Plug Power Inc. (PLUG) Earnings Call Transcript & Summary

What a pleasure to be here today. I've been on this and many of you have been on this journey with me over the last 15 years. And it has been a journey as really Plug has built really the first market, first market for hydrogen fuel cells. And I can remember the early days and putting -- going into a market, which really wasn't that sexy, putting fuel cells into forklift trucks, it doesn't really capture the imagination. Now that video captures the imagination. But we learned a lot during that journey. And I had this meeting in Washington Court House, Ohio. And it came after just a disaster at Walmart because one of our suppliers delivered hydrogen, it was poisoned hydrogen. The retail -- the station they build to support the effort really wasn't that good. The service, which we had third parties doing for us didn't work. And my friends at Walmart said to me, Plug, if you want to sell anything, you have to be able to provide us the fuel, you have to build the fueling stations, you have to provide the aftermarket service. And I'm not the smartest guy in the world, but I sat back and said, hey, if my customer is telling us that's what we have to do to sell product, that's what we'll do. And you know that, that journey was really important. And probably the most important meeting I have had during my career at Plug. Because at that meeting, we began to understand the importance of a hydrogen ecosystem. You couldn't just provide one part of it. You had to really think about it as a system. And that's really what we have done at Plug. We have really built out the hydrogen ecosystem. And if you think about it, we have gone out and asked folks who joined us, we don't really purchase companies. We've done a lot of acquisitions, but everyone who's come to the Plug team, we asked them to come join us. We bought the first company in Tennessee that knew how to build hydrogen plants. They're the ones who did the first liquid hydro plant ever outside the industrial gas companies. That was really important to us at United Hydrogen. And we started dreaming about how we could do 500 tonnes a day of green hydrogen. And we thought to ourselves, we really need to have electrolyzer capability. And Plug went and asked a group of folks who are really research folks for stacks in Concord, Massachusetts, to come join the Plug team. And we bought a company Giner ELX, which had the best stack technology in the world. Just go check the DOE website. That's just not Andy Marsh telling you that. And then we went and bought a company that actually knew how to make large-scale electrolyzer systems in plant. This company was in the Netherlands. It gave us a European footprint. The company was framed. In 18 months, we've taken a company that was 100% oil and gas and transitioned them to renewable energy. That's pretty remarkable. 250 folks, both in the Netherlands and Pune, India. We changed the business models, but they had the skill sets that were required to make the transition possible. We also understood that cryogenics was really important to the success of this business. That's why we have 2 companies that we acquired in Houston, Texas, who were experts in LNG. Again, I think this is Plug thinking through how do you transition these industries. And we've taken those team and now they're building cryogenics, liquid hydrogen trailers, as well as liquefying hydrogen. Folks in Tennessee that we added actually gave us a logistic network. I think probably we have the first or second largest number of hydrogen trucks on the road supporting customers. There's over -- I was going to say 39, but we have the 40th out there today. We actually have over 40 trailers on the road, making sure our customers have hydrogen all the time. And that's really critical. And so when you think about it, then you get to the fueling stations, you see our large-scale stationary products. You see today, we still are putting out lots of fuel cells for forklift trucks. We have some good friends from FreezPak here who are kind of leaders in freezer applications for distribution to wholesale folks. You look around, Plug has actually done it all. In the whole ecosystem, Plug has really made it come together. And hydrogen is really important in this journey that when you take a step back when it comes to climate change, people get all excited about mobility and other items. But 26% of the CO2's being emitted is actually being for things which aren't all that exciting but are really important, like making ammonia, like making green steel, like making concrete. The carbon footprint in those items is as large as the carbon footprint for mobility. But hydrogen certainly is a better solution, we believe, for many, many commercial applications in mobility today. And I think ultimately, other applications when it comes to mobility. Hydrogen is really the Swiss Army knife of this transition to renewable energy. We're going to help the world get to net zero. And look, I know there's a lot of investors in this room, it's a big business opportunity. People like -- not Plug, people like Bloomberg and Goldman are talking about this being a 20% of world's energy coming from hydrogen. It could be a $10 trillion a year opportunity, huge. And look, while I take another step back. And today, you're going to hear some really great presentations. Sanjay Shrestha is going to talk about not only the 500 tonnes a day that we're developed -- green hydrogen that we're developing here across the United States. But also our expansion in the Europe, where we're building -- I know my friends from Antwerp-Bruges are here today where we're building a plant in Antwerp-Bruges of liquid hydrogen. Sanjay will say to me, and I think you'll hear it from him today and I put a smile on my face every time he says it, and it's something I believe, we are going to be the category king with green hydrogen. Nobody is doing what we are doing. And then we're going to hear from Ole Hoefelmann, who really -- he's come and joined us about 18, 19 months ago and took a group of about 15 folks, 20 folks and turned it into a business force in the electrolyzer business. This here is a real, real cool picture. That's the first offshore electrolyzer. Really, really neat. But this business, as Ole is going to say, has a sales funnel of over $25 billion today. Sales funnel is not sale, but it just shows the level of interest in this business. And on top of that, Ole is going to talk about how we have 1.5 gigawatts of orders already for this product that we just really started. And Jose is going to talk about all our applications, especially the stationary power market, which when we step back and you think about as my Chairman will tell me, Andy, you're riding 4 unicorns. One of them is the great work Sanjay is doing with green hydrogen. Another unicorn for Plug is this electrolyzer business. And in the apps business, Jose is estimating for the U.S. alone, our stationery products can be over $350 billion opportunity in the near term. And I think probably many of you have seen what Microsoft said about our products. And you're going to hear from our buddy in Europe, I really like this picture -- our buddy in Europe, Benjamin Haycraft, who runs our activities about the huge opportunity Plug has in Europe, who today is going to talk about some new pedestal customers in Europe today, going to talk about our HYVIA JV, I think you'll really enjoy that. Now before I turn it over to the team, I always think -- when I think about Plug, what we do is real things. And last night, most of you were on the tour, and those who are online, you can do a virtual tour. You saw a world-class Gigafactory that Dave Mindnich and his team here in Rochester has been building, as well as other plants around the world. If I look out this window, and I know those online can't see it, you see a cryogenic trailer that I actually saw a week ago in Houston, Texas, being built. And now it was driven up here from one of our drivers from Tennessee that delivered this to show off our technology. Outside, nobody else could show this level of product. You can see the Plug electrolyzer. It's a 5-megawatt electrolyzer that's destined for our plant's skid, that's destined for our plant in Georgia. You see the HYVIA van, and you'll hear more about that van today. But point I always like to emphasize, Plug's not vaporware. This is not just PowerPoint. This is real things, and real things are tough sometimes, but Plug does real things. So I'm going to get off stage so you can hear the real details. But let me say this, we have a tagline that says, hydrogen at work. I think if you look around, around this building, outside, you really do see hydrogen at work. So it is now my pleasure to introduce our VP of Operations, who's done a wonderful job helping really to think through how we scale this business. Dave Mindnich as well as my buddy, Dan O'Connell, who again joined the Plug party. And we acquired Dan's company years ago, and we've taken that from 4 people to 275, Dan. And Dan is going to -- Dan really drove so much of the work that made this facility here in Rochester possible. So Dave and Dan, it's time for you guys.

Thank you, Andy, and welcome to the world's first PEM Innovation Center in Gigafactory that Dan and his team have been building over the last 2 years. So a little bit about Dan, a little bit more. So Dan has been in the fuel cell industry for over 30 years with his last position, as Andy mentioned, as the CEO of American Fuel Cell. Dan has also been an advocate for this region for a really long time. and he's built a world-class team here in Rochester that he got to me last night. And the team that Dan's built in Rochester is I would put up against any team I've ever seen or worked with. So thank you, Dan.

Thanks, Dave. As Dave said, I've been in this industry a very long time. And a lot of people, as Andy said, have talked about hydrogen, done studies. They've done demonstration projects over and over and over. I sort of got tired of that in my last job. And so when I started American Fuel Cell, I really wanted to move the industry forward. And when Andy acquired the company to vertically integrate MEAs, I was really excited, because Plug is where they're actually doing things. I love working for Plug because we're actually doing things. And I hope when you took the tour last night, you got a chance to see that this is all a reality, as Andy says. We are actually putting things into production and we're putting them into high-volume production. And we've established a team that's capable of doing that. So it's really exciting to be here. So thank you very much for coming. I want to walk through the numbers now. This is a 155,000-square foot facility. It's also capable of producing over 2.5 gigawatts output, and that's conservative. I think that's really on the low end. I think there's a lot more that we can produce out of this building as we learn about economies of scale and really scale up the production material and move toward optimization and automation. We're able to make 7 million MEAs here. This year, we've made over 3 million MEAs, and we continue to ramp up by the end of -- or the middle of next year, it will be up around 7 million MEAs. We also have the ability to make over 2.5 -- about 2 -- a little over 2 million bipolar plates. If you're on the tour last night, you saw our revolutionary stamping process that allows us to stamp another plate every 2.5 seconds. So it's pretty impressive out there. And lastly, but not least, is we'll be able to make over 2,000 megawatts of electrolyzer in this facility over the next -- on an annual basis. In addition to that, we have a contract with New York Power Authority to bring green electricity from Niagara Falls here, and we turn that into green hydrogen through our electrolyzers. We have the ability also to make 60,000 fuel cell stacks for all the different applications that Andy talked about, all the way from 5 kilowatts up to 125 kilowatts.

So as Dan talked about, like we do feel the 2.5 gigawatts is a conservative...

It's very conservative.

So -- and we have them on record saying that now, which is good for Andy and myself. So Dan mentioned this, too, as we gain economies of scale, right, within the factories, we're really going to focus on how we transition from kind of starting up factories and really densify, automate and where it makes sense, and really just build a world-class manufacturing operation to improve quality, reduce costs and really ramp the facilities, right? So this facility, specifically that Dan has built, provides us with a template that we can mirror globally for as we expand. Because as Andy mentioned, the demand is there, and we're going to have to do it, right? So we want to maximize this, make this footprint as efficient as possible, copy this footprint with new technologies and like take it all over the world, which we're really excited about, right, Dan?

