Ceres Power Holdings (LSE:CWR) — Ceres and Atkins in conversation for a Hydrogen Technology Update

0:01 Good afternoon, ladies and gentlemen. Welcome to the CERES POWER HOLDINGS PLC Investor Update. Simply type in your questions at any time and press send. I'd now like to hand over to Director of Corporate Communications, Elizabeth Skerritt. Good afternoon. Many thanks. Hello, everyone, and thanks for joining us. My name is Elizabeth Skerritt, and I head up Investor Relations for CERES. Many of you will also have met our technology delivery director, John Harman, or at the very least seen one of his many publications and podcasts on the topic of hydrogen. Earlier this year, John's team announced a collaboration with Atkins Realis to design a modularized production system for green hydrogen. And today, we are delighted to welcome Gareth Richardson, who heads up low carbon technology at Atkins, to discuss the project in a bit more detail.

0:57 Then joining them is Chris Leonard, who's the energy transition research analyst at UBS. He's kindly agreed to host the conversation and try and get to the bottom of where green hydrogen is likely to play a role in the energy transition, which industries will benefit, and how CERES' technologies can integrate into these solutions. So as ever, feel free to add your questions via the systems q and a function. For the purpose of today's session, we are sticking to the topic in hand, but those that are not picked up will be addressed

1:26 later by the team. So without further ado, I'd like to hand over to Chris. Thanks, Chris. Thanks, Elizabeth. So, yeah, I'm Chris Leonard from UBS Research on our energy team covering energy transition enablers across Europe. And it's a real pleasure to be invited to moderate the discussion today between Gareth and John. They're both experts in their fields, which means I have the easy job of asking a few questions and steering the discussion, which I'm sure will be educational for all. To kick off the discussion, it would be great to turn to Gareth to introduce himself and the work that Atkins Rialis does in in green hydrogen. Thanks. Hi. Yeah. So welcome, everyone. I'm Gareth Richton, the telecom technology lead. I'm the engineering manager on the work we're doing with CERES. So I've got a good in-depth background on what we're looking at.

2:14 And in terms of as a company, it's a global engineering company in project management with 40,000 staff worldwide. We work across pretty much every sector from infrastructure such as national grid upgrades, major road networks, down to building semiconductor manufacturing plants, and mining sites. We even own our own nuclear reactor design, so quite a quite a broad spectrum there as a company. But in the global hydrogen industry, we're supporting we're actually running one of The US farm energy hubs, the Pacific Northwest hub in The US that's about to receive 1,000,000,000 of funding from the US government. And we're expecting that to unlock about 6,000,000,000 of dollars worth of private investment in that area in Pacific Northwest. Some of the projects that we work in in some of the green space, we're working on green and blue ammonia production, Emethane, so we're in Montbinn, Quebec. We're just part of the design for the emethane part there.

3:13 Green steel, we've done a number of projects there. And in The UK, we're looking at gigawatt hour salt cabin storage up in the North Of England, and we're doing the designs for that, including designs for the cabins. These a lot of these projects are in around The UK, North America, The Middle East, and we do a variety roles in those from being the owner's engineer on the client side to actually doing the design all the way through to actually commissioning an ammonia plant building and commissioning an ammonia plant in a month last year.

3:44 In terms of the technology space we get, we do we are actually a CTO for a venture capital firm dedicated to aerospace, doing a bit in the hydrogen area there. We work with on new technologies in blue hydrogen, and, obviously, the project we're doing with CERES to make green hydrogen. So we're really focused on the energy transition and how we can really support that from a technology delivery, aspect.

4:07 There you go, Chris. Perfect. Brilliant introduction across the whole range of, of the hydrogen delivery systems. That's really helpful. Thank you. And over maybe to John to introduce CERES' view on the hydrogen industry today and where CERES is right now. Yeah. Thanks very much, Chris. Hello, everybody. So our technology so really we started about five years ago, 2019, thinking about how we could apply a technology not only for fuel cell applications, but also for producing green hydrogen. And we see a really great fit with the technology in terms of integrating it within industrial processes. So, you can do that, if you can use some fairly low grade heat from industrial processes to raise steam, then actually you can get some really high efficiency, really low electrical energy consumption for generating hydrogen.

5:04 So so we certainly see our solid oxide technology as a really good fit with with integrating industrial processes such as steel production, ammonia,

5:16 synthetic fuels, synthetic aviation fuel and e fuels as well. And that's really what we've been been working with with with Gareth and the team at Atkins to look at how does how does our technology scale up for industrial applications and and how can we get the best out of it to decarbonize those hard to abate sectors.

5:37 So you guys both announced in in February this year that you were working together on a modularized electrolyzer system design and and maybe a really good time to give us a a view on on how the project is going and and what the scope of the work was and is. Yeah. Sure. Maybe I'll shall I take that to start with and then I'll hand over to Gareth. So so we initially, we started with a technology demonstrator system, which you may well have seen a fair about on LinkedIn and the press. So we decided in 2021 to build a one megawatt class electrolyzer technology demonstrator. We got that up and running last year and now that is at Shell's technology center in Bangalore just being commissioned.

6:25 And that's a really great first start to really understand how

6:29 our technology is gonna work at a system level. But thinking about how the technology is gonna scale up and scale out is a is a much bigger question, really. And for that we thought CERES was best partnering with an organization like Atkins to really think about plant level architecture really from the outside in. So thinking about integration with electrical systems, downstream hydrogen off take. And then how do you

6:59 do you integrate all the different plant level services together?

7:02 And what does it mean to scale up the technology into into building blocks that can be made at factory level, but then deployed 10 megawatt, 100 megawatt, 200 megawatt blocks. So that's really what we started to look at with with Gareth and the team earlier this year. I'll hand over to Gareth for a bit more info on that. Yeah. I think I think one of the the key steps in it would really is is bringing those two ends. You you understand what the requirements are of the the base system, the heart of it, the electrolyzer to stack, and then bringing it well, what does that end user really need? I'm trying to bring those two two bits together with all that knowledge so that you actually get a product that the the industry wants rather than forcing your impression of it. You do understand what industry wants and then bring really drive your design from that, and that's what we've done as part of this project.

