Music you’re listening to A Climate Change, this is Matt Matern, your host, and I have Andy Marsh, CEO of Plug Power, on the program today. I’m really excited to have Andy on the program. Andy’s CEO of a publicly traded company that is a $12 billion valuation currently by the market, and it’s a leader in the hydrogen space. And Andy, I’m glad to have you on the show.

Great to be here. Thanks for having me, Matt.

Well, tell us a little bit, Andy, about your journey to getting to Plug Power, and what led you to that position?

Oh, wow. Now I started out at Bell Laboratories, and maybe your listeners who were over 50 years old and that remember what Bell Laboratories was. It was the premier R D research arm of the Bell System, renowned for figuring out how old the universe was lasers, the first transistors. And I was fortunate enough to work for Bell Laboratories for 18 years, and my primary focus was the development of power systems.

And if you think about fuel cells, for example, power systems are quite a good fuel to get us started, to move you into fuel cell space. Then Matt, I went and started a company with two buddies and company that powers most of broadband, about 30% of broadband in the US, for outdoor applications, the building I’m sitting in probably powered by a familiar power piece of equipment.

It’s still the premier technology. It was a company I started with a couple friends. We grow to $100 million in about a six year period. We sold it, and then I was looking for my next opportunity in life, and I’ve rolled into plug about 15 years ago, and that’s how I’m here.

That’s a great story. So tell the listeners a little bit about what Plug Power does. My understanding is that you started or one of the major focuses was power for forklifts and energy systems, instead of kind of the old batteries that forklifts used to run around with, which I understand would probably be similar to a car battery. Your Plug Power developed hydrogen cells to run those motors. Is that correct?

Yeah, that is correct. I think the journey is even further than that. Matt plug is actually 25 years old, and as I mentioned, I’ve been here for 15 years, and when I joined, it was a pure research company. You know, we had research and work going on in four different fuel cell technologies. We had lots of government projects, and my responsibility was, and why I was hired was to transform this company into a commercially viable business.

And, you know, we ended up focusing on fuel cells, putting them into forklift trucks, and then that led us to other pass. But the advantages were and I think this is really interesting, because when you talk about advantages for on road vehicles, for fuel cells, they’re actually very similar. Why do Walmart and Walmart today has over 10,000 of our units. Why did they choose this product because they could fuel them fast comparative battery.

They would run one and a half times longer. They could eliminate all the complexity of the battery. But as we were dealing with Walmart, what we found was, when I read the SpaceX story, in some ways, it’s much more, it’s very, very comparable, what we found was there really wasn’t folks who could build hydrogen fueling stations at scale. So we learned how to build hydrogen fueling stations, and as time has grown on, we’ve reached the point where, you know, we’re building hydrogen generation systems across the country now.

We’re looking to have 70 tons available by the end of the year, of green hydrogen produced by blood. We became this really incredibly vertical, integrated company today, you know, we have over 60,000 fuel cells running around in places like Amazon and Walmart. Today, we’ve built over 180 fueling stations. Today, we have joint ventures for on road vehicles, for late commercial vehicles, with Renault and France. You know, we have a plan to build out 500 tons of green hydrogen here in the United States by 2025.

We have a JV with SK in South Korea, the third largest Korean conglomerate that build large scale stationary products. The company has gone quite long distance, and you know, talking about the fuel cells and forklift truck business, but just since the sexiest business of the world, but during COVID in March of 2020, about 25% of food in the. West touched one of our products. So, you know, it’s so that really is the plug story and how we got to where we are.

Well, I think that starting small and finding a niche that is a viable niche, and then expanding and growing is is a good business model. And I would, I would say, you know, I was exposed to hydrogen fuel cell technology back because my dad’s degree was in chemistry, and so he was a chemist, and so he had all these chemistry journals, and he talked about fuel cells back 40 years ago as being kind of the wave of the future.

