Making shipping fuel with off-grid renewables

In this episode, Anthony Wang, co-founder of ETFuels, describes
his company’s business model of using renewable energy to make
green hydrogen, then using the hydrogen to make carbon-neutral
methanol.


(PDF
transcript)


(Active
transcript)


Text transcript:


David Roberts


Anthony Wang, a mechanical engineer by training, spent years as a
researcher on hydrogen technologies. He worked with governments
to develop policy and infrastructure plans — he was project
manager on the EU's big hydrogen backbone project — and with
private companies like Total and Shell to develop hydrogen
technology roadmaps. He has authored or co-authored several
industry-defining reports on hydrogen and been cited in countless
publications.


A few years ago, he decided to throw his hat in the ring and try
to actually build hydrogen projects in the real world. All his
research and contacts in the energy world led him to a very
specific — and, to me, extremely intriguing — business model.


ETFuels, the company he co-founded, develops projects that couple
giant off-grid renewable energy installations with hydrogen
electrolyzers; it then uses the resulting green hydrogen to
synthesize carbon-neutral liquid fuels. (First up is methanol for
shipping, but the company plans to branch out into other
e-fuels.)


This model somehow manages to implicate half the stuff I’m
interested in these days — green hydrogen, markets for hydrogen
fuels, off-grid renewables, coupling renewables directly with
industrial loads — so I was eager to talk with Wang about it. We
dug into the limits of “electrify everything,” the difficulty of
transporting hydrogen, and the economics of e-fuels, among other
things.


This one gets fairly deep in the weeds, but if you find the
real-world challenges of developing clean-energy projects
interesting, you don’t want to miss it.


All right, then, with no further ado, Anthony Wang. Welcome to
Volts. Thanks so much for coming.


Anthony Wang


Thank you so much for having me, David.


David Roberts


So you were sort of recommended to me as somebody who knows a lot
about hydrogen, about sort of green hydrogen, the markets. I know
you've worked with public on policy roadmaps. I know you've
worked with private companies on technology roadmaps. So I know
you've given a lot of thought and sort of analysis to the green
hydrogen phenomenon, the green hydrogen market. And you settled
when you decided to start a company of your own, you co-founded
this company, ETFuels. You settled on a very particular business
model, which I just find sort of fascinating as it sort of
implicates half the things I'm interested in these days in the
energy world.


So I wanted to just run through it with you and talk about why
you made the choices you did and get into some of the bigger
issues that way. So just for listeners' benefit, the idea here is
you find a big piece of land somewhere out in the middle of
nowhere. You build a bunch of renewable energy, mostly solar,
maybe some wind. Instead of hooking the renewable energy up to a
grid, you pipe it directly into electrolyzers and make green
hydrogen out of it. And then instead of exporting the green
hydrogen or selling the green hydrogen, you use the green
hydrogen, combine it with CO2 to make methanol, basically,
carbon-neutral methanol, which you are then going to sell to
shipping companies. So that's a big puzzle. That's a big puzzle
with lots of pieces put together. So I want to kind of start at
the front end of it. My intuitive reaction to this is you're
taking valuable renewable energy and then you're converting it to
hydrogen, you lose a lot in that conversion, and then you convert
it again to methanol and you lose a lot in that conversion as
well. It sounds sort of inefficient.


So the question comes up like, why not just sell the renewable
energy? So why off-grid in the first place?


Anthony Wang


For us, obviously, it depends where you're talking in the world,
right? So renewable energy, if you can get it connected to the
grid, you're completely right, it's extremely valuable. I mean,
you've seen what prices of power have done in the last couple of
years in Europe and in the US. And if you can use it to electrify
your vehicles or heat up a heat pump, that's a very good use of
that renewable energy. That said, there are many places in the
world where solar and wind, on a levelized cost of production
basis, are the lowest cost sources of energy we have.


And on top of that, most of these locations are not connected to
grids. And so one question that always puzzled me a bit was
everyone's talking about renewable energy getting cheaper and
cheaper and being the lowest cost source there is. So why, why
aren't we seeing that being reflected at all in, in the prices
that we see a) on the wholesale market, and b) ultimately on our
bills at the end of the month? And thought a lot about this, and
I'm not an economist, but it does seem to me that while we've got
very good at producing renewable energy in a very cheap way, I'd
argue it's the cheapest that we've got.


We seem to have made a lot less progress in transporting, storing
and balancing that renewable energy in a way that meets the
consumer when they need it, where they need it. We know also that
the energy transition is going to put this massive strain on
power grids. Today we transport about 20% of our final energy
through the grid. And in a fully decarbonized system, I mean,
depending who you talk to, that number should be going up to 60,
70, 80%. We should electrify as much as we can. But that also
means that we need about three, four, five times the number of
cables, transformers and substations.


And right now the grid does not seem to be set up to deliver
that. And so we wanted to marry that problem in a way with an
opportunity that we saw in producing hydrogen. And obviously,
when you lose 30% through energy, conversion losses. That's a
huge deal if your power is super valuable. It's a lot less of a
big deal when your power is virtually free, depending on where
you are.


David Roberts


So sort of to summarize that renewable energy itself at the point
of production is super cheap, but all these balance of system
costs, mainly transmission and distribution, end up boosting the
cost anyway. So your idea is just to use the cheap renewable
energy and avoid all those other costs. Basically just use the
cheap energy directly and not have to pay those additional costs?


Anthony Wang


Yeah, exactly. And cost is quite a simple way of capturing it.
But there's lots of other things right in projects it's also
time. The biggest risk in developing renewable projects is often
getting the grid connection permit. I think, not to bash too much
on the grids, I've got lots of good friends there, but the
numbers speak for this. So if you look at the US, I think the
Berkeley National Lab found there's a two gigawatt backlog or
2000 gigawatts, sorry, of PV, wind and storage.


David Roberts


Yeah. Terawatts.


Anthony Wang


Terawatts, exactly. Which is like almost double of the installed
capacity base today. And you see similar numbers in Europe. And
the cost of interconnection, the deposits that developers are
asked to put down are twice what they used to be. They can be
almost as big as your CapEx of your solar project. So it's lots
of things that have come together that are just making it very
difficult to connect the phenomenal amounts of renewables that
are available to the demand where it is.


David Roberts


So, I'm curious how you see this playing out. Because the
enthusiasm is for electrifying everything and as you say, that's
going to mean like four or five times our grid capacity and
nowhere that I know of is a shining example of how to build grid
capacity that much, that fast. I don't know that anyone's doing
it. So, do you think that is going to be a serious constraint at
the macro level on electrifying everything? Do you think that's
going to push a lot of activities to this sort of off-grid model?