7:50 And as a follow-up from that, I mean, obviously, it's it's fairly new a few months into the project, but what have been the key learnings and outputs from from this early stage of the study? And and how how does that align with what the end users are looking for? Maybe, Gareth, if you could continue on that. Yeah. Yeah. Carry on that. I I guess if if you start with the end user once, we go back to what some of the learnings we've we've come out of it. I mean, one of the key bits is electrical efficiency. You need to have high electrical efficiency, and SVOC allows you to do that. And as John alluded to earlier, when you've got steam available, you are swapping out some of that high value electricity for low value steam. And it still has a cost, but it gets much lower cost than it is using electricity. So it allows you to really drive down that the electrical cost of the system. And then when you look at it as a capital cost, that's what they want. Low OpEx, low capital cost, and that's how you get to low cost hydrogen.

8:43 So what we've really focused on is is how do we design the various bits of the plant so that you can scale it vertically? And when I talk about vertical scaling, it's not different to how you make the stacks. So a stack you make in in multiples. You make lots of them like cars. Right? You're mass manufacturing,

9:02 and you get down the the learning curve on that, and you can get your costs down on that. But if you look at big industrial plants, they haven't gone down that route. They go, right. Well, I need to make everything bigger. I need to vertically scale. And a good example of this, if I have a pipe and a pipe, I make the diameter twice, we'll actually get four times the flow, not twice the flow just by adding the diameter slightly bigger. So it's not like doing sort of horizontal scaling as I'd call it. You're actually using where you say, I had four I had need four pipes instead of just one that's twice the diameter. So you go find those bits of the

9:36 plant where you can really scale it bigger and get the cost saving from doing that vertically scaling it rather than doing the mass production piece. And that's what industrial plants do. They go, well, I'm gonna make my reactor half a meter bigger and get four times the flow or three times the flow through it and get the production up. And I got more flow and products to average my CapEx across. So this is what you're trying to do with this, trying to get that CapEx down higher higher production rate so that you can average our CapEx across more production, and that really helps drive down the capital cost by doing that with the plant. The the actual stack of so stack array module, which is what CERES POWER HOLDINGS is the the stack piece there. That, intrinsically, like I is mass manufacturable. It cannot be there's limitations on how big you can make that.

10:23 But once you take that away, well, what else can I do with that rest of that plot? And you can drive the efficiencies there, I think. And I think that that's that's the one of the learnings you've got is there was a lot of opportunity to do that. And I guess actually coming back to one one of the other points about doing that is is that where you have electrolyzers that are designed to say 10 megawatt with all their parts and everything, just multiplying those up on a site, developers not a big fan of that when they go and look at that in the market. The feedback we've had from certain developers is that I don't want to go manage a 110 megawatt electrolyzers with a 100 balancer plants. I want to go man like, manage as little equipment as I can because otherwise, I've got a 100 pumps, a thousand valves rather than a 100 valves and a 100 pumps that I might need. So it's that it's finding out all those different bits from the end end user, bringing that into the design to get something that really meets the requirements industrial scale. You've got to remember, hydrogen's used in industry now. It's not really used anywhere else. So the scale is big. You know, steel plant needs hundreds of megawatts of capacity.

11:29 You know, it's a 120,000 ton roughly of hydrogen for, say, 2,000,000 ton steel plant. So that scale really brings to you well, actually, that's that's not a big steel plant either. So that gives you the scale that you need to get to. So just multiplying up lots of little of extra rises, more than a balance of plant isn't gonna work for that because your maintenance costs, your operating costs are gonna go through the roof. So you really have to find where you're gonna get that benefits at that scale and bring that back down to your core design on deciding how big that module is gonna be. And we've done that. I think we've got to the right level module, and then we're scaling up the balance of part now to meet that at the big at the larger scale. So, hopefully, that gives you a bit of an idea about what we've learned from the project so far. No. It definitely does. And and maybe a a good moment to have a look at what the modules look like. And I think we've got a short video to to show the output of the work, and and maybe John will guide us through that if we can show that.

12:21 Yep. Sure. Sure. Just a bit of a caveat. This is a bit of a sneak peek of of the video and it's providing an example of a a 100 megawatt plant. So we just we we thought it would be really great to to be able to show show everyone this today. But as I say, it's a it's it's the first first cut of the video. Hope you enjoy it.

12:49 CERES is a leader in clean energy technology, the world's most progressive companies to decarbonize at the scale and pace needed to achieve net zero. CERES have leveraged Atkins Realis' global expertise and capabilities in hydrogen across the full value chain to identify opportunities to use CERES' technology in industrial applications. Together, the two companies will develop an electrolyzer module and commercially scalable green hydrogen plant design based on the highly efficient CERES steel cell electrolyzer technology. Let's take a look at how the plant building block is differentiated from low temperature electrolyzer plant designs. At scale, the technology decarbonizes industrial sectors utilizing building blocks of 100 megawatts of modules with scaled balance of plant.

13:44 The plant will produce green hydrogen at a rate of 26 kilotons per annum at 30 bar. CERES steel cell electrolyzer is the latest generation of SOEC technology, which provides the advantage of operating at lower temperatures. This differentiating feature means that CERES' proprietary technology uses 30% less electricity compared to alkaline electrolysis electrolysis when coupled with heat from industries such as fertilizer, chemicals, and steel. Not only does this save on renewable power costs, but it also saves significant plant capital costs by reducing the substation size.