And I was kind of just waiting and waiting for this ever, you know, play out into real time. And then I got my first fuel cell car about four years ago, the Toyota Mirai, and then I got my second one about a year ago. So I’m a believer in that, in the technology. Just a little warning there for the listeners, we have

something in common. My dad worked on fuel cells too, for General Electric and NASA. So I was exposed to fuel cells at a very young age. I wasn’t really paying that much attention of what my dad was doing, but I knew he worked on it and the osmosis, I learned a lot about the technology.

Yeah, well, it’s like we’ve been talking it’s been around for a long time, but I think one of the great things about putting adapting it to real life purposes is you start to see, okay, here are the little pieces that you have to create in order to build out the infrastructure to make it work on a grander scale. And it’s great to see what your company is doing on that front one of the big problems that we have with wind and solar is that a lot of times we have wind and solar power being generated, but nowhere to really send it to and that if we have the ability to use these electrolyzers to take that energy, turn it into green hydrogen, then we can use that green hydrogen at a later point, which would basically be a good energy storage mechanism.

And my understanding is we’re building a huge storage facility in Utah that I believe is government funded, and that could store a lot of hydrogen there for all the wind and solar that’s being generated in the West, you were talking about Denmark, and I was just in Copenhagen this summer, and they were talking about how during the winter, they are generating over 100% of their energy through offshore wind. So they, I guess they’re probably that’s going to go up higher, and therefore they’re going to need this energy storage capacity, and that’s where your green hydrogen will come in, right?

You know, Matt, couple points. The first one is in Denmark. What they actually are thinking about is how to become a net, net exporter of energy in New York. And so you’re absolutely right. They probably have sufficient wind power to meet their needs today, but they’re actually thinking about building more and more wind because it’s a one of their differential advantages. If you know that, they see that they can be generating energy, creating hydrogen and the supplying that energy to Central Europe and be a replacement for Russian natural gas here in the States.

I you know, I really found your comments here really interesting, because if you take a look where you are in California, some of the best work that’s been done has been done at UC urban by Dr Jack Brower, and some of that work talks about how you manage wind and solar on the California grid. When the California grid becomes 100% renewable and storing hydrogen in caverns is not new. Natural gas is stored in caverns today also, but you could change those caverns in California to be storing hydrogen, and as you mentioned, using electrolyzers to create green hydrogen when the sun’s shining a lot and the wind’s blowing a lot, and storing that for a rainy day.

And when that rainy day occurs, one can think about hydrogen fuel cell plants replacing today’s present peaker plants, and be able to generate electricity right onto the grid to support California during the long seasonal times where the wind solars, you know, the uptime is not sufficient for their needs. You’re saying the same sort of work going on around the world with SK by 2024, 2025 we’ll actually have 400 megawatts of power plants to support the South Korean grid. So, yeah,

I had Professor Jack Brouwer on the program a while back. Great guy. And yeah, hydrogen guru, we have about four. More projects going on with Jack, because a great research facility and great leader in this industry.

Yeah, I’ve also had Mayor Rex Paris, who’s a big hydrogen believer, Mayor of Lancaster, California, who has has invested a lot in hydrogen technology. I don’t know if your firm has worked at all with Mayor Paris, I have it, but we are building a green hydro. It’s an under environmental permitting now in mandota, California, to generate 30 tons.

And I think we’re looking to grow at the 45 tons per day green hydrogen. You know, for your listeners, that’s probably equivalent to, like, 90,000 gallons of gasoline per day, but that actually will be using solar power, where we’ll be using our electrolyzers to create green hydrogen. What’s really interesting, we’re actually going to be using wastewater and cleaning it up in the community to be used in the electrolyzers then circulated back so part of that water will be able, you know, provide the needs for water for the local community.

You know, it’s had pure circular loop we’re looking at. And as you know, Matt, your state is really one of the leaders. It’s not the leader in the world in hydrogen fuel cells. As one of the reasons we’re building a hydrogen plant in California, some say hydrogen can never compete with electric battery technologies. What do you say to this? Elon Musk’s comment, the full cell is that just trash talk from a competitor?