Anthony Wang


We hope so. At ETFuels we're definitely pushing it. Look, I've
got nothing against the electrify narrative. I think it makes
total sense and where we can, we should. But the reality is that
it's incredibly difficult. I mean, we're finding this ourselves.
We're trying to develop projects which are in the middle of
nowhere. And even there, permitting and consent can be a
challenge. So, imagine building a transport cable that crosses
the entire country. These transmission highways in Europe, we're
talking about the European super grid. Governments are trying to
kind of coordinate about who gets what space in the North Sea.


We're talking about kind of hydrogen backbones that should cover
the entire continent. And you can just see the political and
practical implementation challenge of doing projects like that I
think. I was working closely on a hydrogen pipeline project
between Spain and France, these countries putting a pipe through
the Pyrenees. I think now they've landed on kind of putting it
through the Mediterranean Sea and said, you see presidents
shaking hands about which pipelines should happen and then it
still takes eight, ten, twelve years before they're actually
implemented. So, I think it's a question of let's do everything
as much as we can and whichever one gets to market first, you
should have some merit to that.


David Roberts


Regular listeners will know that. I'm sort of fascinated by this
question. We had John O'Donnell from Rondo, the heat battery
company on and that's sort of his thesis of his company is kind
of the same logic. The grid constraints are going to push a lot
of renewables off-grid. Basically, they're going to be coupled
directly with industrial applications and just skip all the grid
stuff, which I find a fascinating trend. That's one of the
reasons your kind of business model caught my eye. So then you're
generating all this variable renewable energy which notoriously
comes and goes, waxes and wanes, sort of out of your control and
you're using it to make green hydrogen.


So part of the conventional wisdom that I always hear is that's a
bad match because electrolyzers need to be run a lot of the time
to pay off. Basically to be worth the investment, they need
what's called a high capacity factor. And if they're sort of tied
to variable renewables, how do you think about that problem? Have
you thought about putting anything in between them? This is the
heat battery question again. Have you thought about putting
anything in between them to smooth the supply of the energy to
the electrolyzers? Or is a lower capacity factor just a cost you
think is worth bearing?


Anthony Wang


Yeah, a really good question. Obviously when we started the
business that was probably the first question that we looked into
because obviously we're only doing this because we think that we
have a commercially viable proposition and we can provide
hydrogen at lower cost than what is currently available on the
market. And fundamentally when you look at this equation, you're
kind of balancing three variables, right? You've got on the one
hand, your cost of power. Secondly, you've got the number of
hours that you're able to run your kit on that power, which
obviously is lower with renewables.


And then the third is just the cost of the kit itself. So let's
say the CapEx of the electrolyzer and the cost of balancing the
power. And when we look at modeling this out across the year,
there are places in Europe, in the world where your renewable
energy wouldn't be producing often enough for this to be worth
it, right? So if you only have a solar production model in the
north of Europe, then it's probably not going to work. You can't
run your electrolyzer for 1000 hours a year and hope it to make
money but there are also places where it definitely can work.


And you're seeing lots of projects these days which actually
combine solar and wind together in these types of hybrid
configurations. And that's useful, one because they're not
entirely I mean, so wind is a bit more expensive, but it runs a
bit more often. But then on top of that, depending on where you
are and there are special deserts where this is particularly the
case where the wind and solar production hours actually very
anticorrelate very well, where you essentially have solar during
the day and then wind which mainly blows at night, not
exclusively, but mainly at night. And when you combine those two,
you can get very, very steady profiles up to 5500 hours a year of
essentially base load production.


And when you spread that across an electrolyzer, and especially
obviously today electrolyzers are still quite expensive, but
going forward their cost will come down. You'll see that the
numbers actually pan out very well. And when we've done the math,
we come to conclusions where depending on the power that you're
using but if you're comparing a hybrid solar wind project in,
let's say, the deserts of Chile or in the Middle East or in
Western Australia, you can easily get to production costs of
hydrogen that are 40% lower than if you were using grid connected
power, paying essentially wholesale prices in Northern Europe. So
that's on the economic side.


Then there's of course the question around can the electrolyzer
even run flexibly?


David Roberts


Right.


Anthony Wang


And this is a bit more of a technical question. Obviously, you've
got different technologies. You've got PEM, so the Proton
Exchange Membrane electrolysis, and you've got alkaline ones. PEM
is more flexible. But even the latest kind of pressurized
alkaline models are able to run flexibly depending on their ramp
rate. The specific model, you may need to add a small battery in
between. But in principle you don't need to run, especially if
you got 6000 full load hours from your renewables. You're mainly
looking at balancing on the kind of second to minute level and
the technologies that are on the market today can handle that.


So you don't need any additional storage. It's more of just a
pure economic thing. If your power price is low enough and your
hours are good enough, then you can make it work.


David Roberts


Right. So two things: You go to places where a hybrid renewable
system can actually reach relatively steady production and then
you go to places where the power is super, super cheap. So what
about electrolyzers then? Let's talk about electrolyzers because
you're saying you're going to produce green hydrogen that's
cheaper than what's on the market. Is that purely because the
power you're making it with is going to be cheaper? Or is there
something about your electrolyzers that is special?


Anthony Wang


Yeah, and just to clarify, so when we say our green hydrogen is
cheaper, I'm comparing to other green hydrogen projects, not the
fossil hydrogen projects that are of course hydrogen that's on
the market.


David Roberts


Brown or —


Anthony Wang


Yeah, exactly.


David Roberts


gray or whatever the hell.


Anthony Wang


So, that stuff's definitely cheaper at the moment. So for us, the
innovation is not in the electrolyzer technology itself. We're
not an equipment supplier or manufacturer with our own
technology. Our development IP, I suppose, is in the integration
of the different technologies. So we haven't really spoken about
the methanol component, we'll get there. But what we essentially
do is we find the optimal end-to-end project configuration that
makes the economics work for the final offtaker. Because we start
with what is the price that we need to hit for our final product,
which is methanol, we'll talk about, it can be a bankable
commercially viable product.


And then we work backwards. So then we reverse engineer. Okay,
what does that mean in terms of the electrolyzer size? What does
that mean in terms of the hydrogen storage size? What does that
mean in terms of the solar to wind ratio? What does that mean in
terms of the battery if you need to add one? And so what we've
done is we've optimized that end to end. And what you'll see is
that you might have to do some slightly unintuitive sizing
decisions from an engineering perspective. So that's kind of
where our added value sits. And also just in terms of the
development of those individual pieces of the project and pushing
them forward at the same time.