14:25 CERES' electrolyzer module, which, due to the lower operating temperature of the technology compared to other SOEC technologies, removes the need for expensive materials and design complexity. Each 8.6 megawatt DC electrolyzer module produces over six tons per day of hydrogen with a footprint of only a 120 square meters. Designed for optimum performance, the balance of plant is centralized and optimized to recover heat from the hydrogen purification and compression to warm up the feed water, increasing overall energy efficiency and significantly reducing the cooling requirement by 19 megawatts. As the electrolyzer module is pressurized, overall performance is improved and electrical consumption is reduced at plant level versus unpressurized electrolyzers.

15:20 The plant's highest efficiency and lowest capital cost is achieved integrated with an industrial facility that produces heat, for example ammonia. This allows the plant to replace electricity with thermal energy. CERES and Atkins Realis' 100 MW plant design enables a significant reduction in the cost of hydrogen production, providing the optimum solution for heavy industry transitioning to a cleaner energy future. To learn more, go to cerys.tech.

16:03 That's very informative. And I think some of the key takeaways from that might well also be the obviously, the efficiency gain, but but equally, the footprint that that is very impressive. And I just wondered when you're looking at the the key technology asks from your perspective, customers across the different industries of ammonia, maybe steel or synthetic fuels,

16:25 What what sort of the are the key are some of the key challenges of the current solar oxide electrolyzer technology? Is it that scale out to prove it can go to a 100 megawatts and and and one gigawatt upwards? Is it the cost per megawatt? Is it the the footprint size, which I've just seen there? Or is it maybe reliability? Like, what what are the key buckets that you guys need to tick to to gain those, you know, the trust in the orders?

16:50 Well, I think it's definitely the they need to be a reliable supply of low cost energy. That's that's absolutely key. And it's gotta be, like I mentioned earlier, efficient CapEx, OpEx, and footprint, as you mentioned, is very key as well. A lot of people forget that land costs quite a bit. It's quite often it can hold from some of the feasibility studies, but a gland costs quite a bit. And if you're on a brownfield site as well, so an an old steel barn or something like that where they're trying to build a new site, they can be quite site constrained as well. So having a smaller footprint really, really helps with that.

17:24 I mean, a lot of industries are looking for, you know, 97% availability of the kit they're trying to trying to bring in for hydrogen. They're looking at very high liabilities in that area, and having a modular system that we have allows us to try and get get to that 97%, and that's what we're targeting. You know, the the other thing to think about in these areas when you you're talking about the industries that we're looking at, big ones, they don't like going up and down in terms of their their throughput. So they really like being steady, which means you need to always have that hydrogen there. So the plant needs to be able to do that. We're either gonna have to put large amounts of storage in, like salt cabins, or you're gonna have to put a very stable grid connected to it.

18:08 And, again, again, it also comes down to economics as well with those kind of things. You're you're trying to achieve at least 65% uptime on everything because you're just not gonna have enough of a product to average your cap rates across. So these these projects, you will they're big, and they require a hydrogen plant that can deliver the low cost hydrogen in the right footprint with the right efficiency, the best well, the highest efficiency you can get,

18:36 and trying to really drive down that CapEx to meet that. And some of the areas where you can drive down that CapEx, and it's alluded to in the video, is people forget that the balance of plant is actually quite a large chunk of that cost and of large footprint as well, which adds to it. And you you you reduce that with having a higher efficiency by the substation now is much smaller as it as I mentioned in the video, but also by cooling much more, I'm not losing as much heat.

19:02 And one of the real benefits that we probably don't talk about enough when people talk about solid oxide is the fact that it doesn't over its life, most electrolytes degrade, and they have to put more power in across its life to keep the same hydrogen production rate. Okay? Now when you with a salt oxide, you have an extra handle, an extra variable you can use to adjust that by increasing the temperature in the system, which reduces your resistances and reduces your electric consumption. So you can maintain the same efficiency by adjusting the temperature.

19:31 So if I'm designing a plant for a alkaline or pen, I need to oversize my substation by, you know, 20%. I need to oversize my cooling by 20%, but I don't need to do that salt oxide. And that's a major benefit in terms of the footprint, the capital cost, and the efficiency of these systems. So that's why it's a really that's where you see, I think, is a is a really great tie into industrial facilities where you have that that thermal energy that you can replace your electrical energy.

20:01 Yeah. Thanks thanks, guys. I mean, I I think you covered that brilliantly. I think I'd just add what what what are people looking for as well from solid oxide? Well, they're they're they're looking for the availability to buy the electrolyzers as well, So, and this is something where I think CERES' particular business model is a real strength.

20:22 We're a licensing business model. So we we license the the the use of the technology for people to build into products, but we also license the manufacturing. And we've been working with our licensees developing factories for many, many years, which is scaling up the production of the of the cells and stacks to to many, many, you know, tens of megawatts currently with plans to go much larger. So actually, the manufacturing readiness of CERES' technology is there as well. So it's ready to hit the ground, really, in terms of scaling out the technology, building it into products and then moving into projects, green hydrogen projects in a way that, you know, we've really brought the experience of our licensees to bear in this regard to really get the technology to a point where it's, you know, great quality, high yield and optimised in terms of its manufacturing cost too.

21:23 I think there's probably some other points to just embellish on what Gareth said. So, one of the key questions is the delivery pressure of the hydrogen as well comes up quite often. And typically Solid Oxide technologies when they've been working in fuel cell mode they're operating around atmospheric, they don't need to operate at pressure particularly. And if you just take the technology and run it in reverse and don't pressurise it, it works absolutely fine. But actually you get a very low pressure out the electrolyzer and if you're going into an industrial process that causes some problems, right? So it causes problems in terms of that first stage of compression because you're going from a very low pressure up to the next stage. That's expensive in terms of energy requirements to compress.

22:11 It's also expensive in terms of CapEx. Those low stage compressors are really quite expensive and they're big and they take a lot of maintenance actually. One of the key voices we heard when we were developing our architecture with Gareth was try

22:26 to deliver the hydrogen at pressure. It doesn't need to be particularly high initially but even something around two bar gets you over that first hurdle to entry, really, those first barriers to entry in terms of getting electrolyzer systems into industrial use.

