 to make it much cheaper by a factor of two,
0:28:30 like half the cost.
0:28:31 – Does half get you there?
0:28:34 If you actually do cut the price in half,
0:28:37 then does it work under, say, the European regime right now?
0:28:38 – Yeah, totally.
0:28:42 So in Europe, the typical project
0:28:45 using other technology companies’ equipment,
0:28:47 and I’ll name the big ones, like Siemens
0:28:50 or Tees & Crew, right, big industrial companies.
0:28:52 – Just big incumbent industrial companies.
0:28:53 – Yeah, they make these things.
0:28:55 They make equipment to do this stuff.
0:28:59 The cost of producing hydrogen using that gear in Europe today
0:29:03 is probably $5.50 a kilo of hydrogen,
0:29:06 so maybe $6.00 a kilo of hydrogen.
0:29:08 If you make hydrogen from natural gas in Europe today,
0:29:12 it probably costs around $3.00 a kilo.
0:29:13 – Oh, okay.
0:29:14 – We think we’re already there.
0:29:15 We think we’re already at a place
0:29:19 where we can enable economic parity,
0:29:21 or close to economic parity,
0:29:24 with the fossil incumbent,
0:29:27 but in a very fundamentally clean way.
0:29:29 – So how do you do it?
0:29:32 How do you cut the cost in half?
0:29:36 – Yeah, it all starts with the realization,
0:29:39 which you struck on really early in this conversation,
0:29:44 that cheap power is plentiful, but it’s not steady.
0:29:46 – Yeah.
0:29:47 – Right?
0:29:49 So the equipment that you use to convert
0:29:52 that unsteady intermittent cheap power to hydrogen
0:29:55 has to be really, really inexpensive,
0:29:57 but it also has to be flexible.
0:30:00 It has to be able to run up and down, up and down quickly
0:30:05 without failing, damaging it, or loss of efficiency.
0:30:08 Today’s equipment can’t do either.
0:30:11 And so part of the reason that hydrogen
0:30:14 is so expensive to produce this way today
0:30:18 is that not only are you using that intermittent,
0:30:20 effectively free power,
0:30:23 but you’re also drawing power from the grid
0:30:24 to keep the equipment running.
0:30:28 And that drives up the cost of the power.
0:30:31 The power cost is about half of the hydrogen production cost.
0:30:34 – So there’s your half.
0:30:35 There’s your half.
0:30:36 – That’s half the half.
0:30:39 The other half of the half is it comes from the equipment
0:30:41 actually being a lot cheaper.
0:30:43 And the way we do both of these things
0:30:46 is the fundamental like physics of the device.
0:30:48 So we’re a bunch of super nerdy,
0:30:53 like semiconductor device physics and chemist kind of people.
0:30:57 We spent the first couple of years of the company in the lab,
0:31:01 basically reinventing this simple, simple device
0:31:03 that you saw in your high school chem lab, right?
0:31:06 The two wires that made the bubbles.
0:31:09 – The electrolyzer, we can use this piece of jargon, right?
0:31:10 It’s an electrolyzer, that’s the term, right?
0:31:12 – Yeah, yeah, yeah.
0:31:15 So we came up with a way to make the electrolyzer
0:31:18 much, much cheaper, not by using cheaper materials,
0:31:23 but by actually increasing the throughput,
0:31:27 the amount of hydrogen that can be produced from the object.
0:31:30 We’ve since then, in the subsequent two years,
0:31:33 some more recently, we’ve commercialized that.
0:31:35 Our product is, it’s a big product.
0:31:37 It’s funny to call it a product.
0:31:39 It’s about an acre in size.
0:31:43 It’s a plant.
0:31:45 So if you’ve ever driven around parts of Texas,
0:31:47 you’ve seen like small chemical plants,
0:31:49 not big refineries, but small ones.
0:31:50 It looks kind of like one of those,
0:31:52 a bunch of piping and plumbing.
0:31:55 At the heart of it is this electrolyzer,
0:31:57 which is the thing we manufacture ourselves,
0:31:59 that does all the work and the rest of the equipment
0:32:04 around it, gathers the hydrogen, purifies it,
0:32:08 and puts it out in a pipe.
