Bloom Energy Founder, Chairman and CEO KR Sridhar speaks about the path to #decarbonization and why we must act now at the 2022 Investor Conference. If we do not act collectively to drastically reduce greenhouse gas emissions, our planet is on track to exceed the disastrous 2.7 Celsius temperature increase. Dr. Sridhar speaks to the urgency of eliminating carbon dioxide (CO2) emissions today to protect the planet, and how Bloom Energy’s technology is uniquely positioned to address decarbonization.
Video Synopsis
Path to Decarbonization | Bloom Energy 2022 Investor Conference
Video length: 19:42
Talking Points:
- Welcome to 2022 Investor Conference
- Why Mission Decarbonization?
- Energy Security
- The Platform
- The Market
- The Korean Market
- The European Market
- History
- Partnership
- Future
Speakers
- Ed Vallejo, Investor Relations, Bloom Energy
- KR Sridhar, Founder and Chairman, Chief Executive Officer , Bloom
- Kyung-il Park, CEO and President, SK ecoplant
Transcript
Narrator:
We’re all powered by something. Innovation, pushing the boundaries of what’s possible. Resilience, always getting back up. Compassion, creating a better planet for everyone. And now, you can decide what powers you. Imagine energy abundance with no trade-offs, no downtime, and no limits, where technology built for Mars empowers businesses on main street, where game-winning goals and life-saving procedures, are fueled by a better form of energy. When power is resilient, sustainable, and predictable, there’s no limit to what you can do. We can decide how we power our future. What will you choose?
Welcome to 2022 Investor Conference
Ed Vallejo:
Thank you. Thank you. Good morning, everyone. Good morning. Welcome. On behalf of all of our Bloom Energy colleagues worldwide, I’d like to welcome you to our 2022 Investor Conference. We have an exciting day for you today, and it actually already started with our technology showcase this morning. In a couple of minutes we’ll start a presentation that will be full of data, full of content that you will actually see quite clearly how we’re going to reach our short-term and long-term goals. But first, safety is very important at Bloom Energy as well, so let me share with you a couple of safety messages.
Number one, more importantly, fire escape. You see the door that’s open there where you came in, that’s the fastest way to get out of the building. If needed, I will be calling 911. And if I’m unable to do that, Deb Mueller will second me for the 911 call. If there’s any individual emergencies, there’s an AED and first-aid kit on the offices on the left. We will get that for you.
Let’s talk a little bit about safe harbor. And there’s the slide, don’t worry, I am not going to read all of it. But what it says is that today we will be making some forward-looking statements. And these statements are estimates that are made with the best data that we have on hand today. And sometimes, the future doesn’t pan out the way you wanted it to, or the way you plan it to be, and we just wanted you to remember that fact. And with that said and done, let’s start today’s presentations. Thank you very much again for coming. And I hope you enjoy your stay with us. Thank you.
Announcer:
Please welcome our chairman and CEO K. R. Sridhar.
Why Mission Decarbonization?
K. R. Sridhar:
Hello, everyone. We’re excited by the opportunities energy transformation is creating for us. We are proud of the role we play in both combating climate change, and providing energy security. Our unique platform enables us to achieve a diversified and robust top line growth, with continued margin expansion, all aimed at delivering you, the shareholder, the greatest value. The theme of our meeting today, mission decarbonization. Why? Because it is a solution. It is the solution to the existential crisis of our time: climate change. We can successfully slow down the adverse effects of climate crisis by drastically reducing the carbon emissions into the atmosphere. On this mission, time, time, is off the essence. Shifting from high to low carbon-intensity energy mix now is as important as developing net-zero solutions. That’ll take time to rescale and have an impact. Why this urgency? In the absence of immediate action taken to substantially reduce emissions in the next decade, our planet is on track to a disastrous 2.7 degree Celsius temperature increase.
We must act now, because there is a time value of carbon. You all know this from your compounding of money story. A unit of carbon emissions that’s avoided immediately is worth far more than the same potential unit of carbon being removed decades from now. Just think about this. A future technology that is net-zero starting many years from now trying to scale, and because of the perilous loops that you have, the feedback loops it has, the impact it has on climate is very different from starting to remove carbon in every possible means along the way. So it’s an and, and, and, solution with a time value of carbon, right? Okay. So this is the reason when you look at it, renewables alone, growing at three times the current record rate, allow that to happen, cannot lower the emissions in a timely manner. That’s not coming from us. The International Energy Agency says that, and emphasizes the need to focus on carbon capture, hydrogen, waste-to-energy, and a shift from coal and oil to gas.