22:44 Yeah. I think the the the bulk of the energy you need for compression is in that the first two bar. So you get a huge amount of that, and then the curve after that flattens out. So you you you know, as you go up compression, there's not as much of an electrical efficiency benefit to doing it. So, yeah, it's definitely a big benefit there.

23:03 And whilst you're still on the the compression angle, how difficult is that to achieve in the electrolyzer design getting getting that two bar to become available? Is is that a challenge which you guys feel like, you know, you're you're you're still early on the on the development curve for? Will will it be challenging for others in the industry? Obviously, it's still a a pretty small nation electrolyzer or solar oxide electrolyzer industry. Will will others struggle to get there? Could this be a differentiator?

23:31 I I don't think it's necessarily a differentiator. I mean, we've you've seen in the video those those copper colored pressure vessels. So, we took a decision to actually not ask the stack to withstand the pressure. We, you know, we're installing the stacks within a pressure vessel. And, you know, there's other solid oxide designs which are following a similar approach

23:54 out there. But I think other companies who may well be set down a certain path in their system designs already and are effectively just reversing those system designs, that's going to be quite a challenge because they're already heavily invested in those factories to build the systems the way they are. So I think it just depends really, but but I think we believe

24:19 that actually having pressurized SOEC for industrial applications has got to be the way to go. Yeah. And, Gareth, you also spoke about about the uptime, the 65% uptime and above, and and obviously, we need need to see utilization being high. Was is there anything on this you spoke about storage, maybe cell carbon storage and and we didn't mention batteries, but but clearly, grid connection might be important to enable solid uptime. Is there has there been any other elements of of the design that that's needed to to be sort of modified to enable solar oxide to stay at high levels of utilization,

24:56 you know, or or is or is it responsiveness is is actually at a high enough level to to be able to move to swings in renewables? Yeah. So so one of the we part of the requirements piece we captured at the start from CERES POWERS and and industry was they they just need to be able to vary with the power source that's coming in. We need to have that ability to do that. So the system's designed to be able to vary with renewable load as it goes up and down, and it can do that in a similar way to the way alkaline electrolyzers do it. So it's able to respond quickly to those and do it. And I guess the point I was trying to make earlier about those kind of things is, yes, you want that, but you don't wanna be doing that all

25:34 day long. Because if you're if you're varying your power down low all day long or varying it hugely, well, your production rate's going down. Power equals hydrogen. Right? So you most most big industrial sites, they wanna be economic, have to run at quite high utilizations to actually do it, which means your electrolyzer has to run at high utilizations. Now you might wanna be able to vary the times to do things because there's certain things you can do if you have a bit of storage. You can place services to the grid in terms of demand response, and you wanna be able to do that. So having the ability to have that in the electrolyzer design or accounted for really helps with that in terms of being applicable across the market.

26:12 I think probably just add one point on what John mentioned earlier about the job the business model that CERES has is is there's another advantage to that if you think longer term. Having multiple company other companies building stacks really helps you with the ongoing maintenance. There's access across the market then. If one company goes down, well, another company will have the

26:35 production facility that are building them. So if you have, like, a one stop shop, small electrolyzer company, they don't have that that backup there in the longer term. So that's another advantage that we haven't really ever talked about, actually, that CERES's business model really helps with distributing that risk, that long term risk in terms of have to change these out. Because don't forget electrolyzer stacks. Like I said, it's great, so you need to replace them in the life of the plant.

27:03 Obviously, we've spoken about how how central sort of waste heat will be to improving the the power consumption of the solar oxide electrolyzer. And maybe, John, it would be helpful to to to quickly run through and recap why it is that the Sol Oxide has such a strong hand to play for industrial decarbonization and why the technology is quite unique with the with the high temperature aspect to it.

27:25 Yeah. Sure. I mean, really, it's party trick is operating at at high temperature. The the the the stack itself, the core stack. Mean, our our operating temperature is between five five hundred to 600 c. We're lower temperature solid oxide. There are other generations of the technology operate at sort of seven fifty up to 900. But really, you know, the key efficiency is driven by being able to electrolyze steam. That's really your thermodynamic advantage there. That's where you get the most bang for the buck. So, if you can feed steam into the electrolyzer, you know, you're already the stack level, you know, thirty, thirty sorry, 34 kilowatt hours per kilogram at system level 37, that kind of range, you know. So, compared to alkaline and PEM who are, you know low 50s at best it's quite a significant gap there.

28:24 So, but you know one of the misconceptions you need really high grade heat to operate an SOEC system and that's just not true. As long as you can have steam 150,170 degrees C from an industrial process then that's fine. And actually what happens in terms of getting the steam up to the temperature required to enter the stack is you have a system of heat exchangers in electrolyzer module we saw in the video earlier as a centralized heat exchanger pack and they do the job of increasing that steam temperature to the end of the stack. But that's the point and really those sort of grades of heat 150,170,200C at industrial plant level, you know, they're generally on the way to a cooling tower. There's not much you can do with that grade of heat. Normally most of the most of the useful work's been taken taken out of those streams by the time they get to those temperatures. So normally you'd be sending sending it to a cooling stage or something like

29:26 that. So actually that's that's quite a good advantage of solid oxide. You know, you you don't need you can use those waste streams and you can generate real value from them. Yeah. I'll probably add there's a there's an important piece on that around the industry the types of industrial technology that we talked about earlier about fertilizer, about steel, and about e fuels. So, you know, if you take fertilizers on exothermic reaction, so it's producing heat as the the nitrogen and hydrogen are reacting together. And and just on its own, the ammonia plants will produce 75, 80% of the steam of the energy required to generate the steam for the solid oxide. And if you're making fertilizers, you're running a nitric acid system as well, that's exothermic, and you get to all the energy you need to produce it.

