GIG: First established in Patras as a company specialised in the application of fuel cell technology, Advent Technologies is on a fast-growth trajectory, having undertaken a number of international company acquisitions while recently listing on Nasdaq. Can you tell us a little bit about the company, its current priorities and strategy?[roundtable-person][/roundtable-person]
Gregoriou: Thanks for the opportunity. Advent is a global and innovative company in the renewable energy business, meaning that what we make and everything we work on is focused in one direction: decarbonising the world as fast as possible.
One of our key products are hydrogen technology fuel cells. This is a flexible and versatile technology that creates clean energy, contributing towards the ultimate zero emissions goal. While the fuel cell was invented some 180 years ago, its commercialisation only materialised during the past 30 years. In fact, there are no more than 10 listed fuel cell companies – globally – right now, delivering four unique fuel cell technologies. And the same way there are multiple types of batteries: Alkaline, nickel, and lithium batteries, for example, there is also more than one fuel cell technology.
With that said, we believe our technology boasts the greatest potential because we provide fuel flexibility and temperature flexibility. And due to the strategic and historical moment we’re living, we are able to cater to a global market. On the one hand, citizens and governments understand that we need to urgently transition to low carbon economies and reduce our reliance on oil and gas, and on the other hand, the financial community understands that they need to back clean energy technologies with the right amount of funding.
The fact is people are done with diesel generators, which is the backbone of the way we create energy today. If we phase this out, we’re left with two options: Batteries, but batteries can only cater to small-scale energy needs, which leaves a void in the market for large-scale energy supply. And this void can be addressed by fuel cell technology.
So, in my opinion, we’re going to see exponential growth in the sector over the next 10 years – much more than most people anticipate. It’s going to be similar to the expansion of mobile phone technology. In the mid 80s, nobody foresaw that mobile phones would penetrate the market the way they did by the turn of the century – even McKinsey was off.
As for our strategy, it’s very simple. We decided to accelerate our business plan; we had planned to undertake acquisitions but were going to do so a little later. However, since the opportunity to raise money came about, we went ahead and consolidated the field. There were actually two companies – initially customers of ours – that we acquired. One of them was European while the other company was from the U.S. The European acquisition resulted in the absorption of three companies under the same entity: a Danish company, a German company, and a Filipino company. The U.S. acquisition, on the other hand, was a California-based entity that sells – mostly – to the U.S. military.
And the real added value is that these acquisitions have created a multiplier effect.
For the first time we are able to cater to the needs of the entire value chain – starting from the components through to the final systems and all the way up to their use in very big applications.
GIG: What drove you to take the company public in the U.S.?[roundtable-person][/roundtable-person]
Gregoriou: There are several reasons behind this. First is, of course, the capital. We were able to raise $160 million, which is a lot of money, even for U.S. standards. And secondly, I had always wanted to list a company on a Western stock market because of the visibility it provides. And the reality is there is no better stock market for a technology company than Nasdaq. All of the leading companies are there – around 3,000 of them – meaning we’re in the big leagues now, and Advent is on the world stage.
I'm very proud of this achievement because we started the company from scratch, and Advent is a true success story. We knew there were risks but I would prefer to have drowned trying than to ask myself ‘what if’? So when we saw that opportunity, we took it.
GIG: Although Advent moved its headquarters to the U.S., establishing a research and production facility in Massachusetts, the company retains its research activity in Patras. On the other hand, through your recent acquisitions, you now have innovation centres in Northern Europe and California. What is the contribution of each of these research arms to Advent’s innovation and research efforts?[roundtable-person][/roundtable-person]
Gregoriou: I believe that's my biggest challenge, post-merger: Integrating all of our teams. And I think every merger struggles with the same issues. However, in this case, we’ve know each other and worked together for a long time, and everybody has a complementary role with respect to each other.
So we started in Greece and developed our own tech, but now we have a lot of operations in Northern Europe, which produce a similar technology to what we originally developed. We sell to Asia because that's the jurisdiction that we're most ready to sell to. And in the U.S., because of the new relationship with the Department of Energy, we have an incredible technology that we're trying to commercialise. So we're trying to commercialise these technologies as fast as possible and our teams are in constant contact. But it is a challenge to be efficient post-merger.