This is also the reason why the European Union has deemed natural gas-based power as a green investment. We at Bloom Energy agree with the IEA and the European Union. Our flexible platform will play an important role in all the pathways to decarbonization, short-term, mid-term and long-term.
Energy Security
In addition to decarbonization, there is another major factor that will shape our energy transformation, and that is energy security and energy resiliency. Business operations, and everyday life, are unthinkable when there’s a disruption for days of electricity or fuel supply. Digital transformation has made virtually every aspect of our life run on electricity and energy. Geopolitics, geopolitical risks to energy, cyber attacks, natural disasters, and the damage natural disasters cause to poles and wires that bring electricity to us, and the inability of the legacy solutions to meet the surging demand that the world has, all contribute to energy security, energy insecurity, and energy anxiety. So the future in this energy transformation is going to be about two things: decarbonization and energy security. Not or, and. And we are the one company that does not ask corporations and communities to make a false choice between security and decarbonization.
We are an and company. Our solution offers both without compromise. Our technology platform is modular and hot-swappable. The distributed architecture located at the edge provides the level of reliability that a centralized grid never can. The energy servers can also be clustered to build an energy cloud, like computer servers building a data cloud. Such an energy cloud is geared for utility-scale carbon capture, and it is designed for green hydrogen production at refinery scale.
The Platform
Let me spend a few minutes now on the unique and proprietary platform, whose intellectual property is highly protected for us. The platform converts chemical energy to electrical energy directly. This is the Fuel Cell Mode. The platform also converts electrical energy to chemical energy directly. This is the Electrolyzer Mode. Operated in either direction, we offer the best conversion efficiency in the marketplace. Period. The flexibility of the inputs and outputs from our platform accommodates and enables us to tailor solutions for our customers. Our platform uses an architecture that is similar to the semiconductor industry. I’m waiting for that slide to switch. Thank you.
And what it does, this architecture, it emulates the semiconductor industry and its building blocks, but more importantly, it tries to adopt the successful cost down and learning curves associated with that. Look at what you’re seeing. The fuel cells, the stacks, the server modules, the systems, the power center. For us, our analogs to the transistor, the integrated chip, the server blade, the rack and the data center, in the computer world. Right? So what have we done with this? In about 10 years, this company has built over 65 million fuel cells; over two million stacks; over 30,000 server blades; installed in over 700 locations. And the amount of power we generated, 20 billion kWh. It’s hard to think about this number, but since most of you are from New York City, it’s enough to power all of New York City for more than 150 days.
Just stop and think about it for a minute. Okay? This year alone, we will add another 15 million fuel cells, another six million energy modules. What will that do? Enough to power through its life, what we put out this year, will be sufficient to power New York City for over 75 days. So when you think about growth, what we did in the last 10 years, cumulatively we have been able to power 150 days. This year alone we’ll put out boxes that can power for half that time. We are growing fast. Next slide. And one more point out here. Go back, please. One more point out here. Are you able to go back? There we go. So we are able to add something else. Every chip, the stack, unlike the semiconductor industry, has a digital twin that’s remotely monitored, controlled and analyzed, and we use machine learning algorithms to learn from each one of those stacks to make it better, cheaper, faster. That’s what we do. So let’s go to the next slide.
So from an energy server evolution, going all the way from a zero generation five kW, to our latest generation, our power density, if you just look at the pictures, it’s heavily simplified, components are removed. We’ve gone from increasing our power density. This is the footprint needed to produce the same amount of electricity. If you’re going to put them in cities, this is important, right? That’s gone up 12x. When was the last time you saw power generation equipment going down in scale that size? Okay. If you look at the material usage, you all ask about cost, less stuff goes in, less expensive it is. If you just take that, look at the material usage, it’s gone down eight times kg/kW. You have less materials, it costs less to build it, it costs less to buy it. Next slide, please.
So we stay focused. And in the last 20 years, by doing this versatile platform, we have capitalized on everything we can do and bring value to our stakeholders. So when we built this company… Can we go back on this? The script is completely somewhere else. No, the script.
Okay. So we have created what is an efficient, high efficiency footprint, better products at lower costs. That combination of the learning and combination of the systems is what has led us through that. We stay focused for the last 20 years on developing this versatile technology, and making it affordable, robust, scalable. Built a strong company that’s well-capitalized and dedicated to delivering long-term value for our stakeholders. And the track record team to execute this is what you should be looking at when you’re looking at what we do.