David Roberts


Yeah, I'm wondering how much now because even if you have a
hybrid renewable system, I'm wondering how much sort of
overbuilding you do to try to boost that capacity factor. Like
are you overbuilding and throwing away a lot of power just
because it's so cheap?


Anthony Wang


Yeah, we do a little bit of that. So maybe a couple of things. So
a typical project for us, what that looks like we're actually
developing in Europe and in the US. So in the US, a site will be
very big, 8000 acres, which is 8000 football pitches. European
ones, I think the American ones are half the size it's like 8000
... Anyway, you get the point. It's huge. And most of that's
earmarked for onshore wind. So about 6000 acres is onshore.
Turbines are spaced far apart, so you need a lot of land. And the
remaining 2000 acres is a mix of solar PV and the process plant
itself.


And that will give you about, I mean, these are rough numbers,
but about 200 to 300 megawatt of onshore wind, one to 200
megawatt of solar PV. So you're looking at a combination of,
let's say 400 renewables. And then we would probably put an
electrolyzer that's around half the capacity next to that. So a
200 megawatt input electrolyzer. And that sounds like a very big
delta. But actually, if you look at lots of the studies that have
been done, they come to similar conclusions because you don't end
up curtailing anywhere near half of the power you end up
curtailing only a fraction of what you produce because there's
only very few hours where both the solar and the wind are
producing at peak.


David Roberts


Right.


Anthony Wang


Maybe just to complete the picture of the project. So that
produces about 20,000 tons of hydrogen a year, depending on your
load factor, which is a lot of hydrogen. That's I think the
equivalent of about 30'000 to 40,000 Tesla Model 3 batteries in a
day that's getting produced.


David Roberts


So the electrolyzer part to you is mostly just a commodity at
this point. When you're looking at big cost centers like the big
CapEx and OpEx costs, where are the big costs here? Like, are the
electrolyzers themselves a big cost center or is it all down to
kind of the cost of the power? Is that the biggest variable?


Anthony Wang


It's about 50/50. I mean, for us, we have kind of a renewables
plant or part and then a process part, and it's about 50/50
between the two, the electrolyzer representing the main component
of the process part. We've been doing a lot of, say, electrolyzer
shopping in the last couple of months and you're probably
wondering how that's going.


David Roberts


I am quite curious about what you're seeing out there in
electrolyzer land.


Anthony Wang


Yeah, the reality is no one has actually built and constructed a
200 megawatt electrolyzer to date. It's not because electrolyzers
are a risky technology, we've had them for hundreds of years. But
at the scale that we're talking, we haven't really got that much
experience. Even the biggest technology OEMs don't. And so as
much as there is a big boom in the hydrogen space, I think for me
personally, it's been quite a sobering experience being in the
market, actually trying to procure these pieces of equipment
because —


David Roberts


Is the hype getting a little out ahead of where the market is?


Anthony Wang


Obviously there's the hype and then there's the reality of
getting things done on the ground. It's not that I'm
disillusioned by what I've seen. It's more that you just realize
that there are so many practical implementation considerations
that you haven't thought of, right. Well, one is on pricing,
obviously, because there's very little, very few of these
projects have happened. There's not that much price liquidity and
so no one really knows how much this stuff costs. Not even the
EPCs who are meant to build this really know. So everyone's
trying to figure it out. People are also aware that there are
subsidies, so everyone's trying to make sure that they don't
leave a penny on the table in terms of how they price their kit.


And obviously you can imagine if everyone does that, then your
economics go out the window. So that's on pricing and all the
electrolyzer OEMs know the game and they're kind of looking to
find a way to play into that. And then in terms of the actual
technical and implementation challenges, ultimately this is going
to be a process plant, right. This project is going to look a bit
like a refinery. That means that every single valve needs to be
lined up, every single power cable needs to be at the right
voltage. And especially in our case, because we're off grid, for
example, when you try to run your entire renewables to
electrolyzer without — in the engineering terms, I think they
call it like clock — you don't have a base frequency that you can
follow, you end up having to create your own kind of grid
stability. And that brings it with a bunch of challenges around
frequency, voltages, harmonics.


David Roberts


Right? You're not getting any of those grid services. You kind of
have to do all that yourselves.


Anthony Wang


Yeah, so turbines, usually they're connected to the grid, so they
just follow the frequency of the grid. Whereas when you don't
have that, you need to create it yourself and then your
electrolyzer is there, kind of disturbing it a bit because it's
not entirely efficient. And so there's lots of day-to-day
engineering challenges that we need to overcome that, I at least,
had not expected when we started this.


David Roberts


Yeah, it does kind of seem like the mother of all optimization
challenges you've taken on here. There's like so many variables
moving at once. So you feed this cheap power into electrolyzers
and just one last question about electrolyzers. Just from looking
around in the market and your general sense of things, are you
anticipating or do you feel like the sort of market is
anticipating, substantial reduction in those costs or is that
just kind of a fixed piece in the middle of this puzzle?


Anthony Wang


Yeah, good question. Obviously, when I speak with our suppliers,
I always ask them because I hope that the prices that they give
me today are not reflective of where they hope things will end up
in the future. So today, they're obviously not pricing in that
cost reduction. That said, all of them are very optimistic about
the price reduction and usually, especially on the PEM side. I
mean, when you talk to the PEM electrolyzer suppliers, they tell
you that the reason they chose that technology is because it just
has a lot more cost reduction potential.


And you've got lots of levers there, right? You've got the raw
materials themselves switching from the very precious ones to the
slightly more common ones and that'll obviously reduce the cost.
Then the second one is purely in terms of the design. So lots of
the OEMs are trying to figure out ways to modularize not just the
stacks and the core kind of arrays of the electrolyzer so the
area where the hydrogen gets produced, but also the balance of
system and the balance around that stack. So the purifiers, the
transformers, rectifiers.


David Roberts


Right. All that stuff is still pretty bespoke at this point,
right, for big electrolyzers?


Anthony Wang


Yeah, it is. And this is where the traditional OEM kind of
equipment manufacturing model slightly overlaps with what
traditionally an engineering company would have done. So the big
EPCs would design stuff and engineer stuff to order rather than
having prefabricated productized modules. But what you're seeing
is that the intent is for electrolyzers to really follow what
wind and solar have done, where in the future, if you need an
electrolyzer project, you're not having to engineer for a year to
find the right size of purifying tank. But you can just call up
an OEM and they'll deliver you something that essentially comes
out of a box.


I mean, I'm simplifying, but that's the idea.


David Roberts


Yeah, something containerized.


Anthony Wang


Yeah, exactly.