0:32:12 So we figured out how to make that really cheap,
0:32:13 half the cost.
0:32:19 – And the electrolyzer itself, like, what’s it look like?
0:32:20 How big is it?
0:32:22 – It looks about like,
0:32:25 it’s about the size of a refrigerator.
0:32:26 – Okay.
0:32:28 – An American refrigerator, not the little Europeans.
0:32:29 (laughing)
0:32:30 – Bad.
0:32:31 – Yeah.
0:32:35 And it looks, you know, it doesn’t look too,
0:32:37 it’s kind of a rectangular box.
0:32:41 It’s not very interesting to look at, frankly.
0:32:44 And when it’s running, it just sits there.
0:32:45 It doesn’t make any noise.
0:32:48 It doesn’t move, there’s no robots or anything.
0:32:50 There’s a bunch of water running through it.
0:32:51 There’s pumps, right?
0:32:52 Make a bunch of noise.
0:32:53 There’s water running through it,
0:32:56 and out comes water and gas,
0:32:58 watering oxygen in one pipe,
0:32:59 watering hydrogen in the other pipe.
0:33:02 And then there’s a bunch of vessels and pipes
0:33:04 that separate the gases from the water
0:33:08 and purify them and send them out to be used.
0:33:11 So it’s a very, you know,
0:33:14 if you’re a geek like me, it’s really impressive.
0:33:17 If you’re just walking by one and you see it,
0:33:19 you’d go, “Oh, what’s that?”
0:33:21 It’s kind of unimpressive.
0:33:23 Which is how you want one of these things to be.
0:33:24 – For sure.
0:33:27 – You don’t want any drama
0:33:29 when you’re converting power to hydrogen.
0:33:32 – Well, and especially with hydrogen, right?
0:33:34 Like, I mean, I don’t want to, you know,
0:33:35 talk about things blowing up,
0:33:37 but hydrogen can blow up, right?
0:33:40 – Actually, let me take a moment here.
0:33:41 – Yeah.
0:33:43 – Because there’s a lot of talk about that
0:33:46 in the U.S. or a new president-elect,
0:33:48 even made some comments about that.
0:33:51 Hydrogen’s no more explosive than gasoline vapor
0:33:53 or natural gas vapor.
0:33:55 So we already know how to handle things
0:33:58 that blow up when you spark it.
0:34:01 And hydrogen is kind of just like those things.
0:34:04 – Yeah, fair.
0:34:08 So how many of these acre-sized plants exist in the world?
0:34:13 – Well, we are building our first one now,
0:34:15 and it’ll be installed next year
0:34:20 in an undisclosed location in Texas for our customer firms.
0:34:22 So we’re super excited.
0:34:25 You know, in the life cycle of a startup,
0:34:28 this is an incredible moment
0:34:31 where we’ve gone from the laboratory
0:34:34 to kind of a pilot-scale operation,
0:34:38 and now we’re building the first real one.
0:34:41 And, you know, all eyes are on it,
0:34:45 and we’re just nose-down, executing and building it.
0:34:47 You know, once we get the first one
0:34:51 proven and running effectively, which will be next year,
0:34:56 then we expect to be super viable in the market
0:35:00 because our price point is so compelling.
0:35:05 – What are you gonna do with the hydrogen you make in Texas?
0:35:08 – So I can’t tell you because the deal isn’t announced yet.
0:35:11 But it’s exciting.
0:35:16 It’s a fuel that’s gonna be produced using the hydrogen.
0:35:19 – You can’t tell me specifically
0:35:21 what this first one’s gonna do, fine.
0:35:24 But, you know, we talked about this whole kind of range
0:35:27 of things one might do with hydrogen.
0:35:32 What are some of the sort of relatively easier applications?
0:35:35 Like, what’s the low-hanging fruit for green hydrogen?
0:35:36 What’s the first thing you can do?
0:35:37 What can you do tomorrow?
0:35:40 – Yeah, so if everybody in our industry
0:35:43 likes to think that ammonia, which is fertilizer,
0:35:46 is the first thing, it uses hydrogen today,
0:35:49 that hydrogen is made from natural gas usually.