The Market
So where are we in terms of the markets, and where we are with the customers? We’re very bullish on our growth trajectory. You could have sensed that. Why? Just look at our customers. They are among the leading companies in the world. They’re companies that lead on operational excellence. They’re companies that lead on risk management and on ESG.
These companies choose us for their energy needs today, and they’re confident of our ability to meet their goals going forward. We execute and deliver on the promises we make to them. How can you be sure? They give us large, multiple repeat orders. More than two-thirds of our business comes from our existing customers. We offer our customers predictability, resiliency, and sustainability. These three core value propositions are getting better and more compelling by the day. The alternative for them is to procure power from the grid. It’s getting less predictable, less resilient, less reliable. Bloom, on the other hand, is more predictable by the day as you saw in the numbers, more affordable, and more reliable and resilient. You should not be surprised then when I tell you, Bloom share of the US stationary fuel cell installations is 80%. We play to win. We have a very strong sales funnel. The best we have ever had.
The Korean Market
Speaking of real markets, leadership and winning, let me say a few words about Korea. We entered the Korean market five years ago. We are head and shoulders about the rest of the competition. Better in efficiency, better in capacity factor, better in availability. Bloom and our partner, SK Ecoplant, won 100% of the Korean utility RFPs we were eligible for. Let me repeat: 100%. We have deployed over 200 megawatts already out there. In October of last year, our Korea partner SK Ecoplant made a significant equity commitment, and something that is seldom seen in our industry, a 4.5 billion minimum take-or-pay contract for our products and services. Yes, their trust in our team, confidence in our execution, and superior performance, were all important considerations in them making this decision. But even more important was their confidence in our future products and our hydrogen strategy.
Why is that? Korea as a country has committed to a national hydrogen policy that will position them as a global leader in that field. The SK Ecoplant team are confident they will secure market leadership in Korea’s hydrogen economy with our best-in-class hydrogen fuel cells and electrolyzers. This desire to be a part of Bloom’s hydrogen future, was a critical factor in their investment and supply agreement. In fact, our first hydrogen-powered fuel cells and electrolyzers are already installed and operating in Korea. Like in the US, we now have the dominant position in stationary fuel cell deployment in Korea, five short years after we entered the country, even though competition is robust and was in the market a decade prior to our entry. Well, we move deliberately with intentionality, and we executed focus to become the market leader.
The European Market
So where are we headed next? Europe. It is clear that the current geopolitics commitment to decarbonization, support for hydrogen, and electricity growth are rising out of electrification of transportation and digitization. The timing is right for us to enter the European market. I’m happy to announce that our Head of International Business, Tim Schweikert, from whom you’ll hear soon, is going to relocate to Europe. Additionally, Carlos Langa, a power industry veteran for 20 years who ran distributed power business for GE, Alstom Power and Mann, will join us as a special advisor in Europe. We look forward to our market entry and growth in Europe.
In many ways as the industry transforms, we are in a category of our own, with growing revenue, margin expansion, strong backlog, and the best, most innovative solutions for customers who want low-carbon and resilient power today, and zero-emissions energy tomorrow. We’ll continue to build upon our mature technology platform, solid record of accomplishment, and robust growth roadmap. We are extremely excited about our future. Thank you.
History
Kyung-II Park:
Bloom Energy is SK ecoplant largest strategic partner in clean energy. We have become a leader in the Korean fuel-cell market. Since the start of our strategic partnership in 2018, Bloom Energy and SK Ecoplant have achieved over 200 megawatts of projects. We have seen the outstanding performance of Bloom Energy’s product over our past three years of collaboration. We also experienced Bloom’s new hydrogen fuel cells, and we are excited about the competitive advantage of these products.
Partnership
Our two companies have worked closely to build those shared commitment to sustainability and innovation. Also, the green hydrogen produced by SK Ecoplant linear business and the Bloom’s electrolyzers technology will contribute to a new era of clean hydrogen energy. This was the basis of our decision to sign on investment agreement in October 2021. And invested $255 million in December last year. This investment has made the partnership within the two companies even stronger. And we look forward to the future opportunities that lie ahead of us.
Future
The future of our partnership with Bloom Energy is brighter than ever, as we will continue to explore expansion opportunities. We will promote close core operation within the hydrogen value chain using ecoplant’s business development and engineering capabilities, combined with Bloom’s technology.