David Roberts


And if those cost drops manifest, will that be a substantial
piece of making this kind of model viable in more places? In
other words, is that a big lever or how big is that electrolyzer
cost relative to say, the renewables on one side and the methanol
on the other?


Anthony Wang


Yeah, we have our projections for this obviously. So we have our
power part and our electrolyzer part. Obviously, we're more
optimistic about the electrolyzer part coming down further. We
don't expect renewable. I mean, there may be perovskite solar
panels, you may have some thought on that, David, but on the
renewable side, things will happen as they do. On the
electrolyzer side, obviously, this is a huge part because when
you think about that equation of cost of power, cost of the
electrolyzer and then the number of hours as you reduce the fixed
cost of your electrolyzer, the incremental impact of your cheap
power just becomes even greater.


So all the benefits that you get from going to the cheapest
places in the world so your windy deserts just get magnified and
you will get to a point where whereas today you use your power,
let's say it's 50 kilowatt hours per kilogram of power that you
need to make hydrogen. That efficiency conversion factor, when
you reduce the cost of the electrolyzer, it'll make a huge
difference to the economics for sure. We're very bullish on that
and we're hoping that those costs come down but we're not relying
on it. And our first project probably won't be benefiting from a
lot of those cost reductions.


David Roberts


Right. And of course, there's also just scale and learning.


Anthony Wang


Yeah, of course.


David Roberts


Just the natural cost declines that come with more people buying
more electrolyzers which I assume is going to be happening soon.
So then you synthesize this green hydrogen and then the question
is why not just sell the hydrogen? Why not sell the green
hydrogen? It's pretty precious these days, a lot of people want
it. Why not pipe or truck or however one carries hydrogen to
customers? Why the third step?


Anthony Wang


When we started this business we probably thought of two main
challenges. One was excessive production costs and then the
second was kind of the midstream transport challenges. And on the
production costs, we've kind of covered that but to the midstream
challenges. So maybe just as a bit of context. I spent my entire
career in hydrogen and green molecules, working with power
utilities, oil and gas companies. And at one point I actually led
a project called the European Hydrogen Backbone, which was an
initiative by the gas TSOs, the pipeline network operators in
Europe to try to repurpose their pipelines from natural gas to
hydrogen.


I'm a mechanical engineer by training. I spent a lot of time
doing hydraulic modeling of pipelines and compressors at the
time, and I learned quite quickly that hydrogen is a relatively
leaky gas. It's not the easiest to move around, and it's also the
reason that we don't really transport or store it at large scale
today. It's not that you can't do it. You can. But the economics
and the practical details of implementing it become quite
challenging.


David Roberts


Yeah, just to pause there since you were just talking about
having studied it, because I'm really interested in this
question. When gas infrastructure companies talk about this, I've
seen two things. One, I've seen mixing some hydrogen in, right,
just sort of lower the carbon intensity. And then there's
discussion of just turning the infrastructure over to hydrogen
entirely. And my question is, just from an engineering
standpoint, are those pipes ready for hydrogen? It seems like
hydrogen is a lot harder to hold onto than natural gas. And
there's thousands of miles of these pipes. Are they just going to
work or is this going to be a thing where you have to go through
the whole system and sort of fortify it?


Anthony Wang


Yeah, it's a good question. And I mean, just on blending and
repurposing. So in Europe, the discussion is mainly on
repurposing. So fully converting, not blending hydrogen into gas
pipelines. I think it's a bit depending on the political
environment where you are in Europe, blending is not really seen
as a viable solution. The energy impact is tiny because hydrogen
is less dense than natural gas. So when you blend like 10%, I
mean, there's only a fraction of that on an energy basis.


David Roberts


Yes, I mean, I think it's just a political fig leaf here. I'm
sure it'll go away once the practical challenges become more
clear here too, I think. But at least right now, natural gas
companies are kind of waving it around as one of their "Please
don't kill us" ideas.


Anthony Wang


Yeah, that's on blending. Just to clarify on the technical
viability of repurposing, I mean, in Europe, they've actually
done a lot of work on this and a lot of good work. I mean, the
German TSOs have just had DNV GL, a very reputable engineering
company, look at this and they essentially conclude that just on
this, you do need to actually go through each single pipe and
look at whether it's ready or not. So it does take a lot of work
to do. But in Europe, the pipelines are in a very good state and
you can repurpose them, but it will come at a cost. Mainly, at
least currently, with the way that the codes are set up, is that
you need to derate them. Which means that whatever pressure you
are operating the natural gas pipeline at, if you want to operate
it for purely hydrogen under the current safety standards, you
have to lower the pressure. And when you look at the hydraulics
of hydrogen, you really don't want to be piping it at low
pressure because it just becomes very expensive. And so on the
per kilometer or mile transported per megawatt hour, it becomes
quite expensive.


David Roberts


It's just more manageable at high pressure.


Anthony Wang


Well, you want to store it at high p... So because hydrogen is a
lot less energy dense than natural gas, to get the same energy
content throughput, you need to compress it more and transport it
at much higher velocities. So when you don't do that, you end up,
kind of like, transporting hydrogen, but very slowly. It's a bit
like a congested motorway. And so in terms of value for money,
obviously you get a lot less throughput and capacity of
transport. That's the main reason.


David Roberts


Do you think, I mean, in Europe, I suppose, is probably the most
promising place of anywhere, that this is actually going to
happen on a timeline that is meaningful? Or alternatively, are a
lot of green hydrogen projects going to end up doing what you're
doing, which is basically being off the hydrogen grid, converting
hydrogen before you ship it out? I'm sure there'll be some of
both. But how bullish are you on hydrogen infrastructure
generally? Pipeline infrastructure?


Anthony Wang


Well, we've not bet our company on it. That said, look, I mean, I
wish them the best, right? Obviously it's a hugely ambitious
project and I think that they're making progress. But ultimately
I wouldn't want to for our projects and the ones that we're
trying to raise financing for. The argument that you've got a
business case because 5-10 years down the line there may be a
hydrogen pipeline that comes in and it's the same for CO2
infrastructure, really. I mean, it's just not going to fly when
it comes to raising debt financing for a project of this size.


David Roberts


And there's no practical way for you to build a pipeline even if
you wanted to. So are there even alternative ways of transporting
green hydrogen that are practical at all? Or is it pipelines or
nothing?


Anthony Wang


At the scale that we're talking now — hydrogen is already
transported in trucks and you can put it in tanks and stuff and
that's usually compressed, you could liquefy it as well, but
that's even more energy lossy. You end up having to compress it.
So you pay for the compressors, which are expensive, or the
liquefaction, and then it's again not very dense, so you end up
having to pay a lot for the transport itself — and at the scale
that we're talking, 20,000 tons a year, that's not something that
you would want to be trucking around. Also from a safety
perspective, I'm sure that's not ideal and lots of local
authorities would not be very happy with that.


