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Plug Power CEO Andy Marsh joins Yahoo Finance Live to discuss the company's acquisition of Applied Cryo Technologies, and the future of hydrogen power.
BRIAN SOZZI: Shares of Plug Power are on a strong run, up for six straight sessions ahead of the company's much-awaited annual symposium today. Before that symposium kicks off at 10:00 AM, Plug Power is announcing the acquisition of Applied Cryo Technologies.
Let's check in with Plug Power CEO Andy Marsh on this key day for the company. Yahoo Finance's Akiko Fujita is here as well. Good morning to you both.
Andy, I'll start with you here. Big acquisition by your company this morning. Why did you pull the trigger?
ANDY MARSH: Oh, Brian, when, we look at it, Plug's built out the first green hydrogen network in the United States. And we've been vertically integrating for a number of years. The company's been around for 25 years. You know, we're promoting 500 tons of green hydrogen in the US by 2025. A key technology is cryogenics. Hydrogen likes to be really cold to be able to transport it and move it, and this gives us the capability of really filling out our vertical integration strategy for hydrogen storage as well as for hydrogen transportation. So that's why we took the step.
AKIKO FUJITA: Yeah, Andy, it feels like you've had an announcement every day this week in the lead up to the symposium. Certainly investors have liked the news. You're announcing a number of partnerships today as well, including one with Airbus as well as Airflow. Talk to me about, you know, what you see there because it sounds like it's still in the exploratory phase, but there's a lot of people looking to hydrogen potentially fueling planes in the future.
ANDY MARSH: Absolutely, Akiko. When you think about it, I think one of the reasons Airbus came to us because we've actually been the most aggressive about building out green hydrogen. And as Airbus says-- you know, and they'll be talking today at the Plug Power Symposium-- that the best solution long term for aircraft is actually hydrogen. You know, 2% to 3% of carbon for the world is emitted by aircraft, and they look at North America as the prime market. They've decided to partner with Plug Power to really think through how you convert airports to hydrogen.
And we'll be picking one over the coming years to start converting to hydrogen. So that's why they're working with us. And, you know, I think they're long term, but there's markets that are here today. You know, not the sexiest market in the world, but we start by building hydrogen ecosystems for forklift trucks. 25% of food in the US actually moved through our products during COVID. We're on-road vehicles. Today we're announcing our vehicle with Renault in France which is a joint venture between Plug Power and Renault for European commercial vehicles. We have activity going on with Acciona to generate green hydrogen in the Iberian Peninsula. So we have lots and lots of news today.
But, you know, we're real, Akiko. I mean, we've been doing this for 25 years. We use more hydrogen than anyone else in the world for transportation, and this is really just an extension of our mission.
AKIKO FUJITA: Specifically on the planes, how close are we to seeing hydrogen-fuelled planes on a larger scale?
ANDY MARSH: Yeah, so, you know, I think when you look at Airbus, they're talking about 2035. The work we're doing with Universal Hydrogen-- actually, there will be trial flights by the end of next year where they'll be converting De Havilland aircraft for regional flights to hydrogen. So, you know, it can be done.
And, you know, I think as you know, the cycle for airplanes is not overnight, but Universal Hydrogen has come up with a really cool conversion kit that will really start the journey to make hydrogen aircraft. So we're really excited.
We have a drone business. We have a regional aircraft business that we've worked with people on. And now we're really excited about providing green hydrogen to Airbus.
AKIKO FUJITA: At what point does hydrogen become competitive with oil and gas from a cost perspective, and what's the technology or what's necessary to get there?
ANDY MARSH: OK, so there's three elements. One is-- and this is the most important one is really-- so let me tell you how you make green hydrogen. You use a device called an electrolyzer which takes water, H2O, and splits off the hydrogen.
So one of the key item is and the key biggest driver is the cost of renewable electricity. When renewable electricity is in the range of $0.03 a kilowatt hour, you start to be competitive with natural-gas-generated hydrogen.
The second item that's really important is bring down the cost of the equipment. We make electrolyzers, and we found that every time you double the number of units in the field, the costs come down 25%. And in Europe, they're looking to deploy over 40 gigawatts by 2030.
And the third item, which I think everybody especially listening to this show would understand, it's the cost of capital. And as this technology becomes more and more mature, just like solar and wind, you're going to see the cost of capital for these big projects come down.
BRIAN SOZZI: Andy, speaking of numbers, you know, the deals for your company appear to just be accruing here. You know, how much in billings growth will the company do over the next 12 months?
ANDY MARSH: I think, Brian, I'm going to tell you to look for a news release around 9:29 today that will announce our projections for next year.
BRIAN SOZZI: Andy, we're only five minutes away.
ANDY MARSH: I'll tell my folks to work hard to get that out before the interview's over, Brian.
AKIKO FUJITA: Andy, let's talk about the infrastructure bill over in DC. The legislation setting aside about $8 billion in spending to establish for regional clean hydrogen hubs. I know you've been very busy in building out your infrastructure here in the US. You've got one plant planned over in Fresno as well. How much of that funding do you think Plug Power can tap into, and what does that ultimately mean for your ability to scale up in the US?
ANDY MARSH: Sure. I think the hydrogen hubs are really important for the future, and a good deal of the work, when you think about the work we're doing with Airbus, it's really thinking about a hydrogen hub at an airport, which will not only support planes but can support ground support equipment at airports, can support the vans which run around airports. So that bill is important to helping accelerate America's leadership in hydrogen and fuel cells.
Now, I would just kind of add also one of the speakers today at our forum will be Senator Schumer. And it's not only the infrastructure bill. There's bills moving along in both the Senate and House which supports a $3 a kilogram tax credit for green hydrogen, which is like-- so a kilogram of green hydrogen is like two gallons of gasoline. So it's very, very competitive.
And those sort of bills and extension of the investment tax credit like solar and wind have will also really help this market accelerate for the US and create lots and lots of jobs in this country.
BRIAN SOZZI: Well, good luck at the event today. Plug Power CEO Andy Marsh. I'm waiting for it to be 9:29. About that news-- that financial news is about to cross the wires. We'll bring it to you live. And thank you, of course, to Yahoo Finance's Akiko Fujita.