I would say this. I am not a purist. I think anyone who thinks that there’s one solution to our energy crisis and to our climate crisis is fooling people. You know, there’s a great report about the five scenarios that get us to net zero by 2050 that was done at Princeton. And you know, when you read those studies, batteries don’t solve it all.

So there are areas where hydrogen, for example, there are batteries aren’t really helpful at all. And it comes to things like, you need hydrogen for fertilizer, manufacturing for high heat, to make green steel for green concrete. Batteries solve none of those problems. Batteries don’t really work for heavy duty vehicles. You get to a point, and this is work that real work, real life work done by DHL, you know, for like their panel trucks, and when they show that anything that goes over 100 kilometers, that fuel cells have a distinct advantage because of their lighter weight and 150 kilometers, batteries are just too heavy, and they they fill their whole cargo up with batteries and not packages, which is their business.

And so I think when you talk to customers like Amazon, Walmart, DHL, batteries are really not meant for light, commercial and heavy, especially heavy duty, vehicles that have to go any range.

Well, that’s a fascinating topic as to how and when we’re going to roll out hydrogen technology for trucks and heavy vehicles. Is the US government making the playing field level so that hydrogen has a chance to compete against, say, electric battery powered vehicles, because from what I see, the government is kind of putting the finger on the scale in favor of electric, and has been for the last few years just starting to kind of give some help to hydrogen.

Doesn’t look like it’s quite as much. How do you compete when the when the government is giving a little bit more to electric technology versus hydrogen?

Well, Matt, I actually think you’re wrong there. Okay, hydrogen actually was one of the real big winners in the inflation Reduction Act. You know, there are three aspects of that act which is really beneficial to hydrogen fuel cells. One is this production tax credit of $3 a kilogram for green hydrogen. It actually makes green hydrogen. And this is work that was based on work by Bernstein, probably the lowest cost gasses, liquid energy carrier in the world. It also is positioned the US, from a technology point of view, to drive customers like companies like blog that really invest in the development of electrolyzers.

And we’re even given a great deal of thought how you can export globally hydrogen generating the United States. So it really, you know that credit should not be understated. There’s also Greg, who we talked a little about storage. There’s actually some great enhancements to storage credits, which are part of the bill. And third, the fuel cell investment tax credit for 10 years, which provides you. There’s a 30% tax credit for fuel cells. Is really beneficial.

And top that off with the extension for solar wind, which makes the electrical cost for solar and wind provide a steady footprint. I mean, I’ve seen numbers out there at 1.5 cents kilowatt hour for solar hosts. This bill that generates, helps generate really low cost green hydrogen.

I personally think the work done by people like Senator Schumer, Senator Manchin, the White House in the inflation Reduction Act is really give hydrogen a real push. And then when you look at the infrastructure bill, Matt, there was a billion dollars for building hydrogen hubs, and another billion dollars associated with electrolyzer R&D. So I’m also the chairman of fuel cell and hydrogen Energy Association, and we’re actually thrilled by what the government did to really help accelerate this industry.

I guess I’m thinking more retrospectively than this. Last six months, definitely things have kicked into gear for hydrogen. But I’d ask you to tell the audience a little bit more about hydrogen hubs and why these are important, and what do they mean.

I think there will be in the United States probably a build out of four to six large hydrogen pumps, which will be a place that where hydrogen will be generated, there’ll be a place where hydrogen will be distributed, which will be make it easier for fuel cells to be leveraged. There’ll be four these hubs in the United States, which will become kind of the building blocks for building out the hydrogen economy.

You know, if I was a betting man, I would think there’s going to be one in California, probably one in Texas, probably one in West Virginia and probably one in the Northeast. And I think all those will be hubs which will be demonstrating a multitude of ways to generate hydrogen, both green hydrogen, blue hydrogen, as well as being the baseline for really accelerating the deployments of fuel cell vehicles and usage of hydrogen for a variety of applications.