David Roberts


Yeah, that's a lot of trucks.


Anthony Wang


Yeah.


David Roberts


So it's just not practical, basically, at this point to build
green hydrogen out in the middle of nowhere where the renewables
are good.


Anthony Wang


Right, yeah, exactly. And that's also why I think today most of
the hydrogen projects that are actually getting somewhere and
having traction are the ones that are near industrial clusters
and by ports and next to an existing refinery, which makes total
sense. Right. Decarbonize the existing hydrogen that you have.
But that's not going to cut it when you're trying to integrate
renewables from the best regions into where the demand sinks are.


David Roberts


Right. Yeah. Are there even exclusively hydrogen pipelines now?
Is there much of that infrastructure now?


Anthony Wang


So it does exist. So there is what's already available and there
are industrial clusters and there are pure hydrogen pipelines.
They're mainly operated by the industrial gas company. So the Air
Liquides, the Air Products of the world, but these tend to be
quite small. So these are 10-20 inch pipelines that aren't meant
to transport across long distances. These are mainly pipes to
bring it from one side of the industrial site to the other or as
a backup. I mean, they work, they're totally safe and people have
experience building them. But at the scale that the natural gas
pipeline companies are thinking, which is like 48-inch huge cross
country type pipelines, we don't have anything at scale or that's
commercially kind of running.


But the TSOs, especially in Europe, are running pilots and
trials. And I think there's one connecting Germany and France.
There's a bunch of projects in the Netherlands. I know that the
Dutch TSO is very active on this, so there's definitely stuff
coming. But as to when and where exactly it'll be up and running,
I don't know.


David Roberts


Right. And I'm thinking of the US. We have this huge hydrogen hub
program. I'm sure you're familiar with it. It's a similar idea,
building these huge industrial clusters. And I guess we're just
going to have to build pipelines for all those in the US. Because
there's not sort of curious about site selection for those too.


Anthony Wang


Yeah. As a principle, it's very difficult as an individual
project developer to make a pipeline like this work. I mean, it
really requires everyone to come together and the stars to align.
And then you often need — this is why these companies are
typically regulated, usually is, because that's the only way to
finance it. And so I know we've looked at, for example, using
pipeline transport, and as an individual company, there's no
business case for building a pipe just for your own uses. It
would have to be because you pool into it with other producers
and off takers.


David Roberts


A little coordinated industrial policy to build that
infrastructure. So you make the green hydrogen and then you
combine the green hydrogen with CO2, basically to make methanol.
So my first question about that is, where do you get the CO2?
Because you've dodged the importing and exporting electricity
problem, you've dodged the importing and exporting green hydrogen
problem, but now you've got an importing CO2 problem. I guess my
question is, how big of a problem is that? How available is CO2?
How easy is it to get it where you need it?


Anthony Wang


Yeah, when we looked at this, it was like we kind of put the main
energy carriers and commodities, we stack rank them electricity,
hydrogen, CO2, methanol. Which one would you rather transport and
which one would you rather store?


David Roberts


Right.


Anthony Wang


And kind of where you end up is you really don't want to
transport electricity if you've not got an existing cable
network, you don't really want to transport hydrogen. CO2 is a
bit easier. I mean, it's still not ideal. It's an industrial gas.
You need to liquefy it. But it's better than hydrogen. Much
better. But the best thing to transport in store is methanol
because it's liquid at room temperature. So what we try to do is
you try to bring everything into our sites and then make methanol
there, and then ultimately transport the methanol out to a port
and on the CO2.


So we have two options, really. One is to work with industrial
point sources and we try to work with companies who have either
unavoidable process emissions so cement companies, or biogenic
sources of industrial CO2. So pulp and paper.


David Roberts


So this is carbon capture you're talking about CCS.


Anthony Wang


Yeah. So this is carbon captured.


David Roberts


Is there enough of that to supply you?


Anthony Wang


So, obviously, we've got quite a big carbon CO2 supply problem.
So from an availability in the flu gases, for sure, obviously, I
think you're asking about the carbon capture itself.


David Roberts


Right. Is enough being captured to supply a substantial market?


Anthony Wang


Interestingly for us, when we started this, we looked at the
market and said, okay, very few are actually capturing the
carbon. But when we spoke to a lot of these potential CO2 capture
companies and suppliers, to our surprise, lots of them already
had been doing lots of engineering study and were very keen to
implement this technology. The problem for them is they had
nothing to do with the CO2. Interestingly, for a cement company,
especially the ones that we spoke to in Europe, they're under
such immense pressure with the EUTS, the European Carbon Cap and
Trade system, where they're essentially, once that's in full
swing, their product price doubles because it's one ton of CO2
per ton of cement.


Cement sells for 50 euro per ton. So you can do the math. Right.
So for them, they had to do something. So they've been studying
this and looking to pull the trigger on some investment
decisions.


David Roberts


I thought there were industrial uses of CO2. I thought there was
a market there.


Anthony Wang


Yeah, CO2 is already used today for greenhouses, but at a very
small scale. And usually, the CO2 is not coming from big
industrial point sources, although there are some. So there's
some ammonia plants that already capture CO2. So that's one is on
the industrial point source. The other source that we think is a
very good option and where we have lots of discussions, is with
biomass, often anaerobic digestion. So if you look at RNG, what
you have actually is a very pure source of CO2, because in the
process of making RNG, what you do is you essentially purify RNG
from biogas.


And biogas is about 50% RNG and 50% CO2. So in the process of
purifying RNG, you actually inadvertently purify CO2. But because
there is no offtake for it, the CO2 is currently vented. People
don't make a big deal out of it because it's biogenic CO2, right,
because it comes from dairy manure or agricultural residue. But
it's still right. It's CO2 that's vented into the atmosphere,
which we could at that point, you're not really talking about
carbon capture, right? It's just connecting it to a pipe because
it's already pure. You don't need to scrub it or clean it.


And that CO2 is a very good source for us because, a), it's very,
very pure, so it's cheap, and b), it's obviously biogenic.


David Roberts


Well, if they were going to throw it away, if you hadn't come
along, I would imagine they're willing to sell it to you quite
cheaply.


Anthony Wang


Yeah, exactly.


David Roberts


So in terms of just sort of absolute numbers, you're not worried
about supply of CO2, you think you have enough CO2 to go on for a
while or what's your outlook on that?