GIG: How does Greek human capital compare to, for example, U.S. human capital?[roundtable-person][/roundtable-person]
Gregoriou: Greek human capital is very good – and when it comes to technology, it’s superb. Keep in mind this is a buyer's market where it’s 20 times easier to hire talent than it is in California. As a company, we have the capacity to hire top talent because we do very innovative things. People want to work with us, and we’re very selective. So, at that level, I can fairly say there really isn’t much of a difference with respect to the talent. What the U.S. has in its favour is that it’s more market friendly.
GIG: How can fuel cell technologies and hydrogen energy contribute to the reduction of CO2 emissions?[roundtable-person][/roundtable-person]
Gregoriou: Our fuel cells are hydrogen fuel cells. But what does this mean exactly? A fuel cell uses hydrogen as an input and produces clean energy and heat as an output. It's a very efficient machine. To put things into perspective, an internal combustion engine – which is very dirty – has an efficiency or approximately 30%. Our fuel cells, on the other hand, reach an efficiency of up to 95% when electrical efficiency – amounting to 50% – and heat – approximately 45% – are combined.
So, the first contribution of fuel cell technology to the reduction of CO2 emissions is via improved energy efficiency.
Our fuel cell is three times a better machine than an internal combustion engine and this is because it’s an electrochemical device.
It’s a lot more similar to a battery than an engine, the difference being that a battery is a storage device. A fuel cell, on the other hand, is a fuel-based generator of electricity – that doesn't burn things. In a sense, batteries and fuel cells as two sides of the same coin – one creates energy while the other stores it.
Secondly, hydrogen is carbon free meaning it's the ultimate solution and a true zero emissions technology. However, hydrogen in its pure state needs to be created and for this process to be CO2 free – constituting what we call green hydrogen – two things need to happen: first, it needs to be produced through the use of pure renewable energy sources, and, second, it needs to extracted from water through a process called electrolysis – which entails breaking water down into hydrogen and oxygen.
Once this process has been completed, the resulting hydrogen is introduced into the fuel cell generating CO2 free electricity and heat. And Europe is very committed to developing this technology.
GIG: While steps are being taken by the EU to kickstart the development of a hydrogen economy, blue hydrogen costs an estimated two times more than grey hydrogen, while the cost of green hydrogen is approximately five times higher. When do you expect hydrogen production, particularly that derived from renewable energy sources, to become more cost competitive?[roundtable-person][/roundtable-person]
Gregoriou: It is true that fuel cell technology has not progressed sufficiently to produce cheap green hydrogen. However, as is the case with any product, there are two things that are very important to customers: price and longevity. So if you drop the price and increase the longevity of a product, you're making a product that is cheaper and lasts longer, in effect increasing the value proposition for customers. This means more people will buy the product. But how can we achieve this? There needs to be a boost, meaning somebody has to pay what is called the funding gap – either the early adopters or governments. And it’s expected that hydrogen will be a subsidised technology, which is a good thing – remember oil and gas is still subsidised 150 years later.
In this case, the government is stepping up. Europe is doing so through these big marquee IPCEI projects (Important Projects of Common European Interest). In fact, we're very close to receiving the final notification about the White Dragon project, which is exactly that.
So, the way it works is that the private sector has the tech, and by funding these mega projects governments know they will enable the further improvement of technologies. As a result, prices will eventually drop significantly over the next five to 15 years – maybe tenfold, or even 100 times. Meanwhile, the infrastructure to move the hydrogen will be ready and machines incorporating fuel cell technologies will be used to produce energy and heat.
So, in my opinion, it’s myopic to think about how expensive green hydrogen is today because otherwise we’ll never progress as a society.
Just take photovoltaics as an example, and how expensive they once were. What’s exciting is that the technologies are available and Europe has the will to deliver a final solution.
The United States, for its part, has a lot of natural gas, so we’re looking at a solution that creates hydrogen through the use of this fuel – so called blue hydrogen. It’s not 100% clean, but it's cleaner than where we are now. Anything in the right direction is welcome.