So in terms of renewables and generation of wind and solar energy. Am I going a little bit too far and thinking at some point in time, in the not so distant future, we’re going to be generating so much renewable power that we can make green hydrogen at scale to to power? You know, all the vehicles that we need in our economy. How far out is that day?

I think that day sooner than you think, Matt, I think there’s work going on with by plug that generate green hydrogen nationwide. There’s people like NextEra, there’s all sorts of folks working and looking to build out. You mentioned the large project with the Mitsubishi with storage and using electrical generation with present day gas turbines, with the hydrogen.

So that day is probably much sooner than you think. And you know, I don’t worry too much about the capabilities of how you go build out to facilities to build electrolyzers. I think probably the biggest challenge is how fast the solar and wind roll out is in the United States. And I think that when you look at the numbers, it doesn’t really scare you.

I think the biggest year for solar and wind was 2020, or 2019, and I think you look back at those numbers and how much more we have to start producing each year, it’s not a number that, as an engineer, I’m not floored by the increase it’s required for us to do that. So it’s, you know, it’s going to be a journey between now and 2030 which will accelerate rapidly, and then even faster, between 2030 to 2050 to get the net zero to where we’re at, a point where, you know, people like Bloomberg and McKinsey talk about 20% of world energy coming from hydrogen, whether it’s 15% or 25% I think the build out will be pretty rapid as we go towards these net zero goals.

And look, you see what’s you see what’s going on in Florida today, that the horrific storm, obviously, you can’t say that was climate change, but certainly has had an impact with making the ocean warmer, making these storms more dangerous.

Yeah, it’s it’s certainly a scary situation, and we need to do something, and we need to do something fast, because we only have one planet, and if we screw it up, there’s no going back. Andy, I’d like to shift gears a little bit and talk about the missions and goals of Plug Power, say, for three years, five years, ten years. Where do you see the company going?

I mean, obviously some of it’s kind of unknown. Mobile, because technology is changing, you’re acquiring different companies, but kind of just general directional trends where you see company going.

So Matt, we’ve been really clear that by 2025 we’re going to be able to achieve $3 billion in revenue, and that’ll be profitable revenue, but how we get there really has a lot to do with some of the basic work we’re doing today. One is that, as we talked about we’re building out this green hydrogen network across the United States. We’re beginning to build our own hydrogen generation plants in Europe, for example, port of ANS for having low cost green hydrogen available will be a great accelerator for our fuel cell market, and we have some exciting projects products going on there.

One is the continual refinement and improvements in our material handling business, where we envision 25% of forklift trucks by 2030 could ultimately be ran on fuel cells. We think a great deal about stationary products. With Microsoft, we’ve done some leading edge work developing fuel cell products that could be integrated with data centers. And every major data center company in the world has been engaged with us on this product development activity.

Can I stop you right there for a second on the data center front? Because we know that data centers consume an enormous amount of power, and I assume it’s just going up exponentially every year. Tell us a little bit about why this is a good product for data centers.

Well, first, Matt is that let’s talk about Microsoft. Who’s been the most public about it. And Microsoft today uses, you know, about 30 megawatts of diesel generators at their site. And you know you can, because you have to make sure they work. They run probably only hour a day normally. But as you have long blackouts in California, you know they have to back up these 30 megawatt data centers.

And when you think about you know their goals to be clean, that fuel cells and hydrogen are really the only solution for them to meet their net zero goals. It also, you know, when we look over time, over the next five years, you can see that that technology can be cost competitive with diesel technology on top of that. Matt, you know, we talked a little bit about how you support the grid.

They can use them as peaker plants, so that when the electricity bill is electricity coming as high, they can use their own internal generated hydrogen fuel cells to power the data centers and not have to pay peak charges. Top of that, they can actually use it and leverage it to put electricity back on the grid. That’s why people like Microsoft were so excited. And for your listeners, if you Google Plug Power Microsoft, you’ll see some really incredible descriptions of what Microsoft and Plug Power are looking to do together. So that’s a real growth opportunity.