0:35:51 So why not just replace that dirty hydrogen
0:35:53 with this clean stuff, right?
0:35:58 The reason ammonia isn’t happening super fast right now
0:36:02 is because there’s relatively little incentive
0:36:04 to decarbonize ammonia.
0:36:09 No one’s willing to pay extra for clean fertilizer
0:36:13 because food, food security, food cost
0:36:15 is super politically charged.
0:36:18 And obviously, that’s nowhere,
0:36:20 that’s not a place policy makers wanna go.
0:36:24 Potentially even in Europe, we’ll see.
0:36:28 So it turns out the low-hanging fruit might be economically
0:36:33 or politically one of the last things to be done.
0:36:37 – So now we gotta do political techno-economics,
0:36:39 political economy techno-economics,
0:36:42 gotta figure that one out, but yeah, okay, go on.
0:36:43 – Yeah, when you figure that out, tell me,
0:36:44 ’cause I need the way to describe it.
0:36:46 – It’s interesting, right?
0:36:48 Political economy is an underused phrase,
0:36:51 but we want to get political techno-economy,
0:36:53 political techno-economy, no, it’s not.
0:36:54 Okay, so what are you gonna do?
0:36:56 Not fertilizer, but what?
0:37:00 – Yeah, so I’ll rattle off the list of things
0:37:01 that are very active today.
0:37:06 Ironically, decarbonizing the hydrogen input
0:37:10 to refineries in Europe is very active.
0:37:13 – Refineries like oil refineries
0:37:16 that are making gasoline and whatever, yeah.
0:37:18 – That’s right, what am I talking about here?
0:37:21 So a significant part of the CO2 emissions
0:37:25 from a refinery itself are from the production of hydrogen,
0:37:28 which is used to refine oil.
0:37:29 – Uh-huh, uh-huh.
0:37:32 – So hydrogens used for desulfurization, hydrocracking,
0:37:36 it’s like, it’s a big input to oil refineries.
0:37:38 So there are incentives in place
0:37:43 to gradually decarbonize the refinery itself.
0:37:45 Of course, it doesn’t do much to decarbonize
0:37:49 the use of the fuel at the other end, but it’s a start.
0:37:51 – And it can help you scale, right?
0:37:55 Presumably, anything that can get you building is good now.
0:37:56 – You need a job in policy.
0:37:59 – God forbid.
0:38:03 But that’s exactly right, that’s the motivation.
0:38:05 It seems counterintuitive to try to decarbonize
0:38:10 a oil refinery, but because they consume hydrogen today,
0:38:14 it is an obvious place for policy makers
0:38:18 to incentivize the scale and up
0:38:20 of the green hydrogen industry.
0:38:23 So that’s exactly right, you nailed it.
0:38:26 Green steel, I already mentioned that one.
0:38:30 So there’s multiple active, big projects in the world,
0:38:34 for them in Europe to convert steel production
0:38:38 from coal, super dirty to green hydrogen, super clean.
0:38:44 Methanol, methanol is both the chemical input
0:38:49 to plastics as I mentioned, but also is the favorite fuel
0:38:52 for the decarbonization of shipping.
0:38:56 And so big shippers like Maersk,
0:38:57 probably Artivone, you’ve seen their name
0:39:01 on shipping containers, they are building
0:39:05 multi-fuel ships now, which can burn both conventional fuel,
0:39:07 which is super dirty, it’s called bunker fuel.
0:39:08 It’s like the sludge that comes out the bottom
0:39:13 of a refinery column, but also can burn methanol.
0:39:17 And so green methanol, e-methanol, some people call it,
0:39:19 which is made from green hydrogen,
0:39:23 is like a favorite pathway for decarbonization of shipping.
0:39:28 Those are the things that are, oh, another one is SAF,
0:39:30 Sustainable Aviation Fuel.
0:39:31 So what is that?
0:39:34 It’s kerosene, basically it’s chancey kerosene.
0:39:36 And what is kerosene?
0:39:40 It’s a hydrocarbon, it’s like gasoline, but heavier.