GIG: What role do you see hydrogen playing in the energy mix of the future?[roundtable-person][/roundtable-person]
Gregoriou: I think hydrogen will play a very important role in future energy mix and the actual numbers will be a result of two things. The first, as I said, relates to governmental intervention – in the best sense – and how many of the targets the EU has set out to achieve are actually delivered upon. Europe has committed to invest €500 billion by 2050, and €350 billion by 2035 – all geared towards the development of a hydrogen economy. These are massive numbers. If they stick to these, we're going to make a lot of progress.
The second aspect relates to the pace of technological progress, which is something that cannot be scheduled or forecast. The reality is oil and gas will be with us – globally – for a long time. But hydrogen is going to be a significant player.
GIG: You referred to Advent’s involvement in Greece’s White Dragon project, which aims to develop a green hydrogen project in Western Macedonia through a collaboration between many of Greece’s flagship energy companies. What role should we expect Advent to play?[roundtable-person][/roundtable-person]
Gregoriou: I think we're playing a key role, because we're the project’s technology provider. In addition to the White Dragon, we have a sister project under the umbrella of the White Dragon called Green HiPo through which we produce the electrolysers and fuel cells that are used in the White Dragon.
So, White Dragon, as you said correctly, is a consortium between Greece’s largest energy companies and Advent. We're not an energy company; we're a manufacturer of renewable energy systems.
In essence, White Dragon is a large-scale power to gas project, where hydrogen will be made from renewable electrons. We’ve received the pre-notification and the numbers are big.
We're very confident we can materialise the project with the right funding. And we're looking forward to receiving the final notification and understanding the definitive figures. Then I'll be able to comment much better on what this project means to us.
<strong>GIG: While Advent has gone global, the company has expressed its commitment to continue supporting and investing in its home market. What are your plans in Greece? Where do you see the biggest opportunities from an investment point of view? </strong>[roundtable-person][/roundtable-person]
Gregoriou: Our plan is to have a large-scale operation in Greece associated with the White Dragon project. However, and irrespective of this project, we want to invest heavily in the market because we want to invest in the country’s human capital – it’s a brain gain campaign – targeting Greeks living in the country and those residing abroad who, given the right opportunity, would be willing to return.
Assuming the White Dragon project rolls ahead, our plan is to build a manufacturing facility in northern Greece that will generate hundreds of jobs. This would be a significant milestone even though we already have a little bit of manufacturing in Greece.
GIG: As a prime example of a Greek-born technology company that has gone global, in your opinion, what needs to happen for us to see more ‘Advents’ in the international arena?[roundtable-person][/roundtable-person]
Gregoriou: First of all, I think the Greek stock market has to undergo a massive overhaul. All of the stock market’s products and banks cater to big companies with low grade debt. And what kind of collateral can you provide if you're a company with a small team? None. So, boosting companies participation on the stock market is one route that I strongly believe in. This is one of the reasons why we listed in New York, but the Greek stock market should provide more facilities and greater capital for IPOs.
Secondly, we need more success stories and to communicate these stories. For example, now that Advent’s listed on Nasdaq everyone can follow what we do and how we got where we are today. So, we need to make more of an effort to share stories about the Greek tech ecosystem.
If you see the combined valuation of the tech sector – the Upstreams and the Advents – we're in the billions now and Greece is a small country.
So there are a lot of stories; it’s matter of getting the stories out there.
GIG: What message would you send to international investors considering investing in Greece?[roundtable-person][/roundtable-person]
Gregoriou: The reality is Greece has gone through a lot. What happened to Greece a decade ago was very unfair. But bearing in mind the struggles the country has been through, its recovery can be that much more amazing – we could be looking at 5% growth over a 10 year horizon. With that said, Greece has many interesting investment opportunities, particularly in the tech and tourism sectors. It has undervalued assets. If you go somewhere else you’ll buy at a premium – in Greece you’ll buy at a discount. Just do your due diligence, come to Greece and see for yourself – it’s a great place to invest and spend your time.