Anthony Wang


Yeah, so, I mean, just to give you an example, right, we have an
agreement with Cemex, a major cement company, and their cement
plant produces 450,000 tons of CO2. And one of our projects takes
150,000. So three of our projects are needed to decarbonize one
cement plant, just to give you a sense of the scale. And then
these guys have tens of these around the world, and that's just
one company. So in terms of scale, we're not too worried about
the CO2.


David Roberts


Right. So in terms of its availability in general, clearly
there's a lot of it. But in terms of the mechanics of getting it
to you, that's not a bottleneck at all. How does it come to you,
by the way? Does it come to you in a truck?


Anthony Wang


So we use a combination of rail and trucks. So both CO2 and
methanol, we rail and truck. Typically, what we find is that
actually the CO2 producers or industrial facilities are again
close to ports where traditional industries are. And so what we
end up doing is we use the same infrastructure, so the same rails
and same train rail, cars and trucks to import the CO2 and then
export the methanol. And it's a similar principle where we use
tankers. So you liquefy the CO2, put it on a train and then the
methanol is already liquid and you export it out.


And so that infrastructure all exists and it's just a matter of
connecting to the right infrastructure.


David Roberts


And to be clear, you intend to only use captured CO2, not like
natural CO2 from underground, because your sort of process is
only carbon neutral if you're using the carbon that's been
captured somewhere else.


Anthony Wang


Yeah, exactly. And I mean, there's lots of debate and discussion
about what exactly is good CO2. Maybe that's a rabbit hole that
we don't have time to dive into.


David Roberts


Have they made up a bunch of colors for that yet?


Anthony Wang


Wouldn't be surprised if they're getting to that stage. So in
Europe they call it biogenic CO2, which ultimately means that it
has to be CO2 with a short cycle. So it can't be CO2 that's from
the ground basically. Right, but obviously, even with things like
processed CO2, you can argue how green is that compared to if it
was from agricultural residue? But then you can argue that some
of the biomass that's being used today for power and heat
production from wood in the Amazon forest isn't great either, so
it's a pretty big topic.


David Roberts


Or direct air capture. Is direct air capture even enough of a
thing for you to have thought about it? Or is that still just a
gleam in somebody's eye, more or less market wise?


Anthony Wang


Yeah, it's not competitive at the moment, so obviously for us
it'll be an option in the future. Today there is not nearly
enough scale and it's not competitive enough for us to consider
it. But I mean, I'm definitely keeping a close eye on it, but for
now, we stick to the industrial point sources. Obviously, it
would take out a lot of the transport considerations because we
could power the direct air capture with our own renewables. So we
could just put everything in the same location.


David Roberts


Yeah, you could make your own CO2.


Anthony Wang


Exactly.


David Roberts


That would add another piece to the optimization puzzle. You're
going to have to bring AI in to deal with all this. So I think my
knowledge of e-fuels is pretty sketchy, as I think most people's
are. My understanding is that if you have hydrogen and CO2,
there's a number of different fuels you can make. So of all the
sort of possible fuel choices, why methanol? Is it easier,
process-wise, to make it, or is it something about the market for
it is better, or what are the sort of considerations?


Anthony Wang


Yeah, for sure. Obviously we had to pick one. We looked at the
hydrogen market and if you look at where most experts think
hydrogen will be used today and likely in the future, it's mainly
as a feedstock. So it's for ammonia, methanol, steel and
sustainable aviation fuel (SAF). And so those are the main kind
of derivatives that we considered. Obviously we looked at the
technical side, so we've talked a bit about the transport options
and methanol kind of comes out on top. There ammonia, better than
hydrogen, but still quite a toxic gas as well. We had to pick one
to start with for our first project.


But I would like to add we're called ETFuels, not ET Green
Methanol for a reason, not only because the latter is not very
catchy, but also because we see our off-grid production model as
a way to scale into a multi-fuel future. But for our first one,
we chose methanol. Again, partially for technical reasons, but
also part of it was just timing, because this was around the time
that the big Danish shipping company called Mersk made a huge
announcement that they essentially committed to methanol as their
decarbonization fuel of choice. And they had put in an order for
eight methanol-fueled vessels at the time.


This was a couple of years ago. Obviously, that number of
methanol ship orders has grown exponentially since then. Last I
checked, in the first half of 2023, methanol vessel orders
represented 62% of the order book, outstripping all other fuel
types. And so for us, the message from the shipping sector was
clear. If we're going to decarbonize and do anything in the next
ten years, it has to be methanol, because the ammonia engines
just aren't ready yet. So that was quite an obvious one for us.
And then on top of that, methanol is already an existing market
of 100 million tons a year, used as a chemical feedstock for
various plastics and chemical products.


So that's kind of the main reason that we went with that fuel.


David Roberts


So you chose methanol because it's easy to transport at room
temperature and there's a relatively guaranteed market for it,
but you think the model, there's nothing about the model that's
going to prevent you from moving into other kinds of e-fuels.


Anthony Wang


Yeah, exactly. I think one of the reasons the model is
attractive, the off-grid model, is because so much of the cost
and learnings are applicable to other fuels as well. So obviously
the renewables is the same, the hydrogen production is the same,
and this is the notion of hydrogen as this platform chemical. And
then the final part is, depending on which fuel you go with, is
15-20% of the total CapEx. But you could have a train for
ammonia, you could have one for methanol, you could even have one
for e-methane, which some people are doing, which is kind of
e-RNG.


And so for us, it's — obviously we bet on methanol as our first.
We think the market is ready there, but ultimately, ammonia might
have a big future in shipping as well. And ammonia doesn't have
the CO2 problem. So for us, it's a really good way to kind of
keep our options open.


David Roberts


Is making methanol out of hydrogen substantially more or less
expensive than making ammonia out of it, or methane? Or are there
substantial cost differences in that last piece of the puzzle?


Anthony Wang


So the main difference is — they're all a bit different. So
obviously, ammonia, the big benefit is you don't need CO2. So
whatever you were paying for the CO2, you're now no longer paying
for.


David Roberts


Betraying some rank ignorance here, but how on earth do you make
hydrogen into ammonia?


Anthony Wang


You combine it with nitrogen, so you take nitrogen out of the
air, so you purify nitrogen and then you run it through a
reactor. It's a similar type of synthesis reactor where you
basically run your gases at a certain temperature over a
catalyst. So for ammonia, it's called the Haber Bosch reaction.
For e-methane, it's called the Sabatier reaction. I think the
methanol reaction doesn't have a name, but they all have similar
principles, which is you put it into a chemical reactor, hydrogen
plus some other compound.