30:13 And if you're doing a greenfield design, well, then you're actually removing capital cost from that ammonia plant because now you haven't got a big power generator. They normally have a big turbo generator to recover that heat. So you generate steam, a big steam generator

30:26 anyway, and then they put it through a turbo generator, recover a couple of megawatts of electricity out of it. Well, actually, I don't need to do that. More it's more efficient to take that energy is to get straight into a solid oxide to make my hydrogen rather than taking that electricity and putting it to the to an alkaline plant. So it's another really key aspect. You can't just think about the electrolyzer costs. You need to think about, well, actually, what are my full greenfield plant cost or my integration with my full plant cost for that industrial? So it's, you know, say additional savings you can get there with the solid oxide.

30:57 You're on mute, Chris, I think. I am on mute. There was always gonna be one of those. But but, John, you mentioned that the the lower temperature aspects of of the solar oxide technology from CERES. Yeah. And maybe I just wondered if if there was a a run on for when you come to the plant design, what type of metals or materials need to be used if you're running maybe a higher temperature version of solar oxide operating those seven fifty to 900 Celsius range you spoke to, does that does that change the cost? Does that change the balance of plant needs, which obviously, Garrett spoke to how important

31:29 balance of plant is in the in the total cost? Yep. Yeah. Abs absolutely. Yeah. We do see a bit of a differentiator there with our operating temperature range. They tend to fall in sort of industrial industrially recognized temperature ranges for materials, for example. But also, you know, the thermal expansion and also the heat loss is a a is a really important consideration. So with higher temperature solid oxide technologies,

31:59 you know, you're going to be into quite exotic materials, quite high cost materials and then you want to closely couple the heat exchangers to the stacks. So that tends to lead to an architecture where it's quite very distributed. You've got lots and lots of heat exchangers all closely coupled with quite expensive materials.

32:18 CERES' operating temperature means that actually you can have one big heat exchanger pack which is serving lots of those stack array modules. You can have reasonably long pipe runs between between those things, you know, they could be insulated easily, the thermal expansion isn't too bad. And if you do all that, you know, lower cost materials, much bigger heat exchanges, fairly standard design practices, then, of course, the CapEx costs reduced quite significantly in that regard. Yeah. I think one of the key bits was the the strength of the steels that we're able to use. So we're able to go down to the 300 series type steel stainless steels. Because once you go towards the six fifty temperature range and going into where some of the higher temperature SVCs run, your your strength of the material really drops off a cliff. It's not it's not linear. It goes, boom, falls away. So you're trying to keep it in that range allows us to use those cheaper steels for a good partner design. It's really helpful.

33:20 And and whilst we're on technology comparison, may may be pretty useful to to speak about the views, potentially, from Garrett here about the different technologies at play, you know, PEM, alkaline, solid oxide, and and the landscape of these different technologies. Where do you think solid oxide compares at the moment? Obviously, it's still nascent and and it's being developed. But yeah, how do you view the landscape at the moment, Gareth, on the different projects you're you're helping with? Yes. We see this. We we always put SCC into our analysis, although most of our clients ask us to do that as well. There's definitely growing interest across the developers in Sodoc so they can see the benefits of it. And whenever we do it, we're we're all nearly always coming up with in fact, every single time we're coming up with 10% or greater reductions in the LCOH, typically even more than that.

34:12 And that really, really means that the developer interest is really huge in this area for especially people that are developing ammonia plants, which throw a lot when, you know, the majority of hydrogen goes to in our food and all all refineries. So they're they're really looking for that. And one of the key pieces that they they ask for and one of the reasons why they tend to go, oh, actually, I wanna go with alkaline is technology maturity. And if you look at alkaline, the, you a couple of 100 megawatt scale facilities we built in the past. So people know this technology. Now the issue with that is that those those those electrolyzers in the past were run flat out of hydro. They weren't they weren't varying up and down.

34:57 And one of the newer ones that's been built in China, I think it was for Sinopec or something like that, that was I think it's over a 100 megawatt as well. They had some issues with that. They had when they were trying to vary it up and down, they had gas crossover and those sorts things. So as every every new technology we bring into the market, you come across new things, especially when you change the use case. And I think the the key thing about CERES' technology is that they're they've already got a lot of it demonstrated already with their fuel cell side. So it's it's actually a lot further along than some developers think. They think, oh, this is completely new coming out of the lab. It's not. It's in the market now. But as a fuel cell, all we're doing here is changing it over to work in the electrolyzer form. So it's that convincing people and having that credible path to demonstration, which is what CERES is developing and doing. Getting getting this into the market is really key so the developers feel comfortable, and especially people financing these projects. Right? It's the finance people that are driving a lot of these technology decisions.

35:52 They're going, I want I would say I've got nonrecourse finance. I don't wanna take that risk. I would much rather you go with that alkaline system even though it might mean that the project's 10 to 20% better off from a cost perspective from a operating cost perspective. It doesn't mean that I wanna take that risk. So it's trying to get the market ready to take that and take some of those risks, and and the market is getting there now, I think. There's there's some bigger and bigger solid oxide deployments going out there and as from other companies, and CERES has got that one megawatt one. And when you get to the the next bigger one, you know, in multi megawatt scale, it will really demonstrate to the market that once you got that core building block demonstrated, you can just repeat it then. And then you just got a little bit of risk, but that risk is on plant that you well know. It's the same kind of plant you have in oil and gas facilities, so the risk is much lower when you go to the bouncer plant. So it's just getting to that demonstration of that core piece.

36:43 And, John, was there anything you wanted to add on on the solar side market at the moment and and competitors that you're seeing? Yeah. Well, I I think I've just come back to our our business model again because I think it's it provides for further levels in the supply chain than than even fuel cells do. Right? So so in the fuel we you know, fuel cell market, we would license to maybe a a cell and stack manufacturer, but they tend to also be the system in the product company as well. And you look at examples of our current partners. So they'll be making the components but also designing them into systems and then selling the systems on the market. Whereas in SOEC, you know, you're going to have cell and stack factories, and, obviously, that's high volume ceramics manufacture making many, many cells a year, you know.