So would these data centers then become like little power plants that contribute to the grid during peak hours and contribute more green energy to the grid.

Absolutely, think about them as micro cells. It is really cool. Yeah.

I mean, we’ve talked about micro grids on the program a number of times with lots of different guests and different pieces of this economy. And it seems as though it is the future to have, you know, many different nodes of power versus one major utility provider.

Yeah, next year, I met this week with the team you know, to have 60 megawatts of that deployed next year. Doesn’t sound like a big number, but it’s a big start from zero, and it’s been some of the more interesting work we’ve done, and we talked about the electrolyzer business. Matt, the electrolyzer business is not a demand issue. It’s actually a supply issue.

We could sell everything we got in the electrolyzer business because the demand for green hydrogen to replace other fuels and other chemicals. You can’t really put a number around it, but think about ammonia manufacturing, which has become really critical during this terrible war in Ukraine, and we’re already working with the green ammonium manufacturers to generate green ammonia and get rid of the usage of natural gas.

Let me ask you, should the market be responding to that and investing 10s of billions of dollars in additional funds in that technology so we build out more electrolyzers? Or is that government’s role? Or where should we be on that front?

So I think the. US. Government’s actually done the work, and it’s up to companies like plug, develop our products and sell our wares, and there is customer pull the US. I have no complaints about the government support. I think in Europe there’s a great commitment, and there is certainly a lot of activity going on in Europe, in both green ammonia, injecting of hydrogen into natural gas pipelines in the US is kind of easier because it’s less dependent upon government programs. You know, it’s much more market based, but I think a lot of it resides with people like me and all the people that work for me about how to make this happen.

Well, I’m going to ask you, in terms of hydrogen technology in cars, Toyota is invested heavily in it, and they’re doing it. You’d say Renault is involved in it. Where are they in that process?

Sorry, Matt, I know you’re own two cars here. I think cars are probably more like a 2035 just because of the availability of things like fueling stations. I know California has done a good job, but the value proposition is strongest for commercial vehicles, where the advantages of fast charging, the advantages of longer range, the advantages of weight, are just so overwhelming that the value proposition is so far superior to batteries.

You know, it kind of comes down to the fact that you can keep the vehicle on the road all the time if you’re using fuel cells, without having to worry about charging. You can put more goods on board with fuel cells than you can with batteries, because they’re lighter weight and they can go twice as long as batteries.

In the value proposition, if you’re running a commercial enterprise, that’s where you’re going to see fuel cells dominate eventually, I think when you get to around 2035, now, there’s a lot of people who know in California, I think only about 15% of people I’ve seen data, could actually charge cars at their home. And I think that’s a real limit. And I think that some of these advantages of fuel cells, where fueling looks a lot more like what you do at gasoline stations today, has a lot of advantages.

Well, in terms of trucks, and you’re talking about larger vehicles. Where are we as far as getting that technology in trucks? Because obviously, we have 10s of millions of trucks on the road, we’ve got to manufacture a lot of fuel cells to kind of make a dent in those emissions, right?

So a lot of good work going on, and there aren’t a lot of companies working on heavy duty vehicles. And I think there’s a lot more advantages of missions. I can tell you, when we look at it, there is a lot of customer places like Walmart and Amazon to move everything from class six to eight vehicles to fuel cells so that they can meet their net zero goals.

I think you’ll probably see more rollouts in the next three, four years. In Europe, we expect to have about 100,000 light commercial vehicles on the road for like Amazon Prime products that look like that, to be delivering packages. So I think between now and 2030 in the commercial vehicle market, you’re going to see a lot of activity.

Well, Andy, great having you on the program. Andy Marsh, CEO of Plug Power, you’ve been listening to A Climate Change. this is Matt Matern, and Andy, thank you again. Love to have you on the program to talk more about this exciting technology you.