David Roberts


Right, so it's not no, it's very similar.


Anthony Wang


I mean, there are obviously some technical, detailed process
differences. So ammonia in terms of reaction, temperature in
terms of how well it operates under fluctuating load. So all of
these processes, whereas the electrolyzer is very flexible, most
of these chemical reaction kind of chemical plants are a lot less
flexible because you need to maintain the temperature and the
pressure. And it's much more like a refinery than an electrical
kind of process. And then for methane, when you're obviously
methanol, the last step is distillation, where you have to
separate the methanol from the water, whereas with methane,
you're separating a gas from water.


So there are some kind of nuanced differences. But in terms of
the big picture, I mean, your renewables is the same, your
hydrogen is the same, and the last 20% you can kind of flex that
if you need to.


David Roberts


So in terms of carbon-neutral methanol, for which there is this
sort of nascent market just emerging, these shipping companies
just sort of getting into this. Are there lots of competitors? Do
we know? I mean, is there a good sense yet, like, what it ought
to cost? I guess it's far from commoditized at this point. But
how mature is that final market? Or is this sort of like
everybody's figuring this out as they go?


Anthony Wang


Probably more the latter. I mean, there are definitely
competitors. I'd say most e-fuel announcements you see are
probably around ammonia because it's just slightly easier because
you don't have to source CO2, which is a challenge. So for us,
it's a competitive advantage, I think, that we know how to source
CO2 and we know our way around that market. On your question
around pricing, so of course people are figuring it out. There
are a couple of pilot plants. There's a few that have just
started, kind of just taken an FID. Orsted has just bought one in
Sweden where they've started construction, but they aren't
producing yet, so no one really knows how much it's going to cost
until it's operational.


Obviously, we know, today we would be producing at a price
premium to fossil methanol. But that'll be the benchmark is — how
many times more expensive are you compared to either fossil
methanol or the fuel that you're replacing. So in our case it'll
be fuel oil for shipping.


David Roberts


Yeah. I'm guessing you're a lot more expensive than fuel oil at
this point.


Anthony Wang


Yeah. So at this point we're significantly more expensive.
Obviously what gives us comfort is that we're well one is the
cost reduction trajectory of the technologies and the learning
that we think we will gain and two is our relative cost
differential against our direct competitors which we see as green
methanol. Right. So we don't think we will be directly competing
with fuel oil because one obviously from a regulatory perspective
those get treated very differently and all the incentives that a
shipping company, especially in Europe, in the US you've got the
IRA in Europe there's lots of incentives for fuel switching
demand side kind of quotas and ways to benefit.


So you only get those if you're to decarbonize fuel. And for us,
what gives us comfort is not so much the comparison to fuel oil
but the comparison to other green methanol projects. And for us
the off-grid nature gives us this competitive pricing advantage
because of our cheaper power and that's what allows me to sleep
at night.


David Roberts


Well, one question I have is, what counts exactly as
carbon-neutral methanol? Because, as Volts listeners know,
because they listen to the hydrogen tax credit episode, the
question of what is the carbon intensity of your hydrogen is far
from straightforward. And there's a lot of debate now about
whether to require it to be off-grid or exactly how to measure
the cleanliness of the electricity going into it, et cetera, et
cetera. It's a very complicated debate here in the US. I'm sure
you're very familiar with it over in Europe too, you are very
clearly making carbon-free hydrogen because nothing's more
additional than renewables that you are building yourself to
attach to your electrolyzers, right.


So you clearly pass the bar. But is that same debate live in
Europe? Because if people can use cheaper grid renewables I don't
know, maybe that actually wouldn't give them a cost advantage. I
don't know. But is there debate right now over what counts as
e-methanol?


Anthony Wang


Yeah, for sure and really good point on the additionality I
hadn't mentioned. Thanks, David. It's a big part of why we've
chosen this model as well. It's the cost, it's a scale and it's
the additionality on the debate around what is green methanol. So
for sure, I think in the US it's a bit of a different discussion.
There's not really so much a definition of what is green methanol
because you make it compete with fossil methanol through the IRA,
through the tax credit. In Europe, we've just had a big
legislation passed called the Delegated Act for Renewable Fuels
of Non-Biological Origin.


Anyway, lots of rules kind of were described in that one is for
green hydrogen, which is the one that you talked about, which I
think is the similar discussion in the States around
additionality temporal correlation, geographical correlation,
which we comply with. And the second one is around CO2
essentially how you carbon account for the CO2 in a fuel like
green methanol. And the European policymakers agreed on that. So
the commissioned parliament and so what we have is up until 2040
any CO2 is okay. So that's kind of what they agreed on. And then
beyond that, you would need to be either unavoidable process or
you need to be biogenic.


But for now, their argument is because there is so much CO2
that's kind of going into the atmosphere that we're not
decarbonizing — all of those sectors, for those sectors, you can
capture the CO2 and use it and it'll qualify as a "renewable fuel
of non-biological origin." That's what they call it.


David Roberts


Interesting. So as I'm thinking about a project like yours in the
US in a post-Inflation Reduction Act world, I'm sort of slightly
boggled at the number of tax credits or subsidies that you could
rack up with this. You could get tax credits for building the
renewables, tax credits for green hydrogen which are substantial.
I think there's tax credits for using the CO2. I think there's
tax credits for the e-fuels. Like every piece of this is going to
get money showered on it from the IRA. I'm wondering whether that
makes these projects more attractive.


I mean it must. And whether you've been thinking about that. And
two, just on a more general basis, how you think about subsidies
and whether you need them and to what extent this business model
relies on them.


Anthony Wang


Yeah, we founded the company before the IRA, before all these
policy and incentive mechanisms came out. And we founded it
because we believe there to be a commercially viable proposition
without it. So we didn't create a business that relies on or is
reliant on subsidies. I don't think that would make for a very
good business.


David Roberts


Well, there are plenty of them.


Anthony Wang


Yeah, I guess so. But I mean, obviously now for us what this
means is kind of accelerated our trajectory so we can do things
much faster and basically just get going. And obviously we can't
not go for them because it'll make us less competitive because
our competitors are. In terms of which ones exactly, I mean, we
take quite an opportunistic approach. Obviously in the US we'll
try to play into the tax credits the extent to which you can, I
don't know, what I would call "double dip" in the sense that get
benefits from the US credits and then export your fuel to Europe
and then get more benefits there from avoiding the EU ETS.