37:33 Then you've got the kind of industrial process equipment manufacturers. So you've got, You saw on the video, you know, the stack array modules, they're quite large. Right? So you that there's that they're gonna be built in factories, but they're sort of akin to very large engine sort of scale and the electrolyzer module itself. And then, of course, you've got companies who are then going to be the overall project engineering companies such as Atkins and other EPC companies who are then going to be working out the best way of deploying all that technology and the rest of the plant to to provide the best solution to the client whatever their application is whether it's whether it's hydrogen for steel or ammonia or synthetic fuels or whatever. But so I think I think that the the our business model provides a really rich business opportunity across those different areas for and that's what we're seeing at the moment is real, really strong interest right across that value chain of companies who are interested in moving into that space with a proven technology proven technology in fuel cell, you know, we've been working on it over twenty years in fuel cell mode. We're effectively operating it in reverse but a lot of the, you know, the atmospheres, the temperature, the material selection that it's working in are the same pretty much. So really we're in a we're in a phase of now maturing and optimizing but but not it's not new invention. It's not, you know, it's not starting from scratch.

39:01 It's a very mature technology basis which we're just moving into a new application area. There we go. Sorry. The unmute wasn't working for me. And, Gareth, I mean, when we're speaking about derisking these projects and and and getting first investment, we have large kind of investment decisions into solar oxide. I wonder if you can maybe elaborate on on the potential balance of plant savings and and and the big areas or the big building blocks of of where you would see the save come for the project developers. So, you know, maybe on the on the on the renewables that might be needed, the lower levels of installed wind and solar, potentially talking about the substation, which should be the point you made earlier. Just just to really ram that point home would be quite helpful. Thanks. Yeah. I think so. Think made yeah. Like like you used to, we made the points on the the the saving electricity consumption and saving electricity cost the life of the system as well. So we can hammer that bit home.

39:59 And if if you think about it, the one of the biggest costs you do completely greenfield, and and one of the things is a lot of these projects require the renewables to be built. Okay? Those renewable costs are the same as the big industrial plant. They cost a lot to build the renewables. So saving 30% on your renewables, actually, your overall project cost goes down massively by having that efficiency versus alkaline of the the current alkaline of PET. And one of the other key bits is the construction cost. The construction cost is really high. Don't don't just look at the module cost. The electronics module cost typically is 1.8 to two times that to get you to what a facility cost is. And that that facility cost is a big chunk of that is actually the construction phase. So being able to minimize that by making the part modular really helps. Now the way LNG facilities and this is a kind of an analogous piece where LNG's got to a stage where it's cookie cutter part design where they have these huge modules, you know, 30 meters by, maybe, 100 meters in terms of area and weighing tens of thousands of tons, and they're just picking them up, building them, and dropping them onto site.

41:04 Now what we've looked at with CERES is, right. Okay. What is our mass repeatable unit that I need to get and that I need to make that very transportable? And then what you can do is you can build up these huge modules if you wanted to to drop them on-site. So it's it's changing that that change in, like, in thought process about the whole design of the electrolyzer really helps drop down a cost and make it more applicable to the developer. So we that's that's that's some of the bits that we came to know. Maybe a good time to open up to some of the the q and a that just come through on the line or through the platform. And and first, moving to the the recent contract that you announced or CERES announced with with Shell to design that 10 megawatt pressurized module?

41:51 And and can you just give some more color on the work that that's been going what will go on for CERES here? What what what exactly will Shell be paying for? And and what else might you be contributing to that contract. Yeah. Any color there? Yeah. Of course. So as you're aware, you know, we're we're testing our first of a kind technology demonstrator at Shellside Bangalore. And as a next step, effectively, we're we're leveraging the work that we've done with Gareth and the team, taking that starting point as a a as reference design, but then transferring that to Shell to get their input on on that. Now they're looking at particular use cases and end uses of the equipment.

42:38 They're also looking to bring their own differentiation to to their projects as well. And that's really how we how we work at CERES. You know, we'll we'll we'll take a reference design, a starting point that we've we've done a fair bit of work on, fair bit of thinking around, but work with our partners to see how they can bring differentiation to to the design. Maybe they'll have some suggestions about how best to design the stack array module or the electrolyzer module, how many of those are required or what the what the overall plant design is gonna look like. So it's a first step in that direction. It's a it's a six month design study to to get to a point where, you know, they may well then take a a further decision to to move move forward with CERES into something a bit a bit bigger and a bit more, you know, tangible.

43:28 Okay. Super clear. Thank you. And another question on the the module size. So building in units of 8.6 megawatts in size that will, you know, scale up to to give the 100 megawatt offering. And I know, Gareth, you you did mention during your remarks that that maybe that there is a limitation on size for for how big the stacks can go in in solar oxide. I just wondered if and there's a question that's come in. Will you build in ten megawatt modules, or will you keep at these 8.6? You know, will that 8.6 gravitate up towards 10? You know, how are you guys thinking about the the system and the modular design? I did the only thing now. The there is definitely you you're able to go bigger than 8.6.

44:15 Right? There there is an ability to increase the size of that module. I mean, at the moment, we've got there's sort of 12 sounds in that module, and there's ability to add more to that. There will come a limitation at the point where the pipe would get so big that you then have to start using things like expansion bellows and things like that. And we're trying we've managed to avoid that so far, and that's kind of where we're we got to with with the size of that. Now if you increase the size of the stack inside by, say, you're going from 30 to maybe forty, fifty kilowatts within the same vessel, you then suddenly go you're jumping right into the 10 megawatts, 12 megawatt size for those 12 SAMs. So there's there's a bit of a constraint in terms of the pipe expansion, those type of things, but there are there are ways that you can increase that module size even further.