We definitely are. And I believe that the innovation center is our commitment to not only New York State, but to expand globally. We'll take this footprint and replicate it around the world with some of our various partners to be able to produce everywhere we want to go. I think...

Sorry. So it's really part of our broader company strategy to accelerate the development of the clean hydrogen ecosystem, right? So it's really important that we achieve this as quick as possible, not just for Plug, but as Andy mentioned for the planet. So we like to talk about how what we do here is important, right? So we really believe what we're doing here is important. And we believe that everyone here believes what we're doing is important. And we're not going to fail, not only because we have the right people in place, and we have a really smart team that's going to work their butts off to make it happen, but it's too important for us to fail, right? Like we're not just trying to do something to make Plug profitable, although that's going to happen, we're trying to do something to make a world a better place for generations after us.

Yes. And that's what brings us to work every day. We love this technology. We love where we're headed, and we love where Andy has taken the company, and we're really excited to get into high volume. That's the whole reason I was interested in joining Plug. I wanted to make high volume or reality. I think we're going to continue to add talented people. As Andy said, we have 275 employees here today in Rochester. And we're going to expand. I think we'll be at 375 next year around this time as we reach full production. So we're pretty excited about that. Hopefully, you got to meet some of those talented people last night when you took the tour to hear from them. They'll be available all day, so if you have additional questions, please let them know. I have some great subject matter experts who just love to talk about the technology. So please look them up and we can answer any questions you might have. And I guess that's...

Yes, talking to people on Dan's team is awesome because every time you leave the conversation you're like, wow, I'm not as smart as I thought I was. So like I highly encourage everybody to talk to people from Dan's team, especially the subject matter experts that were on the tour last night. So -- well, let me just talk about this one trying to get the clicker to work. So this isn't the only facility that we're building like in North America right now, right? We know Sanjay's standing at plants all over the place, but we have a second plant in New York that we broke ground on in March of this past year. So the progress that we've made just since March of 2022 to where we are today is pretty staggering. So what I'd like to do is introduce you to Chris Guenther, who's our VP of Automation and Manufacturing Engineering, as he tours the new facility in the Vista Industrial Park over up in Albany and Slingerlands, New York.

Good morning, good afternoon, good evening, wherever you may be in the world. I'm Chris Guenther, the Vice President of Manufacturing Engineering and Automation here at Plug. We're excited to show you all the progress we've made on the manufacturing facility here in Vista. We broke ground early in Q1 of this year, and so much work has been done. Let's take a look inside. So as you can see, there's been a lot of progress made here since ground's broken in Q1. A lot of exciting things happening every day and work continues until we're able move in. Matt, why don't you tell us a little bit more about this facility and what's going on here?

Sure. So it's a 47,000 square foot facility located in about 24 acres of land here at Vista Technology Park. The facility here is designed for manufacturing, remanufacturing of service as well as gives us the opportunity to bring in some stationary product manufacturing as well. Pretty large campus certainly allows us potential for future growth here. Material comes in the factory of the north end through receiving into warehousing, through subassembly and then flows down our manufacturing line, so we land in test and verification. And once we verified the product, we ship out to south end of the building here to customer sites.

Once operation starts up, what is it going to look like day-to-day out here?

Sure. So this will be a pretty busy factory. As we ramp, we'll be 5 shifts, 24/7 -- and in about 5 years, we project we'll be about 1,600 employees at this location.

Why don't we head down to the floor and take a look at a manufacturing line. Now that we've made it through warehousing and outside of the building, let's talk a little bit about the hydrogen infrastructure that will service their site.

Sure. So behind us here, we have one of our larger GenFuel installations. It's an 18,000 gallon liquid storage tank, cryo pumps, compressors, we actually have 2 skids in this installation along with the low-pressure and high-pressure vaporizers and storage tubes. That will serve both the manufacturing center for test as well as fill up our 4 trucks material handling equipment we use inside the building and service as well. Additionally, we have landed location for future backup stationary power that will help power this facility.

Great. It's good to hear. We're so excited you could join us today virtually for our tour to the Vista manufacturing facilities. I hope you can join us in person in the future. Dave, back to you.

So I'd like to point out that 7 months ago, that was dirt and grass. And you saw how much of that shell was built, and we're actually starting to -- we're starting validation and commissioning activities here in the next couple of weeks. And we'll be at full volume transitioning several of our products, if not most of our products, that are currently in the Latham manufacturing facility and that facility in Q1 of this year. So in less than a year, we'll transition from that facility to this facility as a greenfield build, right, at high volume. So -- as we continue to build out our infrastructure, both from a manufacturing standpoint and from a green hydrogen standpoint, we're adding jobs, we're adding capabilities, and we'll continue to add automation as we talk to densify our factories to make sure we're as competitive as possible globally.

So stay tuned for additional global manufacturing announcements in the future.

Yes. Thank you.

Thank you.

Good morning, everybody, and once again, welcome to our Gigafactory and Plug Symposium, all of you that are here in person as well as those of you who are actually joining us online here today. God, when we first did our symposium in 2019 and when we're doing it 4 years later, God, it is so exciting to see everything that has happened here, how far we've come along, everything we've done. And by the way, even the things we've told you, I believe, will actually exceeded some of those expectations. Now you've heard us say this many times before, and by the way, Andy, thank you for that kind introduction earlier. And look, what are we really trying to do? What is our mission at the heart of it all? We are trying to make hydrogen economical. We're trying to make hydrogen easy, and we're trying to make a big [ difference ]. And we are laser focused, by the way, in terms of execution, and that is going to allow us to become -- and we're very confident about it, we will make sure this happens, we are going to be the category king in this $10 trillion hydrogen economy. Now today, I am planning to provide you all I'm very much looking forward to forward to it, give you an update on our vertical integration, how that's all playing out. I will provide you all with an update as well on our build-out of the green hydrogen generation network, which is one of a kind, force-majeure resilient green hydrogen generation network that we're building in North America and expanding into the Europe. And I know this is near and dear to everybody's heart. I'm sure you all want to hear about what does that mean from a P&L standpoint, how are we going to make money, how are we going to generate cash flow. Yes, I will talk about that as well. And then finally, what does this Inflation Reduction Act mean for our green hydrogen generation business? How does that change our business? Why we believe it is absolutely a game changer for Plug and for the green hydrogen generation industry? Now with that, just real quick on the vertical integration. So as Andy talked about it earlier today, we've made several acquisitions, right? And the best part about what we have done here is now, there's not a single company in the world that can claim this. You want to buy world-class electrolyzer, you come to Plug. Ole will talk a lot more about it. You want to buy the world's most efficient liquefier, you come to Plug. And you'll hear from Danny on this a little bit in upcoming video here. And if you want to actually buy the best payload tanker on-site storage, you also come to Plug. And that's what the acquisition of Applied Cryo Tech is. And when you really think about it, we've now become a one-stop shop. And you know what the best part about this is? It's going to help us reduce the cost of our generation network, of our delivery network, but more importantly, customer does not have to change their buying pattern. If they're used to buying hydrogen, we will sell you hydrogen from our green hydrogen generation network. If you want to actually have a build-own-operate model, you want to generate hydrogen yourself, that's what you've been doing, more than happy to sell you all that equipment as well, right? So that's where the best thing for us is, one, it reduces the cost, it helps move the economy forward. And the best part is the customer ends up getting economical solution without having to change their buying pattern. With that, can we please play the video for what's happening in our Houston operation. [Presentation]

Again, after this video, so let's talk a bit more about our green hydrogen generation build out. So as all of you probably have heard from us that we are very, very laser-focused on getting our plant in Georgia commissioned by the end of this year. That is going to be the world's first green hydrogen, 15 tonne per day liquid plant. We already have a gaseous hydrogen plant there that we're actually starting to commission and fill some of the low-pressure tube trailer as well as high-pressure tube trailer. With that, why don't we go to the video of Georgia real quick here? [Presentation]

Now, as you just heard from the team, there's just a couple of points I just want to highlight here, the foundation that is being poured -- by the way, the liquefaction compressor, everything is already en route there, right? So it's not like we're waiting for this, or there's any supply chain impact that's going to end up having any challenges there. So we feel very, very good about really getting this plant commissioning before the year is over, we'll be ramping up thereafter. Now beyond that, I'm sure some of you saw the press release that we put out this morning. We have finalized our partnership with Olin. We've finalized the joint venture. That's going to be the next 15 tonne plant that we are going to be building in St. Gabriel, Louisiana. Now that is not a -- sort of that's not like our electrolyzer and liquefaction, that's a feed gas plant, but both parties are working together to make sure how do you drive CI score of that plant down to make sure that it is in line with other green hydrogen plants as well. Now beyond that, another thing we've been doing is we're also working in Tennessee where you all know that we have an existing running 10 tonne per day liquid hydrogen plant. We're actually expanding that to about 15 tonnes per day. We're adding another 5 tonnes of gaseous hydrogen there so that we can support near-term network dynamics, which still remains somewhat challenging, frankly, until some of our plants come online, so we can support a high-pressure tube trailer, we can really support all the force majeure and things like that, that goes on in the industry. Now that brings me to one point, which is, look, when you add all that up, that actually gets us to about 50 tonnes of commissioning this year. And I do recognize that, that is below the 70-tonne number that we've told you about. Well a couple of things I want to point out here. Number one, this is a very conscious decision on our part by the way because we want to be good steward of capital for you all because we had a [ path ] to do 20 tonnes per day of gaseous hydrogen but we explore that, looked into it and it made all the sense in the world to abandon that gaseous hydrogen plant and do the liquid plant in those location. We want to make sure that we're being really, really prudent with our capital allocation as we're building this network and not just necessarily focus on 50 versus 70 as a number. Now beyond that, we actually have had some permitting delays with our 45-tonne plant in New York. Substation permit finally got received in September of this year that really delayed that project by 12 month but that's going to be in full steam ahead. And also consciously, we abandoned 2 projects, by the way. These are infrastructure project guys. We want to make sure that we're being very thoughtful about how we build them, how we spend money on them, how are we thinking about return on our capital and return on our shareholders' capital. That's very important. So we also did not pursue those two 30 tonnes per day opportunity, one in Canada as well as one in Pennsylvania. Now the next one here is basically, despite all this, I do want to remind everybody that we are absolutely on track to be commissioning 200 tonnes per day by year end 2023. Now before I go into some of the details on that, why don't we do a quick video on what's happening in gateway. This is not necessarily my favorite part because I get to see myself on 2 places, I found that a bit odd and [ it by the but, ] but that is one of my favorite part of the job right now, going on sites and really seeing what's happening. It's so fascinating. It's kind of like your baby is growing and all the things are happening. So with that let's do a quick video roll on New York. [Presentation]