0:39:45 And so that can also be made from CO2,
0:39:47 biogenic CO2, and hydrogen.
0:39:50 Or it can be made, as is being done in Europe today,
0:39:55 from used cooking oil and other biological waste
0:39:59 and hydrogen in a specialized refinery.
0:40:05 – So what are you worried about right now?
0:40:08 Not about the world, but about your company.
0:40:10 Like you’re right at this moment,
0:40:12 you’re building first commercial plant,
0:40:14 you have a lot of investment.
0:40:16 Like what’s at the top of your list
0:40:17 of things to worry about?
0:40:22 – Yeah, so as I described,
0:40:25 like this moment for a technology company
0:40:30 going from lab and concept to actual product in the field
0:40:34 is probably the riskiest and most delicate moment
0:40:36 in a company’s life cycle.
0:40:37 Why is that?
0:40:39 Because to do what we’re doing
0:40:41 and to actually deploy commercially,
0:40:44 you have to be at a big enough scale to do that.
0:40:46 And that means you’re spending a lot of money.
0:40:50 And so if you don’t get it perfectly right,
0:40:53 the ramifications, like it can be painful.
0:40:56 So that’s kind of a generic answer.
0:41:01 The bigger worry for me is the stability of policy.
0:41:09 Not just in the US, but globally, around decardinization.
0:41:11 And why am I concerned about that?
0:41:13 Because we’ve seen it before.
0:41:16 We’ve seen it in, you mentioned the German feed-in tariff.
0:41:18 Right, the German feed-in tariff experience,
0:41:20 that’s what created the solar industry.
0:41:23 But then it also got retracted suddenly.
0:41:27 Why? Because of political change within Germany.
0:41:29 Wow, this is costing the taxpayers a lot.
0:41:33 And there was a move to the right in Germany.
0:41:38 And like, so the feed-in tariff was revoked, wound down.
0:41:44 And that was a near-death experience
0:41:46 for the solar industry.
0:41:49 The same thing can happen to us
0:41:53 because we are in the early days of this industry,
0:41:57 extremely policy-sensitive, policy-dependent.
0:42:02 Now, at Electric Hydrogen, our literal goal
0:42:05 is to be independent of policy.
0:42:08 Success for us looks like we are
0:42:12 economically competitive without any policy support.
0:42:14 You wanna be where solar power is now.
0:42:16 Like, nobody’s gonna stop solar now
0:42:17 ’cause it’s the cheapest.
0:42:20 Like, you don’t need any special rules, it’s just cheaper.
0:42:23 People just go to the store and buy solar panels
0:42:25 and get their electricity.
0:42:26 You got it.
0:42:27 And that’s what success looks like.
0:42:30 But we’re competing against an industry
0:42:33 that’s gone down its learning curve for the last 100 years.
0:42:35 And so to compete with that,
0:42:38 like economically, naturally, right out of the gate,
0:42:39 it’s too much to ask.
0:42:41 Meaning the fossil fuel industry.
0:42:43 Yeah, the fossil fuel industry, yeah.
0:42:44 So we need a little time.
0:42:46 How much time?
0:42:47 What’s your guess?
0:42:50 I think we can get there by 2030.
0:42:51 That’s certainly– That’s fast.
0:42:53 That’s certainly our team.
0:42:55 Yeah, it’s fast, but it’s a lifetime
0:42:58 in terms of political wins
0:43:00 and in terms of like a startup company,
0:43:04 you know, crossing the– Capital intensive, yeah.
0:43:06 Yeah, yeah, exactly.
0:43:07 Yeah. Exactly.
0:43:09 So that’s what worries me.
0:43:10 Yeah.
0:43:12 Well, you just gotta make it five years, man,
0:43:14 if you’re right, but five years a long time.
0:43:16 Especially right now.
0:43:17 It’s doubling my life.
0:43:18 It’s doubling my life.
0:43:24 Okay, so that’s what’s to worry about.
0:43:26 Give me the happy 2030 story.
0:43:29 If things, if you don’t,
0:43:32 if you make it to 2030 and it works out like you hope,
0:43:33 what’s it look like?