45:07 I think John might wanna I don't if you like talking about that, but there's each round of stack really helps them. Yeah. Abs absolutely. So there's flexibility then. We we perfectly kept the electrolyzer module, you know, rectangular. You know, if you wanted to add some more stack array modules on for whatever reason, then could. There's also a question around redundancy and maintenance and taking modules down for maintenance on an overall plant level. So, were looking, you know, for the particular study that we showed the video around, we were looking at 100 megawatts, so 12 electrolyzer modules and thinking about if you had to take one down for maintenance, what would you be okay with in terms of a reduced capacity for a period of time and that was a bit of a consideration in that overall concept. But there's no real limitations. I think, again, from a with the stack, what we're trying to do is keep the stack platform common at the moment. So, licensees with factories who are making SOFC stacks could use the same factory to make SOEC cell and footprint. There's a lot to be said for commonality in that approach and that's really why we ended up at the stack array module because, you know, SOEC stacks tend to be, just by their nature, smaller than alkaline stacks.

46:23 Right? Alkaline stacks are enormous. Right? But we were packaging stacks into into the pressure vessel there. And and then, you know, for for for the RAW design study, you know, that's that's 720 kilowatts, you know, in a in a in a pressure vessel. And basically, that's like a super stack. Right? So it looks exactly like a stack to a process process designer and it doesn't really matter what's going on inside it, to be honest. It does exactly the same thing. It's just got higher power input, higher hydrogen output. Yeah. I think one one thing to note on that when people think about it is that that seven twenty is quite a little bit closer to a megawatt when you compare it to alkaline in terms of production capacity. So you'd to put a megawatt size stack in there. So the 8.6 megawatt of electrolyzed capacity that we've got there is equivalent to a much bigger alkaline plant in terms of production rate, easily over 10 megawatt. So just to keep that in your minds when you when you're thinking about it, don't always think about the megawatts.

47:23 The megawatts are meaningless in terms of production. The production kilograms an hour is what's key because that's what you're really trying to put into your facility. So just thinking about that when investors are looking at it is not is not one for one when you're comparing alkaline and pen. You gotta look at the efficiency. And alongside that, would is there any comment you can make maybe on on the sort of the current density? I mean, equally playing into into the footprint being being that much smaller. I mean, compared to alkaline or or or your most basic sort of atmospheric alkaline, I would consider that that the solar oxide has has a higher current density in terms of maybe amps per per centimeter squared or or amps per meter squared against against the alkaline guides. But I don't know if you've I mean, you have previously given that analysis. I just wonder if that's if that is the case.

48:10 Well, so you can get into a bit of an academic conversation around cell current densities and it's all quite interesting. In fact, I mean, the CERES the CERES because we'll operate at lower temperature than high temperature SOEC, we we we have a lower cell current density but but then our cells might be a bit closer together in the stack. To be honest, by the time you've designed them into the array modules and the electrolyzer modules, that cell current density gets massively diluted into the sort of footprint of deployable equipment that we were looking at earlier. And it doesn't really, you know, by the time you've got to that scale, you don't really care about your cell current density. What you care about is your CapEx, your OpEx of course and your land use.

48:57 Some of the stuff, I mean, Gareth you did a bit of looking into this really comparing, you know, we talked about that 120 square meters for the electrolyzer module in terms of how much hydrogen are you producing per square meter of land. Right? And I think we're out pretty favorable in terms of our our production density, think, Gareth. Yeah. I think we were comparable or better than alkaline from memory. I think pen, in choosing this this is a little bit a little bit higher density, but I think we were at a million miles away from some pen manufacturers depending on which ones you looked at. And it all comes down to how they do their balance of plant as well. So you you do. If you looked at a smaller scale, they're quite comparable about as you scale up. If that if that company hasn't done the vertical scaling of their balance plan, then their footprint explodes as well. It doesn't it doesn't stay the same. You get a much more linear a linear increase in that was actually take that off quite a bit by doing the design methods that we've used.

49:56 And on follow-up question was coming in on on the on the pressurization of the stacks. Will you also continue to develop, you know, atmospheric non pressurized SOEC modules, or or will everything in the future probably be designed to be pressurized to that sort of two bar stack level to then go to 30 bar? Well, look. I mean, that's the direction of travel that we're looking at at the moment. But again, we're a licensing company. Right? So so if an if a company wants to make atmospheric SOEC, then they're absolutely welcome to do that and we would we would sell them a license to do that. Absolutely no problem at all. It's just, you know, for our studies we see in terms of industrial applications, industrial integration, we see a real advantage of being able to have a reference design of the technology which can operate in a pressurised manner, but it doesn't have to.

50:52 That makes sense. And, Garrett, I mean, I I wonder for the hydrogen hubs, if if nuclear has has been involved in your hub. And and if it has, I mean, nuclear obviously would have some key I mean, clearly, waste heat is present quite a lot. Some key attributes to be associated with what if you were to build a plant really close, that would make a lot of sense. So have you seen a lot of studies that that are starting to take place on nuclear, or is it still very early for nuclear and solid oxide to be paired together? Oh, I've seen quite I've seen a couple of studies now. We've we've done some studies ourselves, and we're also actually doing a study at the moment a little bit based on CERES' technology actually for integrating with our own nuclear power plant design. So, yes, like you said, you have steam available and you have electricity available. So both of those things are are the key inputs.

51:44 In terms of the in the hub, no. There's nothing to be one nuclear power plant in that part of The US, meaning there's huge amounts of hydro. So Pacific Northwest has that. But other plants in The US what what what people don't realize is that nuclear power plants actually most large thermal generating plants actually use hydrogen on-site to actually cool the generator units and the coolest data. And some of the plants in The US are actually importing liquid hydrogen in large trailers two or three times a week just to cool to cool the bait of the power plant with hydrogen. So they're well nuclear power plants are well affected using hydrogen on-site. So there's no there's no general issue with integrating this with it like you would any other industrial facility. And it's a good partner because it can run all the time.