All right it's good thing I'm back on, on the stage instead of the screen. But just a couple of points if I may highlight. It's very -- it's really a reminiscence of sort of the Industrial Revolution when you think about this plant in New York. As we lit up the city of Buffalo and transition from kerosene to electricity, that's what we're trying to do here by going from diesel to green hydrogen, again, leveraging that hydropower from Niagara Falls some 100 years later. It's so fascinating when you think about it from that perspective. Now how do you get to our 200 tonnes a day? Well, first up, we're going to expand our plant here in New York, the one that you just saw in the video, to 75 tonnes per day. We have the land. We have the design. We actually have the substation, and we actually have had a dialogue with Nipa in terms of getting more power feeding into that substation that we're building in partnership with them in National Grid. Second, we are actually building 45 tonnes per day plant in Texas. And that plant is actually -- we're breaking ground this quarter. All the permits are in place. We actually have all the long lead time items that we've already placed in order as well. And that is going to be our 45 tonne per day plant supported by renewable electricity. And this is going to be backed by 345-megawatt of wind farm that is actually about to get completed in that location. Now another plant that we're going to be expanding is in Georgia. We have an option to expand Georgia from 15 tonnes to as much as 45 tonnes per day. There is land there. There is power availability, which we have already gone through the system impact study. Now the only thing that we're trying to think about is do you want to optimize it to 30 tonnes a day, or do you want to actually take it all the way to 45 tonnes per day? Now the next plant, we are going to expand Tennessee from 15 tonnes to 25 tonnes per day. So when you then take all that in consideration, as we're exiting 2023 and into 2024, we are going to be the world's largest liquid hydrogen generation company. No questions asked. And let me take you one step further. Not just that. As you think about 2025, we're actually going to be almost 2x -- actually, more than 2x bigger than the second largest company in terms of liquid hydrogen generation capacity. And another thing that we're doing is we're not going to stop there. If anything, we're going to want to pull that in, given everything that's going on in the market. We want to accelerate that substantially beyond 2025, and I'll talk about that somewhere a little bit later here today. Now with all these learnings, everything we've done, we're also taking this into Europe. We're actually working with a lot of different partners. And as Andy mentioned, Benjamin will talk a lot more about it later in the day today. But we are looking to have about 100 tonnes of generation capacity in Europe some time by 2026, again, making us a major, major player in that market on our journey to get to that 1,000 tonnes per day by 2028. Now what does this all mean, right? From a sustainable competitive advantage standpoint, first-mover advantage standpoint, folks what we're doing here, frankly speaking, is not an easy thing to do. It's very difficult. It's hard, and nobody has done it before. And we're trying to do this at the speed and scale that has never been done before either. So when you really put that into context, we believe that our first-mover advantage things we have learned, how do you scale electrolyzer? Ole will talk a lot more about it again later today. How do you really think about optimizing the system design, the gas coming out of the electrolyzer, going into the liquefaction? How do you think about optimizing that? What is the best way to source water? How do you think about that? Can you get wastewater? How do you optimize the sourcing of that water in various different locations so that you can optimize and maximize that with where the right sun resources, where the right wind resources and how do you really think about that. So some of the things that we're doing are things other folks probably haven't been thought about, frankly, as they go in this journey of building some of these plants. So we believe these are going to be a major competitive advantage for us going forward. Other things. Look, we're doing this in a time when labor prices are up. Commodity prices are up. We have had to deal with some major supply chain issue in the electrical infrastructure space. For example, the substation that I just talked about, right? So all these things we're doing it and our focus and our strategy is somewhat simple: You got to stay nimble. You got to work with the right partners. You got to stay focused and keep on executing in terms of doing what we're doing. Now the next topic -- so I think all of you have heard about it. So let me give you a little preview on how are we thinking about the Inflation Reduction Act. And I know there's a panel here later today. You'll actually get to hear a lot more about all the nuances behind it as well. But the most important thing of this Inflation Reduction Act, in our opinion is, it's a game changer. What it does is it makes green hydrogen economical versus every single form of gray hydrogen in the market today, period. It will make green hydrogen economical in refining. It will make green hydrogen economical in green ammonia, both for domestic consumption as well as potentially for export. It makes green hydrogen economical in methanol industry. That is already a 25,000 tonnes per day opportunity. Now with this PTC, another thing you will also get is it improves the total cost of ownership for all of our applications: Stationary power, mobility power, which Jose will obviously talk quite a bit about it later today. So in summary, right, I mean I think this is a transformational type of event for the industry where the demand for green hydrogen is probably going to be so much larger that the industry likely remains somewhat supply constrained and that's why we are doing what we're doing here. And by the way, don't forget, if we want to transition Class 7 and Class 8 diesel truck into green hydrogen, that is an incremental demand of 200,000 tonnes per day. Numbers are big and we're just getting started, and we're going to continue to accelerate what we're doing here. Now let's talk about some numbers here. First off, what does it mean for the payback of our green hydrogen plant? You've heard us say this before. In the beginning, some of the first plant, the payback is between 8 to 10 years. That's what we've told you. In some cases, that number could be as high as 12 in the beginning, 8 to 12 years, given the world we're in. But with the passes of the production tax credit for green hydrogen, that payback will improve by at least 4 to 5 years. Meaningful benefit to the [ IRR ] of this plant. Second thing that is actually even transformational for the green hydrogen industry and hydrogen economy as a whole is you're going to see major capital formation here. And I know we have a panel here later today about that. So some of you already know, solar and wind industry is 20% equity capital, right? Instead of being 100% equity capital funded project, what we're doing today is we're basically funding these hydrogen plants because we said, you have got to get hydrogen right. You've got to get it done, and we're going to take charge to do that. So we've been funding these plants with 100% capital, 100% of our own equity capital. But with PTC, as some of these plants come online, what we think happens is you will at least get 4x to 5x multiplier effect on that equity capital. As you see the capital stack change from 100% equity, maybe down to 40% at first, probably 30% again and down to 20%, and this will follow a very similar pattern that you all saw in the solar and wind industry in the last decade. So the capital that we have allocated to build a green hydrogen network, we can probably use that money and do 4x to 5x more than, frankly, even what we've talked about before. Now it'll be a miss if I don't touch on how does the energy landscape evolve and change in light of everything that's going on. So some of the things we've been working on, somewhat behind the scene if I may put it like that, we have been working on a very large integrated renewable and green hydrogen plants. How do you think about hydrogen plants that are not even 75 tonnes a day, 100 tonnes a day, but the plants that are going to be in 1,000 tonnes per day? We've got a lot of effort going on in dedicated hydrogen pipeline and working with a lot of different partners on that front. We have a lot of work going on in long-duration hydrogen storage, salt cavern. We've got a lot of work going on in that area as well. And as you really think about this long-distance dedicated hydrogen pipeline with mega hydrogen sites, what you're going to see is you're actually going to be able to move low-cost renewable generation from the point of generation to demand center. That will help stabilize the electric grid. And then all of a sudden, you'll see hydrogen become that solution, like Andy called it, a Swiss Knife that is not going to only decarbonize transportation or industrial application, but it can also decarbonize our electric grid as we think about the whole climate solution going forward. Now as I said, I will tell you all about numbers as well. So coming to the numbers, in 2023, with our merchant fuel as well as our cryogenic equipment business, we're looking at revenue of about $285 million. We expect that revenue to get an approach almost $4 billion as you start to think about 2030. But here is I think the best part, I hope you all will like. Based on what we're doing, the build-out of our green hydrogen plant, even with some of the existing industrial gas contracts, we are expecting to exit 2023 with an operating breakeven performance in our fuel business. That's been a drag for us for a very long time, as many of you know, but that's what we believe is going to happen as we exit 2023. And I think that's going to be a big, big shift in our P&L profile for all of you as you look the numbers into exiting '23 as well as in 2024. Now finally, on the overall numbers, we're looking at mid-20% kind of a gross margin for our merchant fuel as well as cryogenic business in 2023, but that number will be well above 30% beyond that as we continue to bring these plants online, and I'm sure Paul will talk a lot more of that as well today. So look, just to wrap it up, right? Green hydrogen is here today. We're doing everything we can, and we'll continue to do that to make sure that we are going to be the category king in this industry. We believe that all of the learnings we've had today, our unique industry positioning and frankly, the balance sheet that we have allows us to execute on our path to becoming a major energy company here in the next years to come. And with that, I thank you all for your time. And before I leave the stage, it is my utmost pleasure to introduce my friend, Ole Hoefelmann, who's going to talk a lot about all the amazing things we got going on in our electrolyzer business. Thank you, everybody.