I don't think that's entirely clear. I mean, I'd be quite
personally, as a taxpayer—if I were a US taxpayer—I'd be a bit
skeptical of that. And even as a European one, I'm not sure how
comfortable I feel with importing US-made fuel subsidized with US
tax credits and then getting another whammy on top of that in
Europe. Yeah, but I think that's all to be identified in Europe.
Obviously, you've got the innovation funding there's all the
onsite measures, which I think are much better. Like for example,
the renewable fuel quota. That's a very clean quota for ships
where they just have to switch a certain share of their fuel to
be green.


And then you've got various other kind of incentive schemes,
carbon contract for differences, which are meant to be a support
mechanism for hydrogen production. And so we'll see for us,
basically what it means is that our projects are even more viable
than they were a year and a half ago.


David Roberts


Have you done the math yet on a project with all the IRA
subsidies? Because the green hydrogen tax credit is ginormous.


Anthony Wang


Yeah, obviously we've done the math just to give you maybe cut
some numbers. So the $3 per kilogram hydrogen tax credit
translates to about $600 per ton of methanol. And just to give
you a sense of fossil methanol, so methanol made from natural gas
today, I mean, I haven't checked the latest numbers, but
historically it's kind of traded at around $500 per ton. So
that's only for your hydrogen. And then on top of that, there is
potentially a CO2 credit, which again, the extent to which we can
play into that, I don't know. But the CCU tax credit is $60 per
ton of CO2.


And in terms of when you translate that to methanol, you would
get to around $100. You multiply by 1.5. So again, it's a lot of
you add it up, you get to like a $700 per ton of methanol tax
credit compared to the fossil price of $500.


David Roberts


Is that enough to erase the delta with the fossil kind?


Anthony Wang


Yeah, we'd be in the money for sure.


David Roberts


I mean, it would be wild to be on the market selling carbon-free
methanol that is cheaper than the carbon kind.


Anthony Wang


So that raises the question is what you're paying fo, right?
That's where it's different in the US than in Europe. In the US,
essentially that's the mentality, right? You're not trying to
sell some different product, you're just trying to sell the same
product cheaper. And that's why you need these support schemes to
make that work. Whereas in Europe you're essentially saying,
well, it's green, so it's okay that it's more expensive, but you
have to do it because it's green. So it's kind of a different
mentality.


David Roberts


Yeah, there are more sticks in Europe and we're all carrots over
here in the US.


Anthony Wang


Yeah, but I mean, from a developer and financiers perspective,
it's not clear which one is better because obviously with the
renewables, the drawback in the States was that one year you had
them one year you didn't. Whereas in Europe the demand side
signal meant that you had a very kind of fixed base load of
demand.


David Roberts


Right. Yeah, that's interesting. So, the final question is just,
it does seem like to some extent this business model is a
reaction not to technological factors, but to socioeconomic
factors. So, for instance, the limits of the grid and the
slowness of getting on the grid, the slowness of interconnection,
the lack of hydrogen pipelines, these are kind of bottlenecks or
pressures that one can imagine easing over time. Right? One can
imagine the grid getting built out more. One can imagine green
hydrogen, I don't know, I actually have trouble imagining green
hydrogen infrastructure being built. But who knows, it could
happen.


So, I wonder if those became easier and they were less of
pressure points, would some of the rationale for this business
model go away?


Anthony Wang


Yeah, I'm not sure if I fully agree with that statement. Just
from the perspective of — yeah, okay, there are challenges with
the incumbents and the pace that they're getting things done. But
for us, it's also fundamentally what is a more efficient way to
run the energy system. It's not just because it's not being done,
we need to find some loophole that can make it work.
Fundamentally, you can ask the question if you had a renewable
energy system or an energy system that was driven mainly by
renewables, is it more efficient to overbuild your grid, to run
all that stuff intermittently —


I mean, I've been part of grid planning sessions in Europe and
when you've got capacity factors of solar of 15% to 20% and wind
of 25% to 35%, you have to build an enormous grid to balance
that. By the time that you've actually built out the grid to kind
of run your power system base load, your balancing cost,
sometimes they call it balance of system, basically the cost of
all the extra stuff to keep it running becomes quite excessive.
So, I think a study by Imperial estimated that that cost would be
50 to 60 pounds per megawatt hour of just pure balancing costs.
That's in addition to the renewable costs, which by the way are a
lot less cheap in Europe than they are in Chile.


And so, you very quickly get to power prices which are much
higher than what we are paying today. And then you can wonder,
wouldn't it be more efficient if you could import some of that
cheap power, put panels where it's sunny or put turbines where
it's windy and import the power. And then also the other thing
is, does it even make sense to try to aim for this type of base
load, supply driven system or should we be running more flexible
assets? And in many ways, what we've got is just a flexible
asset, right? It's an electrolyzer that follows the renewables.


And so, the system benefit of an asset like that is quite big.
So, I don't think I fully agree with your framing of the business
model. I think there's more to it than just it's a way to bypass
all of the slow incumbent infrastructure. But it's definitely a
good question and I don't think anyone really knows the answer
until we've tried both paths.


David Roberts


So, you think that the limits of electrify everything are more
than just incidental or contingent? You think we're going to run
into these balancing cost issues and it's going to make more
sense to run more stuff on liquid e-fuels?


Anthony Wang


Not for everything, obviously. I wouldn't ever buy a diesel car
and then hope to ever be able to afford e-diesel rather than an
electric car. So, obviously there are time and place for
everything. For certain sectors, though, I definitely think, I
mean, I'd rather fuel my ship or my airplane with an e-fuel made
where renewables are cheap than to try to do that next to
Heathrow Airport in London or something like that. So, I think,
as always, it depends and we're very targeted in where we go.
We're not looking to sell e-fuel to heat homes or do anything
like that.


It's very targeted to the sectors which are hard to abate and
don't have other options.


David Roberts


This has been super fascinating. I hope listeners agree. I hope
we haven't gone too far down the technical rabbit hole and lost
people. But I find this, this is where all the sort of
interesting issues in the energy world are hitting the ground,
right? Like you're trying to actually do these things. And as, as
you said, when you start trying to actually do things, whole
different challenges arise and whole different sort of questions
arise about optimization and stuff like that. So, super
fascinating to walk through this with you. Thanks so much for
coming on, Anthony.


Anthony Wang


Thanks for having me, David. It was a pleasure.


David Roberts


Thank you for listening to the Volts podcast. It is ad-free,
powered entirely by listeners like you. If you value
conversations like this, please consider becoming a paid Volts
subscriber at volts.wtf. Yes, that's volts.wtf so that I can
continue doing this work. Thank you so much and I'll see you next
time.


This is a public episode. If you'd like to discuss this with other
subscribers or get access to bonus episodes, visit
www.volts.wtf/subscribe