52:30 Basically, they run with, you know, 95 to 97% capacity factors on on nuclear. So, yeah, I I think nuclear is a good use case. I think if you can get if if you get to the right ones, to the right power price so a lot of the the fully depreciated plants in The US, they've got their very low constant power prices. They would be great to integrate with to develop hydrogen for industry, I think. And, Gareth, I'm just thinking now about you know, obviously, we've we've spoken about the different technology classes. We've spoken about the scale up and the opportunity for solar oxide. But but what have been the main sort of challenges on the engineering side with with solar oxide as a technology class? Are there still hurdles that need to be jumped over? Yes. A question here, just just asking, you know, what are the negatives?

53:19 Give me the downside. Right? You know, what what could potentially be the weaknesses for the technology? We know the weaknesses for for alkaline is is potentially a lack of flexibility. Also, very big unit size is hard to move around, potentially hard to service. We know that that that PEM can be expensive. Iridium is is present, and and maybe serviceability might also be a challenge and recoverability of of the Iridium. What what what kind of stuff should we be thinking about on the electrolyzer side that that you think could be a challenge for solid oxide? I think I think one of the one of the challenges for solid oxide is the the life of which the stack lasts for. And some of the stuff we've been working with CERES on is really helping, and we hope to extend that out, I think, quite significantly. And that that adds to costing because you're probably changing it out maybe once or twice extra in the life of the plant versus an alkaline or pen stack.

54:13 But that's why you you you weigh when you can do the the overall analysis, you still end up with 10 to 20% lower cost hydrogen even when you account for that those change outs. So, John, I don't know if you wanna comment on the the stack life and those sort of things maybe. Yeah. I think you're right. So so certainly, solid oxide is is in terms of its technology class, you know, it's been seen as quite expensive from a CapEx point of view because of the materials issues and and and those sort of things. And robustness, not just in terms of just general durability, but also in terms of cycling. People say, oh, you can't, you know, you can't you can't firmly cycle it. You can't load follow, etcetera, etcetera. Now, not all those things are true actually. So so we can certainly load follow, but ramping up ramp it so the example that is normally used is like, you know, you've got you've got a wind farm and you're using curtailed wind and you want it to ramp up when the wind blows and then shut down and how are you going to ramp the temperature up and down in time?

55:17 And that's sometimes one of the questions, right? But actually for Solid Oxide I think you would keep it at temperature so you warm it up and you leave it at hot idle we call it and it's just ticking over and then when power's available it operates and then it ramps down again. But you know, the point being really that Gareth alluded to the point earlier that actually if you've got an asset, you've an electrolyzed asset you spent many millions of dollars or Euros on, you want to be sweating that asset massively and that's really where, you know, you'd use it for an industrial application. You're really getting the most out of it in that regard. Now, of course, I suppose we at CERES are trying to address some of those issues in terms of our technology.

56:03 So trying to approach the the cost, the CapEx cost by the lower temperature points and also the robustness too. So so it's not a purely ceramic high cost stack which is quite sensitive to thermal shocks. We've got a we've got a steel architecture, which is actually quite robust to plant trips and shutdowns and and emergency stops and those sort of things. So so that's kind of what the angle that we're trying to take is that actually we're trying to adjust address some of those downsides of solid oxide through our particular technology basis. Yeah. And I suppose I'd also add from from an industry point of view, you know, PEM has been developing. So stack stack life has improved for PEM. Yep. You know, you're still probably on that journey in terms of stack life for some of oxide. And you guys are at that lower temperature level. So would that potentially help as well on on on stack life? Or is it pretty similar across the different competitors that you will see in the market? It it does.

57:03 And it also the the other point I'll make is it's plant life really. You're you're worried about not not Stack Life. So so clearly Stack Life is important, but if you carry out some fairly good approaches in terms of your overall plant, you know, making sure that your the steam coming in is of a certain quality, really trying to reduce the ways poisons can get into the stack. I mean, something we're looking at is actually do do you need airflow? Do you need airflow at all? You know, because that's definitely a the way that poisons could be introduced into into stacks. So so, you know, thoughtful plant and system design can really improve anything a bit like a car really, you know. You wouldn't run a car without a fuel filter or an air filter, you know. And it's the same with stacks, you know. You've got to select materials correctly, get the right filtration in place, get the right operating strategies and then, you know, you can actually see some really significant, you know, overall plant lives.

58:06 Just coming up on the hour. So last question to to wrap it up. Question coming in on on on the largest electrolyzer stacks for solar outside out there at the moment. So it's a four megawatt system maybe from Bloom Energy. When do you believe CERES could be in place to deploy their first 10 megawatt unit with a partner or or 20 megawatt system? When when when do you think that that would be feasible if a if a partner came knocking the door today to ask? Right. Well, great question. And I think that's really what we've been working towards, you know. So the work that we've been doing with with CAF, we've got that reference design available now. So so that that 8.6 megawatt, you know, design is now ready to go into into detailed design. You know, we've got stack manufacturing of that capacity available, and we're just gonna start building the first stack array module prototype stack array module this year.

59:00 So next steps are exactly that, finding a commercial pilot project where we can site that 10 megawatt scale commercial pilot. Lots of conversations going on at the moment. Haven't got a definitive answer to that question just yet, but that's definitely our next step. Brilliant. Well, a great place to end. Thank you both, Gareth and John, for your time today and for the audience participation for the very insightful questions. And I'll now pass it back to Paul. That's great, Chris, Gareth, John, Elizabeth. Thank you once again for updating attendees this afternoon. Ladies and gentlemen, could I please ask you not to close this session as we're now automatically redirect you for the opportunity to provide your feedback in order the company can really better understand your views and expectations.

59:46 So it'll take a few minutes to complete, but I'm sure it'll be greatly valued by the company. On behalf of CERES POWER HOLDINGS PLC, we'd like to thank you very much for your time this afternoon. Good afternoon to you all.