0:43:34 What’s the company look like
0:43:36 and what’s the world look like?
0:43:39 We’re selling tens of gigawatts a year
0:43:42 of electrolyzers, but more importantly,
0:43:44 we’re ramping up fast,
0:43:49 which means we’re ideally doubling capacity every year
0:43:53 to meet the demand for global projects
0:43:55 to produce green hydrogen.
0:44:00 The world looks like it’s ramping up
0:44:04 green hydrogen production at a rate
0:44:08 at which it will start to become relevant,
0:44:10 kind of relative to the fossil industry
0:44:13 in a matter of years or a decade.
0:44:17 Yeah, and tell me in five or 10 years,
0:44:21 like what are the places where there might be
0:44:24 sort of meaningfully significant use
0:44:27 of green hydrogen in industrial processes?
0:44:31 Yeah, so in five years, certainly in Southern Europe,
0:44:34 where solar and wind are plentiful and available,
0:44:38 North Africa, which is really well positioned
0:44:40 to supply Europe,
0:44:43 and has incredible solar and wind resource.
0:44:50 Texas and kind of, yeah, Texas, Louisiana, Oklahoma,
0:44:53 again, and the wind belt in the US
0:44:57 are like ideal places for the production of the molecules.
0:45:00 You look at places like Chile,
0:45:03 interesting because the Otacama Desert
0:45:05 has both wind and solar,
0:45:08 and the combination is extremely inexpensive.
0:45:12 And the Middle East,
0:45:15 I can’t not mention the Middle East.
0:45:16 That’s the supply side.
0:45:19 That’s where you’re making all this hydrogen.
0:45:21 And then what’s the demand side look like in five years?
0:45:23 Who’s buying it, and what are they doing with it?
0:45:24 Yeah, in five years,
0:45:29 the demand side is largely Europe, Japan, Korea.
0:45:32 Because that’s where the incentives are in place, basically?
0:45:37 It’s, that’s where the problem is hardest to solve.
0:45:38 They have the biggest problem.
0:45:40 And it’s not just incentives.
0:45:42 Like when I say the problem to solve.
0:45:45 They’re most reliant on imported fossil fuel.
0:45:46 You got it, you got it.
0:45:49 So it turns out to not just be a decarbonization problem,
0:45:52 it’s also an energy security problem.
0:45:53 But that’s good for you.
0:45:55 That’s good for you on the policy side,
0:45:59 because there’s more like short-term self-interest,
0:46:01 short-term localized self-interest
0:46:03 in figuring out how to make hydrogen work.
0:46:04 100%.
0:46:06 So those places make a lot of sense
0:46:09 in the five-year timeframe, in the 10-year timeframe.
0:46:11 Again, we come close,
0:46:13 even come close to meeting our goals,
0:46:17 and we’re gonna be knocking on the door of parity in cost
0:46:19 with fossil resources.
0:46:21 And so I think the market is truly global.
0:46:25 And just list off some of the things, not the places,
0:46:28 but some of the things that people will be using
0:46:33 your hydrogen for, clean hydrogen for, in five or 10 years.
0:46:34 Oh, yeah, easy.
0:46:39 So steel, cement, ammonia, fertilizer, shipping fuel,
0:46:46 aviation fuel, chemicals like methanol,
0:46:48 those are the easy ones.
0:46:49 And all of those industries,
0:46:51 I mean, those industries together
0:46:55 make up a very large chunk of carbon emissions.
0:46:59 – Yeah, the ones I rattled off, probably 30 to 40%.
0:47:02 – Yeah, and it’s the 30 to 40%
0:47:05 that seems really hard right now, right?
0:47:07 It’s not the like, oh, great solar power
0:47:10 and batteries for people’s houses and cars.
0:47:12 Like that part, we’ve actually kind of got, which is good.
0:47:14 And so you’re doing the hard part.
0:47:15 – Yep, that’s it.
0:47:22 – We’ll be back in a minute with the lightning round.
0:47:25 (upbeat music)
0:47:35 – Let’s finish with lightning round.
0:47:37 What’s your second favorite element?
0:47:41 – Ooh, my second favorite element.