Hello, everybody. Good morning, good afternoon. I'm super excited to be here with you in Rochester, and also welcome everybody that's connecting to us online today. I was at one of the first symposiums 4 years ago as a guest speaker. And as Andy already alluded to earlier, and thanks for the comment, I joined Plug about 1.5 years ago. And what I shared with you 1.5 years ago was, as Andy said, a team there was about 20 people, and we grew excitedly over the last 18 months. So -- what I'm going to discuss with you a little bit is the progress that we've made. We had a lot of slides that showed you some designs, and I will show you that we're all about actually getting things done. So when I was at the symposium last year, I explained to you that we had a PEM electrolyzer stack that we acquired, which was the Giner ELX technology, as Andy referred to as the world's best. And I shared with you some of the designs, some of the things that we're thinking of developing. And really what we're all about is developing safe, reliable solutions for our customers. And here, you have the different setups of the 1-megawatt, the 5-megawatt and the 10-megawatt array. And our plan and really what we executed over the last few months is to develop infrastructure that allows us to deliver those things globally with skill sets that we acquired over the last year. When you look at the structure that we put in place, Andy and I last year met with the various customers to understand what their shortcomings were, what they were expecting from the electrolyzer business. And we understood that the technology itself, the electrolyzer as a stack was not the issue, what people were looking for is companies that could be able to deliver world-scale solutions. And at that time, what we ended up doing is we acquired a company called Frames. I think what's important to understand is Frames is a process and systems integrator. This is a company that knows how to build solutions for the oil and gas industry. And what we ended up doing is acquiring them, bringing them in and being able to set up our best solutions. What is important is that the Frames organization has the skill set to develop products onshore and offshore. And what I wanted to show with you here is some of the -- sorry, guys, I'm having a bit of a structure here -- what I wanted to show with you here is that with the Frames organization, we acquired a company that has a great skill set that allows us to build our electrolyzer without its scale. What you see out front is a 5-megawatt module that we discussed earlier with Sanjay. This is a -- sorry, I'm having a hard time here. I apologize. Let me take a quick break. So what we've done as a team is we've developed a 5-megawatt module, that is the basis that we use for our facility in Georgia. This is a facility that -- sorry, let me back up. So we've built a 5-megawatt module that we developed for our Georgia facility. Okay. So again, I apologize. I'm having a bit of hard time today. The -- let me back up. So the team that we've structured as a team that allows us to build the 1-megawatt solutions that we have around the world. I think what's extremely important to see here is that we, last year, showed you a design of something that was a drawing. And today, what you see here is something that we've actually built and that we're getting ready to deliver at our test facility in the Netherlands. We've also built 5 megawatts in closed system. This is super exciting. What we've done here is we've developed 5-megawatt in closed systems that we've delivered at our customer site in Egypt. In order for us to be super successful, what we need to do is we need to have a fabricator network, the ability to be able to build electrolyzers around the world. What we've done is through the acquisition of the Frames organization, being able to build the fabricator network that we've established around the world. And what you see here is the different locations already displayed. When you go and think about building an electrolyzer solution, what's extremely important is that you don't only think about containerized in a closed systems, but you also start thinking about being able to build plants. What we've been able to do here, and this is something that we do with our engineering partners, we're able to go to our customers and talk to our customers about the plant solution that they want to have to develop. What's extremely important is understanding the customers' process, understanding how you integrate with the customers' process and how you're able to then provide a solution that addresses the customers' need in the end. What you see here is a design up above of about 100-megawatt facility with our 10-megawatt array that you see on the bottom right. What I'm super excited to share with you is that we've done one of the world's first. So again, I apologize, I was stumbling a little bit earlier. But in the end, it was extremely important this to explain to you that we have a PEM technology. And we have, at this point, also been able to build the skill sets to build electrolyzer units. What we've recently done is we've actually built the world's first electrolyzer offshore. This is super exciting. If you think about it, what you're doing here is you have an electrolyzer that is on a platform. So instead of having electrolyzer sitting on the ground, it is on a platform. And it needs to be able to tilt 15 to 18 degrees, and it needs to be able to overcome the elements. So think about a platform in the middle of the ocean, you have waves coming over that are 3x as high as the platform itself. What we've done here is with our partner, Lhyfe, we have created an electrolyzer that is sitting on a platform that's connected to a wind farm and is in the middle of the ocean. Again, this is super exciting and really important to think about it. With the skill sets that we've acquired on the Frames organization, they've understood how to do offshore. They've been working in offshore for years. And so what that allowed them to do is, in the end, develop this solution here that's really the world's first. What's important and is something that Andy alluded to earlier, when you think about energy and you think about energy transition, what is common here is that you have different countries, different locations around the world that are thinking about doing offshore. What's extremely important there is when you put the offshore further out, bringing the electricity in through cables is not the most convenient way to do it and not the most cost competitive. So what our solution allows us to do, and this is what we're working with customers today that do platforms, that do FPSOs already, what that allows us to do is produce the hydrogen on the ocean offsite and then bring the -- transport the energy through the hydrogen onshore. Here you see some of the depictions of some of the announcements around the world of offshore electricity. And we have one project that we're already working on in Denmark today, which is super exciting. So again, when you think about the future and you think about the growth that we're trying to achieve, having the ability to do the offshore electricity and bring it in with the electrolyzer is really a great opportunity for us. And we have the skill sets to develop that with our customers. Andy alluded earlier to the fact that we have about a 1.5 gigawatt backlog. And I think what I wanted to show you here is that and it's important also to the point that Sanjay was making earlier, when you look at this we're looking at different markets. When I originally got into this business about 7 or 8 years ago, it was all about mobility. And really, there was, by the way, you need green hydrogen. How do you get green hydrogen and by the way, when do you get it to be competitive? What this allows us to do the different markets that we have allows us to go ahead and scale up faster. So when you look at the portfolio that we have today and the customers we're working with, you'll see we have customers in ammonia, gas blending, e-fuel, biofuels and obviously, the mobility. So what that allows us to do is obviously scale the solution a lot quicker. We did recently announce a partnership with New Fortress Energy. What I wanted to show here, you, real quick is we're working with them on a 120-megawatt facility down in Texas. It's hydrogen that they're going to use for industrial applications. And I think the collaboration with them has been really, really good. And also the work that we've been doing with one of the EPCs to in the end design a big facility. So what you see over here is the design of what the facility would look like. And what I wanted to show you here again is we have the 10-megawatt array that I shared with you last year. And then here is actually where we're fabricating those arrays today. Again, we're making progress, and we're working with New Fortress Energy on this application, which is, again, green hydrogen that they're going to use for industrial applications to existing customers that they have today. I also wanted to take a quick moment to thank the customers and the partners that we work with. So here are the projects that we have around the world. As you see down below is kind of the solutions again that I shared with you earlier. I think what's important to note is we're pushing the, I would say, at a speed pretty quickly, we're going very fast. And we have customers and partners that have the same pioneering experience that we have that are excited to work with us. And I do want to thank them because they're putting a lot of trust into us and working with us to help us accelerate the development of our solutions. Andy alluded to the fact that we have a sales funnel that's about $25 billion, which is really super exciting to us. I think, again, the important message on the $25 billion on the electrolyzer side is when you look at the mix that we have today, half of the revenue that the funnel has is around ammonia. And the other coupons that you look at around, methanol and fuels, right? So what that allows us to is get into the scale faster and allows us to accelerate into the market a lot quicker. What's also important for us is to have the skill sets to work with our customers to understand those solutions for those markets, and that is an important value that we bring to our customers, being able to understand what their process is and how our green hydrogen fits into that. The -- sorry, go back -- what was also important, and I shared this with you last -- at the last symposium is that we wanted to ensure that we have competitive solution. And in the end, that we're driving down the total cost of ownership for our customers. We continue to work on that. So we do that in several ways. One is, obviously, we have the expertise to work on the balance of the plant. We have the expertise that allows us to reduce the cost of the systems as we build things at scale. We also have the expertise to change our design, to adapt, to look at what is competitively already out there from the oil and gas and some of the larger industries and then backwards integrate into how we tie that into an electrolyzer. The other thing that we're doing that's important is we continue to improve the performance of our stack. We continue to work on making the stacks. You saw the MEAs yesterday. We're looking at making them thinner. We're looking at adding more cells to the stack that we have. So we're trying to continue to work on -- and what we're executing on is being able to do more hydrogen production at a lower cost for our customers. And that continues to be a key driver for us. I wanted to share also a revenue slide here with you. We have a strong ambition for the electrolyzer business. Our objective by 2026 is to have a revenue of close to $1.45 billion and an installed capacity of a little over 3.5 gigawatts. That's in line with what we shared with you already last year. And our ambition for 2030 is an installed capacity of 20 gigawatt with a revenue target of $7.3 billion. So again, a lot of ambition, Andy shared with you earlier, we have the sales funnel of about $25 billion. Not everything necessarily is obviously going to materialize, but it certainly is an indicator of where we can go and that we'll be able to execute on that. I talked about last year, about concepts. I showed you kind of designs and I kind of hopefully prove to you that we have the designs and we know what we're doing, although I wasn't really sure at the beginning when I started this presentation that I was going to take that across. So I hopefully that change to get a little better. But what we have done, and I think this is important, we're working with, in this case, McDermott to do a concept design for 1-gigawatt facility. I think what's extremely important again is to continue to think about scaling up. It's continue to think about the future, continue to think about modularity, standardization. And I'm going to show you a little video here. Again, the key thing is you'll see good concepts, good designs. I expect that they'll be different next time I am up here and share this with you. But what's important is that we are continuing to think big and that we continue to work with customers to scale up. So why don't we go ahead and start the video, please? [Presentation]

So again, the work that we're doing there is super exciting, right? So when you kind of go back, we have a foundational brick, which is the 1-megawatt stack. We have that stack that we're integrating into a 1-megawatt containerized solution, a 5-megawatt enclosed solution. The 5-megawatt module that Sanjay talked about for the Georgia facility, which you've seen earlier on the parking lot outside. And then obviously, our 10-megawatt array. And the design that we then have with McDermott is all about scale, right? It's about scaling up and being able to go all the way to 1 gigawatt and beyond. So again, I'm super excited by what we're doing and what we've accomplished so far. I'm leaving you with kind of the photo here, which is, again, one of the world's first, which is the electrolyzer that is offshore. We're going to continue to work on making hydrogen easy, cost competitive and ubiquitous. And thank you for your time. So I'm introducing Jose.

Thank you. Hello, everyone. My name is Jose Luis Crespo, I am the General Manager for the Applications business unit of Plug. Thank you for coming to our fourth symposium. It's incredible that we are already on our fourth symposium. Today, you have heard from Ole and Sanjay about the incredible things they are doing to create, generate green hydrogen that is economical, is easy and is ubiquitous. So what I'm going to be talking today about is about applications that actually our customers can adopt to make use of this hydrogen and make their operations decarbonize and achieve their goals on sustainability and -- their sustainability goals. Let me start with our material handling business. In our material handling business, we continue to provide value to our customers with their productivity, as we always do, but also more than ever next year in 2023 with our green hydrogen and sustainability as well. This value is what has enabled us to grow in the year 2021 more than 40%. Now we're starting to reach a positive value proposition in a smaller size, around 54 [indiscernible] or so. And we are doing this by providing our customers with hydrogen infrastructure that is tailored for those type of sites. And in 2023, we will do that as well by providing our customers with green hydrogen that also is economical. This is going to allow us to double our addressable market and it's going to propel our growth in the industry for the next few years. Now when we talk about Material Handling, everybody questions -- the main question that you have is what's happening with pedestal customers? Well, instead of waiting for the question, today, I'm going to be talking about it during the presentation. Here, we have the impressive list of pedestal customers that we already have today. Now in the next slide, I'm going to show you the customers that we're working with that are already signed or we have high confidence that they will sign as pedestal customers. Grainger. Grainger is a Fortune 500 company in the industrial supply business. We have an MSA with Grainger, and we are already working in several sites in 2022 already in engineering and permitting for those sites. In Europe, we have been working for a few years. And finally, we are looking at 2 big players in Europe, Lidl and Asda, 2 of the biggest retailers in Europe, and you will be hearing from them a little later in the presentation. And it'll be quite exciting. You'll see. Now today, we have here FreezPak. FreezPak is going to be talking to us about why fuel cells are the right solution for freezer applications. And also, they're going to be talking to us about why they have closed with us a deal for 9 sites, 5 of which will happen in 2023. So help me welcome to the stage, Dave Saoud and Mike Saoud, who are the owners and the co-founders and co-CEOs of FreezPak. Come to the stage. You want to roll the video or should I roll the video? There you go. All right. Mike and Dave, Thank you so much for joining us. And especially thank you for the journey that we have gone together. Since 2015, we've been working together. You have grown a lot, so have we. So why don't you tell us a little bit about your business, so everybody understands what you do.

So in 2001, we started our operations, providing cold storage in a small 20,000 cubic foot, 800 pallet freezer. Today, we are the leading family-owned third-party food logistics company and real estate developer of cold storage. By the end of the year, we will have 65 million cubic feet and 315,000 pallet positions of cold storage in operation. We have 4 facilities under construction and our real estate company, BGFP International, is planning to build another 15 facilities by 2030.

And the 40 that we have are already on fuel cells, right?

Yes.

That's good. So tell us about your growth. How is the company growing?

So we're building all this infrastructure to support the frozen food industry and our customers. In 2021, the frozen food category did $253 billion in sales. It is expected to grow up to $380 billion by 2030. The #1 thing that sets us apart from our competitors is high-quality service. Since a good portion of our business is logistics, we're able to provide a one-stop shop solution.

Wonderful. So on that growth and capturing that market and helping you to get to the point that you are today, how do you think fuel cells have helped you?

So FreezPak made the decision in 2014, as you were alluding to before, the hydrogen fuel cells was -- we made a decision that hydrogen fuel cells was going to change our business. That vision has paid off. FreezPak has committed to expand this relationship across the U.S. with Plug fuel cells and hydrogen plant infrastructure. In total, Plug will support 11 sites around the U.S. and including 3 sites that are currently in operations.

I remember when we started, I would like a very small operation on one site. Yes, that's -- it has been an exciting journey. So -- what are -- what do you think the value proposition? Or can you explain to the team, how do you extract value from fuel sales in your operations?

When we saw it back in Newark Farmers market, we -- my brother and I have looked at each other and we're like, we need this thing tomorrow. We have gained a productivity boost of 100%. It's really amazing to see a forklift get charged in 90 seconds as opposed to charging a lead acid battery takes 8 hours to do that. This is why immediately, we're like we need this right away. We've saved about 31.5% of electricity cost. And as a result, reduced greenhouse gas emissions. On average, we gained about, per facility, 5,000 to 10,000 square feet of warehouse space that was once used to store those lead acid batteries. Our real estate costs about 3x the amount of a dry warehouse. So every inch of that warehouse is very expensive. And to gain back that space is a huge driver for having Plug's fuel cell infrastructure.

Absolutely. How about -- how do batteries behaving freezer applications? Because I don't know if everybody can see here, but those guys over there working in their factory in their warehouses are wearing all these jackets and all that. Because this is actually a complete building that is a freezer. So batteries in freezers, how do they behave?

I mean, we tested our batteries for years. The first year that we have them, they almost go to waste. We have a problem. They never keep their charge. The warehouse operators don't take care of them. So for us, it was a huge thing to have when that forklift drives 7 miles per hour from start to finish as a battery as the draw comes down, the fork truck goes at 4 miles an hour. Every second counts in our business to provide service that we provide to our customers, to have that speed to market for us, that's a huge, huge thing for FreezPak.

Yes. So how about the new buildings that we just signed up? Can you tell us a little bit more about them? Is there something you want to share?

So the sites we're building have a larger footprint and our taller than ever before. Since we have such a heavy power requirement for these buildings because of the cold storage application, having the ability not to bring additional power in for chargers is huge for us. Because of that, Plug will continue to be a part of our building requirement going forward. As you alluded to, more sites, so it's really exciting for us.

Perfect. And what about next -- what's next for FreezPak? What are you thinking?

So getting our customers -- getting our customers' product speed to market has always been our first priority. Services are first and foremost, the most important. And we have proven ourselves as a 3PL provider. Our customers are calling on us to build around the country to support their growth. And this will mean more sites and more hydrogen infrastructure to come in the future.

Yes, more sites. I like that.

Yes. So do we.

Yes. So as you said before, you have designed your new buildings with fuel cells for material handling in mind. Would you ever go back to batteries?

So this is actually my favorite question. Since I take care of most of the operations, as my brother alluded to before, I went to go see your products in 2014, and I couldn't believe that an operator can pull up to a station and be ready to go in 90 seconds. I was astonished. I called my brother up and I was like, Dave, I don't care what this cost, we are buying it. And we were at that point in our career where we had to go 3 shifts. And my dad was like, "no, you can't do that. How are you going to do that?" And I was like, we're going to do it, and we're going to be successful at it. And having the Plug solution was amazing. And we did the first deal. Andy got on the phone and helped us get this done because honestly, we're a small company and we're putting $2 million of investment into your product. And we didn't know if it was going to work. And it was tough the first year, but Plug always stepped up to the plate. And it was there for us and still is, and I know that we're confident that 9 sites will be a blink of an eye for you. And I feel like getting out of battery jail, you really got us out of a battery jail. So we're so excited to be a part of the change in energy shift to hydrogen, and I feel like we're part of it, and it's really exciting for us. And I feel like we're doing something great for our future and our children. So we really love to be a part of it.

You are. So thank you so much, Dave and Mike. It's always a pleasure having you any time you want. And thank you so much for talking to us.

Thank you for having us.

Thank you. Okay. So in Europe, I'm going to now shift a little bit to Europe. The value proposition for Material Handling is beginning to make much more sense than a few years ago. The main reason is when you think about the environment -- the energy environment that Europe is living on right now, and also the interest that many authorities are putting into hydrogen to become one of the main vectors in the energy transition. So in that environment, we've been talking for a few years with several companies, but now we've been talking to 2 of the largest retailers in the European market, one of them is Lidl. With Lidl, we started a project return on a site in April of this year. The results have been excellent. The feedback from their operations team have been really, really good. And we are, right now, at the moment, talking to them about several sites in 2023 and 2024. Just as a reminder, Lidl has 13,000 stores and operates in 30 countries in Europe and also operates here in the U.S. So the opportunity with Lidl is pretty large. So I'm going to roll the video, so you can hear about the Lidl experience. [Presentation]

So you hear it there. They are looking at more sites. And then adding to that tracks for deliveries. And we're going to be there with them. I can assure you that. Now likewise with Lidl, we started a project with them at the end of 2020. The project went really well. We've been testing the technology with them. We've been trying the technology with them for the last few months. And the results have also been quite good. Lidl -- sorry, Asda is one of the largest retailers in the U.K. And you're going to hear today from Frances, who is the Material Handling and Innovations Manager at Asda about how the technology has improved their processes as well as what are the plans for the future. So let's roll the video for Asda. [Presentation]