0:47:44 That’s a great question.
0:47:44 I’d say carbon.
0:47:50 – Interesting, just as a human, as an organism or why?
0:47:51 Why carbon?
0:47:56 – Well, it came to mind because hydrocarbons are awesome.
0:47:58 We just need to make them clean.
0:47:59 – Yeah.
0:48:03 What do you think is the most underrated power tool
0:48:05 for home use?
0:48:09 – Yeah, so I have a battery-powered Makita angle grinder
0:48:12 that I use all the time.
0:48:14 And it’s arguably one of my favorite tools.
0:48:16 Yeah, last time I used it,
0:48:20 I used it to cut off a hard to reach metal bolt.
0:48:21 – Oh, I love that, okay.
0:48:22 Or there’s sparks?
0:48:23 Sounds like sparks.
0:48:24 – Yeah, it makes lots of sparks.
0:48:25 – That’s good.
0:48:28 – It’s one of the reasons it’s one of my favorite tools.
0:48:29 – ‘Cause it looks cool.
0:48:31 What’s your favorite song right now
0:48:33 to listen to very loud?
0:48:36 – Who?
0:48:39 Led Zeppelin, Brony or Stodd.
0:48:41 – Great.
0:48:42 – Just makes me happy.
0:48:45 Every time I listen to it, it just makes me happy.
0:48:46 – Make you feel 20?
0:48:49 I think if I put that song on, it would make me feel 20.
0:48:52 Or at least make me remember feeling 20.
0:48:54 – And feeling 20 makes me happy.
0:48:56 – Yeah, that’s nice.
0:48:58 Probably, it would probably make me happier
0:49:00 than I actually felt when I was 20, which is–
0:49:02 – Yeah, I think that’s true as well.
0:49:04 – Yeah, it’s definitely–
0:49:07 – Last one, I read in the Wall Street Journal
0:49:10 that your co-founder keeps, quote,
0:49:14 a secret document of the company’s failures and fixes
0:49:17 that only top engineers can access.
0:49:19 And that you cannot access.
0:49:22 Did you know about this?
0:49:24 Did you learn about it by reading the Wall Street Journal?
0:49:29 – I don’t know if that was a misquote or not,
0:49:32 but yeah, it’s actually not true.
0:49:34 But it was a nice piece of story.
0:49:35 – Are you sure?
0:49:35 Are you sure?
0:49:37 Or are they just telling you that at the company?
0:49:40 Maybe they’re like, no, no, the Journal got that wrong.
0:49:42 There’s no secret document.
0:49:45 – With my co-founder, Dave, you never actually know.
0:49:48 – Okay, keeps it interesting.
0:49:53 Anything else we should talk about?
0:49:54 – It’s been great.
0:49:55 – Yeah, I really enjoyed it.
0:49:57 – Super fun.
0:49:59 (upbeat music)
0:50:06 – Rafi Garabedian is the co-founder and CEO
0:50:07 of Electric Hydrogen.
0:50:11 Today’s show was produced by Gabriel Hunter Chang.
0:50:13 It was edited by Lydia Jean Kott
0:50:16 and engineered by Sarah Brugier.
0:50:20 You can email us at problem@pushkin.fm.
0:50:22 I’m Jacob Goldstein and we’ll be back next week
0:50:24 with another episode of What’s Your Problem.
0:50:26 (upbeat music)
0:50:29 (upbeat music)
0:50:33 (upbeat music)
0:50:43 [BLANK_AUDIO]
Solar power and batteries are becoming cheap and ubiquitous. Great. But there are problems batteries can’t solve – like fueling ships and planes. One way to solve those problems: Use solar power to create hydrogen, and turn that hydrogen into fuel.
Today’s guest is Raffi Garabedian, the co-founder and CEO of Electric Hydrogen. Raffi’s problem is this: How do you turn solar and wind energy into clean hydrogen that’s cheap enough to compete with fossil fuel?
This is the last of three episodes we’re doing about the solar-power revolution. Listen to the previous episodes on your podcast player or at our website: https://www.pushkin.fm/podcasts/whats-your-problem
See omnystudio.com/listener for privacy information.