Well thank you, Frances. And as you heard, Frances is talking about converting 30% of their distribution centers in the U.K. to hydrogen. 30% to start or going to be set to go farther than 30%. So now we're going to be talking about our next major application for fuel cells, which is stationary. We talked about the stationary a little bit before. In the stationary market, we are deploying systems in different applications, backup power generation, you'll hear a little bit more about it from Microsoft; green power for EV recharging stations, that's an interesting one, I'll talk to you a little bit about that one; and then finally, we are also doing prime power utility scale. This is something that we are doing with our partner, SK in Korea. So I want to start for a second here on this application because this is an interesting one, and it was an unexpected application for our solutions. Many of our customers that have decided to go into EV fleets, battery EV fleets, I should say. They are discovering that once they start going into their parking lots into the depots, the areas where they have their EV vehicles, battery EV vehicles, they try to get the electricity to power those vehicles. Once they go over 50 -- visit goes 100 to 150 vehicles, the power to get for those sites is really difficult to obtain. It's either time difficult or it's very costly. So what they're asking us to do is they're asking us to bring a power generator, which is what you see here on the right is basically a fuel cell that is 1 megawatt to 5 megawatts that actually converts hydrogen into electricity that we've been discussing before. And then with that power that is generated by that fuel cell large scalizationy system, then we power the battery EV station. So this is an unexpected opportunity for us. And at the beginning, we were a little bit skeptical about it, but we're getting more and more customers to actually tell us that the grid really is not ready to provide all this electricity, especially in certain sites where you have high density and they need alternative solutions. And those solutions have to be green because otherwise, there's no point of having battery EVs. So there you have this application, and we are expecting this application next year to be one of the largest applications for stationery. Now when you put all those opportunities together, we have an opportunity here. We calculated an opportunity here of $350 billion alone in the U.S. If you look at it at a global level, the opportunity can reach up to $2 trillion. So this is why we were talking about this application specifically being a unicorn for Plug. Now companies like Microsoft have already announced publicly that they are moving away from diesel generators. And as you know, we did a test with Microsoft for a 3-megawatt power generator for data center backup. That trial or that test was described by Microsoft as a Moon-landing moment for the data center industry. That was not dramatic, right? And also described as mind-blowing that we have a generator of this size that actually has 0 emissions. Darin and Scott from Plug sat down with Mark Monroe from Microsoft to talk to us about what is the importance of this development in the data center industry. So let's roll the discussion. [Presentation]

We are also excited for the possibilities going forward. And it's great to have partners like Microsoft working with us on that. And actually, I was joking before about the being dramatic, but it's really mind-blowing what the team has done in this application, and it's going to be the big application coming forward. Now I'm going to go back -- I'm going to go into talking a little bit about an on-road activities, mainly our own road activities with HYVIA in Europe. And they asked me to be a little bit provocative on this segment, and I'm going to leave you with a thought before I start talking with -- about HYVIA. Just think about -- some people question about fuel cells being the right solution for these type of applications like commercial duty vehicles and vehicles in general. Take a moment to think about how battery EVs, battery electric vehicles, we have fared in the unfortunate situation that we saw in Florida with Hurricane Ian, a couple of weeks ago. Think about having a battery EV and being in that situation and how before and after, you will be fair in terms of being able to regain your mobility. So with that, HYVIA. Only 1 year after we presented the first prototype, we are now having production vehicles being built in Europe and ready to go on the road in Europe. But not only that, all these customers here have shown interest, and they will do pilots in the next few months with HYVIA. HYVIA is going to have capabilities to produce more than 800 vehicles next year, and we are pretty confident that we will have homes for all those vehicles with these customers and more to come. In the last week, I went to -- not last week -- it was a couple of weeks ago. I went to Flins to the factory in [ Kariya ] in Europe. And I went with one of our largest global customers. We tested the van and only from my opinion, was a really cool thing to do and pretty exciting, but the customer was also extremely excited. That customer is ready now to do pilots as well, and it's not one of the customers that you're seeing here. So you'll hear more about that in the near future. Also, HYVIA was at the Paris Auto Show this week, and we have a video to show you a little bit more about HYVIA and how the basalt to show when. So let's roll the video. [Presentation]

Quite exciting. So when we install the first application with our customers, in general, right now is material handling. Customers start looking at hydrogen as a key element on their energy strategy. And they start asking us for more and more applications to complement that strategy and to start using more and more green hydrogen to decarbonize their operations and attain their sustainability goals. One of those companies is Amazon. As you know, we signed with them a 30-tonne per day green hydrogen agreement in the summer. And now we are full steam working on getting applications around the material handling, which was the first one to be able to use those 3 tonnes and beyond. And believe me, and beyond. We're going to have today Dean Fullerton, who is the VP of Engineering Operations who has more than 30,000 people working for him talking to us about those applications and the plans for hydrogen within Amazon. So let's roll the video.

Thank you for the introduction. Hello, everyone. I'm happy to join you from Seattle to speak about our partnership with Plug Power, and how green hydrogen can help Amazon meet our sustainability goals. Three years ago, Amazon cofounded The Climate Pledge, a commitment to reach net zero carbon across our operations by 2040, 10 years ahead of the Paris Climate Agreement. Decarbonizing our transportation operations network is key to us reaching this commitment. Amazon continues to invest in a range of technologies because no single solution can fully close the emissions gap. This includes electric vehicles as well as alternative fuels such as green hydrogen to eliminate the use of fossil fuels. Currently, over 95% of the supply of hydrogen is made from fossil fuels. However, when produced using renewable electricity, hydrogen becomes a promising way to decarbonize industries, not amenable to electrification, like aviation, steel production, heavy-duty trucking and cargo shipping. This summer, Amazon signed an agreement with Plug Power to supply almost 11,000 tonnes per year of green hydrogen starting in 2025. This is enough fuel to power 30,000 forklifts or 800 heavy-duty trucks annually. Amazon is proud to be an early adopter of green hydrogen, and my team and I are excited to begin using the green hydrogen supplied by Plug Power in different parts of our operations. We already have more than 70 fulfillment centers outfitted with hydrogen storage and dispensing systems, allowing us to start using green hydrogen to replace fossil fuels. And by 2025, we plan to have 20,000 fuel cell forklifts across 100 fulfillment centers. And that's just the beginning. Across Amazon's operations, we're exploring and testing the use of other hydrogen applications, such as hydrogen-powered trucks and vans in our middle mile and last mile fleet. Freight transportation is a difficult part of the logistics industry to decarbonize. It presents unique challenges to electrification given the cargo size and long distance has traveled. We're also looking into fuel cell power generation stations as a way to provide electricity to our Amazon buildings. We are relentless in our pursuit to meet our climate pledge commitment to be net zero by 2040. And we believe that scaling the supply and demand of green hydrogen, such as through this agreement with Plug Power, will play a key role in helping us achieve our goals. Thank you for your time today.

No, thank you. You just heard that, right? Material Handling is just the beginning. After that, we're looking at transportation, mile and -- last mile. And we're looking at the stationary for power and buildings. So exciting things to come on the Amazon front. Now today, I give you a summary or a review of where we are with our material handling business. You heard from Lidl, you heard from Asda, and you heard from FreezPak on how they extract value from our applications and our solutions. It is incredible to have customers tell us how they actually extract value from fuel cells. And it's really exciting to see how the growth of fuel cells is going to happen in the next -- well, in the next few months. I talked to you about stationary and about the incredible opportunity, $350 billion opportunity only in the U.S. And I've talked to you about on-road and what we're doing with HYVIA in Europe, all of that very exciting. I hope that, that also excited you about the great opportunities that we have for applications and for green hydrogen with Plug. And now with that, I think we are going to go to a 15-minute break. So please be back in 15 minutes, so we can continue with the show. Thank you. [Break]

So I guess we're back. Still, we're back. So we're going to have an interesting panel discussion here. I wasn't supposed to be on this panel, but my head of Europe decided he was going to have a baby in the coming weeks and decided he wouldn't show up. So I have to sit in for him, so I hope I do a decent enough job. But even if I don't, I'm sitting up here with 2 of our great employees: Preeti Pande, who runs our marketing organization. She's going to quiz my good friend here, Erin Lane, who I've worked with for 15 years on government relations, who's our VP of Government Relations and really was deeply involved in all the activity with the Inflation Reduction Act. So on that note, Preeti, I'm going to turn it over to you to ask us some questions.

Sure. So we're here to talk about the unfolding hydrogen economy. Welcome to a discussion, those of you here with us at this gigafactory, as well as our extended Plug community. We have a few thousand people joining us online live. So decarbonizing the economy is really the defining challenge of our times. The future is exciting for a company like Plug as we just showed you. Scale is monumental and massive and somewhat daunting. So the U.S. has faced large similar challenges before. And Andy, you're a student of history. How do you see this?

Well, I'm also sitting here in Rochester, New York, which is close to Buffalo. So back in the 1830s, they've built the Erie Canal going through this area. And this became a real, real prosperous area and also really opened up the whole industrial Midwest. When you think about cities like Detroit, Chicago, everything that happened there in the 19th century, in the 20th century, really started with the Erie Canal. And not to be exaggerate, but maybe a little bit, when you look at the world today and look what happened with the Inflation Reduction Act, but look at what Plug is doing, building out a green hydrogen network for us in the U.S. I believe what we're doing in hydrogen is equivalent to building the Erie Canal, that we're building out the capability for companies to decarbonize, for citizens to decarbonize, and ultimately continue the U.S. as a net exporter of energy as well as support the U.S. national security for a long time. And that's really what we're doing in this country, and it's really what we're doing at Plug.

So we got some help from the Inflation Reduction Act. There are a number of fantastic provisions there for hydrogen. So it came as a bit of a surprise or a big surprise for most people. But Erin, you have an insider's view. What were the factors, the ingredients, how did it all happen? Give us your perspective on this.

Well, I will say from our perspective, it was certainly not a matter of if we were going to get the hydrogen production tax credit was when we were going to get the hydrogen production tax credit. And it was interesting because there are a lot of starts and stops when it came to what started out as President Biden's Build Back Better legislation, that he had started talking about when he was running for presidency. And then it was part of the Budget Reconciliation Act, which is a way that only legislation can get done when -- there are -- there's one party that's in charge of all of the houses: So the Senate, the House and then the presidency. And so this was a big piece of legislation that was a game changer when it came to health care, energy and climate. And we thought it was going to happen, but really, there were a couple of starts and stops and we said, and even that summer, the President had come out and said he thought he was only going to do health care. Senator Manchin, who had a key vote had seen the inflation numbers, and he wasn't sure it was going to happen. And so -- but we did have an insider view and Andy had the opportunity to testify in front of the Senate Energy and Natural Resources Committee with Chairman Manchin. And Andy, you remember when he asked you what was the one thing Congress could do to put hydrogen on the map?

Yes. So I'm taking all the credit for this. But he turned to me and said, "Andy, what do we need to do"? And I'd say, what we needed was a production tax credit for green hydrogen and investment tax credit and certainty for time. And Erin, we did that. And then we had a great meeting with Senator Schumer. And look, there's been no one who's better for this industry and better for Plug than who I consider the greatest Senator in the history of United States, especially who he supports green hydrogen and fuel cells, but...

We can all agree.

I was at a median, I'm there with the Senator and I say Senator, what's going to happen. How much we really need this? "And he said, Andy, don't worry, it will happen before the fall". And I walked out a meeting with Gerry and Erin, and we turned each other and said, this is different than everything else. And I'm also the Chairman of the Fuel Cell and Hydrogen Energy Association. And we're having a meeting the day before the act gets struck. And we have high-power lobbyists who work for the Fuel Cell and Hydrogen Energy Association going to tell everybody, nothing's going to happen, give up. And I said, "I think you should tone down your message. I think it's going to happen". They said that Andy Marsh is always overly optimistic. And actually, it did happen. And we're lucky that Erin, I think you were hanging out in West Virginia, when it happened.

I was. I was there.

We spend a lot of time in places nobody would ever go. West Virginia is a great place.

It is a great place. And our new friend, Senator Manchin, were really excited to work with his incredible team. But -- and we are jumping from the overarching Inflation Reduction Act of what was happening on the hydrogen front, but it is tied together for sure. And our champions really wanted to make sure that hydrogen was a key piece to whatever was included in that package, and we're really excited and proud about that because things have really changed. Also, not to exaggerate or take too much credit, but I will say, Andy, that it was years ago when you had really thought together about how we were going to put together a team and really figure out what that game changing technology or legislation could look like. And so I don't know if you want to talk about some of those partnerships just as you're about to take a sip, sorry.

Well, I think that it does say a lot about Plug. I hope folks see today, we're willing to partner with lots of folks, be it customers, whether it's people supplying us goods, investors. They're all actually here today. But we actually did the same. We've worked very, very closely with Air Liquide. We worked very, very closely with Cummins. We work very, very closely with people who are competitors. But when we had a common goal and mission together, as we do in the Fuel Cell and Hydrogen Energy Association every day, we try to find ground that works for all of us. So quite honestly, we supported some things in the legislation that wasn't exactly how I would like it, but it was how you work with others and make the greater whole come true is what we did as part of a team effort to help this legislation get understood by Congress so that they would give it serious consideration pass. And so it was a great journey. And look, the journey continues. I think a lot of our efforts now are in Europe, right?

That's right.

So truly, truly an amazing accomplishment in the U.S. Erin with your work, you're busier than ever, tell us what's on your plate right now.

That is true, busier than ever. And once legislation passes, that's really just a first step. There's a lot of things that need to be done. And when it comes to the tax credits, the Department of Treasury recently put out a request for information to provide input on what some of those tax credits could look like. And it's way more than just the hydrogen PTC. And in fact, they'll probably be putting out another RFI very soon, that's very specific to this. But lots of work that needs to be done. Don and others from our team are leading that effort. And so we're working hard on that. But I also want to mention that it was a big year for us in the hydrogen industry. And that's really important to note, as Andy said, this is a collaboration. This is an industry effort that we're putting forth. But last November, there was a bipartisan bill that passed as well. Bipartisan Infrastructure Bill, and we're going to talk about bipartisanship quite a bit. But in that legislation, many of you know was $9.5 billion for hydrogen. $8 billion of that was for regional hubs across the country that will be built out for the production, transportation, distribution and use of hydrogen. And we're really happy to be working with a whole bunch of teams that are coming together to put in hubs applications. And in fact, Department of Energy has recently asked for concept papers, and we work with those hubs and go Northeast hub, NYSERDA and the other great ones that we're working with and thankful to our hubs team. And then there was also $1 billion for electrolyzers to help bring down the cost of electrolyzers and manufacturing of that. And then more $500 million for manufacturing and recycling for hydrogen fuel cells and such. Also, the President announced the Defense Protection Act, which is inclusive of fuel cells and electrolyzers. And there's just so much that needs to be done to make sure that, that legislation that was passed and those priorities that are put forward are done in a way that is the most useful for our industry and making sure that we understand the rules of the road of how to use them, how to move forward.

So Andy, we now have IRA. We know where the goalposts are. What in your opinion are some of the top few challenges that we need to take on?

So I always think about these things a little bit differently. But what the IRA has done is really -- the U.S. is a demand generate society. That's how you build businesses. And if you think about -- everything about how the U.S. support of colleges, housing, a lot of it had to do with how do you create demand. And what this act does is really encourage our customers to accelerate. We heard Amazon talk about their 2040 goals, to be net neutral. You heard from Microsoft. This helps accelerate those activities. So you have consumers who want to be green, companies that want to be green. And look, the markets don't price externalities correctly. So you really do need these incentives to really help scale these industries, but it also creates innovation. I mean this is not only the GIGAVAC factory, but the innovation center. And companies like Plug, and there's lots of companies in the United States who acts like this, drive us to innovation, which is the best of who we are. And on top of that, I -- why did the solar industry take off, why do so many industries take off? The U.S. has a unique position in the financial markets. I mean I think Sanjay talked a little bit about in his discussion about how these projects will ultimately be financed. Our strength as a nation, policy that drives demand side, consumers who want goods which are green, companies that are innovative and a Wall Street that quite honestly provides the funding and capabilities that make this all possible. And I think whatever the government puts into this, they're going to receive back tenfold because it is going to generate business today, and it's going to generate good jobs today for Green World in the future. So I really view this as an incredible win-win-win for the country.

So you meet with a lot of customers all the time. So in your opinion, what are you seeing in terms of areas of capabilities that are going to see maximum growth and deliver the highest impact?

I think I've listened to everything today. I think my line is supposed to be -- the $350 billion, Jose is talking about, is stationary, which can help in data centers, which can help even the EV of vehicles, the work we're doing with SK in South Korea for which ultimately becomes peaker plants here in the United States. Look, this is going to drive green hydrogen, not only the opportunity just for substitution. A green hydrogen is just huge when you just think about fertilizer and refineries for fossil fuels. They can start their transition by them going from gray to green.

Yes, we saw the curve that Sanjay showed.

Yes, absolutely free. And look, OE has deals about putting hydrogen and natural gas pipeline. Sanjay has customers who want to do that today. I mean this is an inflection point. And it's an inflection point that we've been waiting for, for a long time. And our responsibility is really to take full advantage of it. And that means to make sure we deliver customers great products, but it also means that we continue to drive down our costs. And here at Plug every time we double the number of units in the field, our costs have come down 25%. That's why scale is so important, and that's what we're driving. And this policy really helps us achieve that goal.

It drives scale, for sure. So Erin, you just got back from Europe, what is the reaction to the IRA across the globe? What are you seeing?

Well, it's interesting that you asked that question. And I would say that the IRA definitely have an impact across the globe. I will say in some places, our friends and allies are excited to see the United States take a leadership role in energy. But I also think that it's making some folks nervous. It's not as though people didn't know that the legislation that was IRA was out there, but I'm not sure that people saw when it was going to happen and if it was going to happen. And it quickly turned the United States into a clear winner and leader when it comes to clean energy, particularly in the hydrogen space. Also what's interesting is here in the United States, we look at energy policy and it's often tax policy. But other countries, especially in Europe, that's not how they drive, how they move forward policy. So when we had some of the conversations with the European Parliament, they're really taking a look in trying to determine what do they do that matches the incentives that we're doing, which is not necessarily going to be taxed. And so it's really an exciting time to see what not only is happening here in the United States but around the world of how we are going to build that commitment to hydrogen. And also, I think that there was a clear understanding that we, in the United States, are going to be exporting hydrogen. And we will be able to help fulfill a need for clean energy in a time when many countries need that right now. But I think we're going to turn it over to Benjamin and he's going to tell us a little bit more about what's going on in Europe. And as Andy mentioned, he's our Executive Vice President in charge of EMEA.

So let's get the video, please. [Presentation]

Thank you very much. I'm thrilled to be joining you all at Plug Symposium today. The Inflation Reduction Act is not just about the U.S. indeed. First, because the pragmatism of the IRA influences European policymakers to go for simpler, more effective rules. For instance, some rules around additionality of temporality in Europe were drastically simplified following the adoption of the IRA. Second, I would say that the Inflation Reduction Act accelerates Plug's European expansion plan. First, we now have 2 regional markets with strong regulatory support and subsidies, the U.S. and Europe. Second, companies like Plug will make the economics work much faster for green ammonia or green hydrogen exports from the U.S. to Europe. Europe plans to produce 10 million tons of green hydrogen locally by 2030. That's more than 100 gigawatts of electrolyzer capacity in [ styles ], and Europe plans to import another 10 million tons of hydrogen by 2040. This is a matter of energy security for Europe of corporation with energy allies, as you will hear from Minister Alexander De Croo. Plug aims to be this reach between the U.S. and Europe. This plant in the Port of Antwerp-Bruge is a first building block, and I would like you all to share directly from Belgium's Prime Minister, Alexander De Croo; and from Jacques Vandermeiren, CEO of the Port of Antwerp-Bruges, why this first plant matters.

Ladies and gentlemen secure, affordable and sustainable energy. That is what we need today. Firstly, we need to secure our energy supplies by ending our dependency on nonreliable states, an increase in cooperation with energy allies such as U.S., but also by producing locally together with partners such as Plug Power. Secondly, our energy needs to be affordable. Reducing gas and oil dependency makes us in Europe less vulnerable to price volatility. At the same time, investing in sustainable energy such as green hydrogen, diversifies supplies and reduces prices. Thirdly, moving to a low-carbon economy is a top priority. Hydrogen is a key factor to achieve this ambition. Belgium has ambition to power Europe by offering stability to investors. Offer a predictable regulatory framework and provide the incentives to transition to a climate-neutral economy. Just yesterday, we launched our renewed national hydrogen strategy in an event gathering top policymakers, industry leaders researchers and innovators. Belgium with its strategic location in Europe's industrial heartland is your hub for renewable molecules by promoting a robust hydrogen market, investing in hydrogen backbone infrastructure, working in close partnership between public and private stakeholders.

As our Prime Minister, Alexander De Croo has stated yesterday, the Belgium federal government has presented its hydrogen strategy in the new Federal Hydrogen Council in this very building, beautiful Antwerp Port House, and that is not a coincidence. Together with local and international partners, Port of Antwerp-Bruges is taking the lead in the transition to a cleaner and climate-neutral economy, based on renewable energy and feedstock. We play an important role in the local and international hydrogen economy by facilitating the supply and production of hydrogen distribution infrastructure and transport both hydrogen to the end users in the port and in the hinterland. As of today, the Port of Antwerp-Bruges is working hard to become the green energy gateway to Europe. In order to realize that goal, we need to attract strong players in the energy transition to strengthen our port platform. And that's why we were very [indiscernible] when Plug announced in June this year an investment of EUR 350 million to establish a 100-megawatt hydrogen production plant in our port. This plant will produce about 35 tons of hydrogen per day. Since this announcement, plans are being developed and the permitting process has been started. We expect that by the end of next year, we can move towards the groundbreaking of Plug at NextGen District. The presence of Plug in the hydrogen ecosystem of Antwerp-Bruges is a fact, and that makes us extremely happy. From Antwerp, Plug will make an important contribution to shaping the hydrogen economy in Europe. And we really look forward to the next steps, and we reach out to Andy Benjamin and their entire team to build on our lasting relationship in the years to come. I wish you an exciting event today, and I hope to see you all soon in Belgium or the U.S.

What impressive comments from an important partner inspiring true global energy transformation. The Port of Antwerp-Bruges is today represented by [ Philippe ], present a symposium in person today, and we are truly grateful for all your support along the way. And let me tell you one thing about this project in the Port of Antwerp-Bruges. Without making any marketing or sales efforts so far, we have built a funnel for as much as 5x the hydrogen volumes that our plant will produce, less than 6 months after revealing our ambitious plan to the world. But we will not just sell hydrogen. There is more than 1,500 acres of common logistics warehouses in the port, where we can sell material handling solution or stash new fuel cells to [ social ] power [ opportunities ]. Over the past 6 weeks, in Europe, we also announced the sale of 15 megawatts of electrolyzers to life. We delivered the first electrolyzer to be commissioned offshore in direct connection with offshore wind turbines in France. HYVIA homologated its first fuel cell vans less than 18 months after the creation of the JV. You'll hear about our first European pedestal customer in the coming weeks, and that's something I'm very excited about. And as we ambition to have our European production capacities to account for a large share of Plugs global deployment of green hydrogen generation plans across the wells, you will see more announcements in the coming months. But more than business achievements, we have today 10x more team members in Europe than 2 years ago, and we will have soon more than 300 employees in Europe. Plug is one of the largest employers of the hydrogenic system in Europe. So Erin, to your point, the IRA will help accelerate the adoption of the hydrogen economy in Europe by bringing us this precious decarbonized molecule. As Plug is set to play a central role in the European hydrogenic system, we see Europe as one of our uniforms. Unfortunately or fortunately, we have a lot of business going on in Europe. And I can't be here wished you in person today, but I hope you enjoy our symposium. And team, I pass it back to you.

Thank you. So it's really remarkable to see how Plug has become a global company, Andy, in the last couple of years.

No, it's -- it was important that we got the equation right in our local market. I think we're a very ambitious group. I think folks can probably see that. But it's really important that we deliver great products with great service at the right cost to our customers. And we got it right in the United States. And now in Europe, not only are we doing certain things by ourselves like at the port, but we've gotten great partners like HYVIA. I think you see my friend Luca there. And I think what we're putting together is something really unique. I also think when you look at it in Spain with Acciona, the relationships that have been established there. So you've heard about customers we're selling directly to. You heard about great partnerships. And there's lots and lots of activity going on about how we can help Europe become secure from dictators who are trying to destroy the world. It's really important. And I have some of my friends from the Atlantic Council here today, who came to hear about -- who've talked to us a great deal, how we can make sure Europe, United States work in partnership to make sure energy and we have a secure future. And that's really what we're working at. And that's what Plug is bringing to the equation. And not to again grab our tag line. We are hydrogen at work. And I think when I sat down with the people in Belgium and I told him what Plug has done, they want to work with us because they knew we would make things happen. And we're committed to make things happen here in our United States as well as our second home in Europe.

Thank you, Andy. I think, Andy, this is a good place for us to close this out.

I think they want to hear Paul soon, but we -- they have to listen to Sanjay again for a little bit more. So I'm going to hand it over to my good buddy Sanjay to talk about capital formation.

Again, as Andy mentioned, I think you are all certainly looking forward to hearing what Paul has to say, so -- which comes right after this. So I think, George, we're between that number and what everybody want to hear, right? So with that, well, so thank you so much for coming. It's great to see you. And for those of you who haven't met George or haven't come across some of the things he's done, George is the Vice Chairman for Lazard. He is the Global Head of their Energy, Power and Infrastructure business. And I think under George's leadership, many of you probably use this levelized cost of energy analysis for solar and wind and what that has done. He is really the mastermind behind that, and that has become a de facto industry standard. So -- and George has obviously been at Sempra. He's been at KKR. He was at [ Keratas ] as a partner. So when it comes to energy, power and more specifically renewable energy industry, so I thought that it would be great to hear some of George's perspective on how he sees the green hydrogen industry landscape unfolding, how capital formation might play out and what are the parallels maybe we can all draw from what has happened to the solar and wind industry. So with that, George, maybe the first question here, right, is help us draw, so look, when we first were looking at solar and some of the DOE loan guarantee program, where we're sort of in the same organization, right, it was very different times and costs were somewhat prohibited. The PPAs were at much higher level. But today, solar and wind prices have fallen as much as it has. So what would you say to people in terms of what parallel can we draw between what happened to the [ LCOE ] solar and wind, given your experience? And where do you see the whole green hydrogen industry going, now that we've all been talking about this IRA and PTC and things like that?

So first, thank you. It's great to be here. And the room is filled with optimism. And I don't know if I was on mic when I said to Andy what I thought about his presentation, but it's just great. It's really inspirational. But when everyone was fretting about where the legislation was going or not going, what we were saying to people who called us about, it was the most important thing to put in this legislation is something for hydrogen because it will let the industry scale. And what -- we've woken up in the middle of a great American industrial policy in some ways, without us really realizing it. And what we think is going to happen with hydrogen is it's going to scale. Costs are going to go down, and the time frame for adoption, realistic adoption across the different use cases has just been dramatically accelerated because of the Inflation Reduction Act. We do a quarterly series with CFOs across the utility industry, and we invite folks from Plug to this as well. And yesterday, we did this session. There's a slide in the materials we gave the group that shows by use case, just about every use case is acceptable from a cost perspective by the middle of this decade and earlier. So hugely important. And that's before you take into account the observation Andy made about. I don't quite recall it, but when we double the number of units we have in the field, our costs go down by X. So that's were going to -- 25%. So we're going to see that. And it's exactly what happened in the solar industry. So this isn't quite the right comparison. And it's an imperfect comparison. But whatever you think about the German feed-in tariff for the solar industry, it allowed the industry to scale and began the great cost down in the industry along with the subsidies in the United States.

So George, I think Lazard played obviously a very big role in terms of advising DOE on many things as well. So there is lots of activity going on with the loan guarantee program, even for the hydrogen industry. I think, was that really the impetus, if you were to get the back leverage and the project financing started for the solar and wind? Walk us through the journey of how that played out, right? The folks from for [ solar SunPower ] got some of the loan guarantee program, and now all of a sudden solar is an investable asset class. GAAP structure has changed. So talk about that a little bit as to how do you think it's all going to unfold.

I think the fellow running the loan program, Jigar Shah, is incredibly thoughtful and passionate. He is a very good team around him. I think it is the equivalent of a lending institutions team and will be very effective. And there's going to be places where the capital is not quite ready to form, where the DOE can provide a wrap or some support right now to allow the capital to flow. So their capital is not necessary in the future. So there is no need for subsidies for loan guarantees or loan support in the wind and solar and storage industry. It's just happening. That capital is going to flow. And I think there's probably going to be some places where it's going to make sense for the DOE and other state governments, local governments to provide support.

Okay. So now we are in a pretty interesting time as well, right? So the rates are rising, maybe it's a short-term phenomenon, maybe it's a long-term phenomenon. And obviously, you and Lazard obviously do a lot of work with the infrastructure funds, private equity funds. Has that changed their view on what is that equity return that they're looking for, maybe even for solar and wind? Is that going to end up impacting the cost of capital for green hydrogen build out? How do you see that playing out?

So it's -- you can look at some recent transactions, and it's as if nothing has happened in the capital markets, but we think cost of capital will go up, but we don't think it's going to make a difference to the energy transition and what Plug Power is going to try to accomplish. I mean, there is not a capital formation or a capital access program around the energy transition. It's going to flow. The issue with the uncertainty, with the legislation this year was really quite interesting because people just needed to know what the rules were. I put aside hydrogen for a moment. But in solar and wind, and storage. People just needed to know what the rules were, and then the money was going to flow. And the problem with the uncertainty was no one knew how to price the investment. And what we also said with the presidential election that we didn't think it mattered ultimately who was the President vis-a-vis the energy transition because the human race is driving this thing, and it's just going to happen.

So you really don't think the rising rates is really going to end up raising the rates out of the equity return?

It's going to raise their equity returns, but I don't think it's going to matter for projects and efforts that make sense. But if the yield curve steepens, which isn't what the market is predicting right now. But if the yield curve steepens, I mean, people are going to plug that into their model and cost of capital is going to increase. But at the same time, the Inflation Reduction Act, other developments, general acceptance of the energy transition across multiple areas, we'll offset that.

Got it.