Ep69 Beyond Hype: Making Green Molecules Commercially Viable, ft Alexander Tancock, InterContinental Energy

How do you scale green hydrogen from a laboratory curiosity to industrial reality? Alexander Tancock, CEO of Intercontinental Energy, reveals the breakthrough P2H2 Node system that’s turning massive renewable projects into factory-produced “Lego blocks.”

With numerous projects across three continents and backing from strong financial partners, Intercontinental Energy isn’t just making green hydrogen—they’re creating green iron to decarbonise steel production and building new trade corridors between Australia’s vast renewable resources and Asia’s industrial heartlands.

Alex shares why the hydrogen hype faded, how government partnerships became crucial, and why 2028 could mark the tipping-point for commercially viable green molecules at oil- and gas-scale.

REF: InterContinental Energy

ABOUT ALEX: Alexander Tancock is the CEO and Chairman of the Board of InterContinental Energy, a global leader in large-scale green hydrogen development who has been at the forefront of the industry for more than 10 years. Under his leadership, the company has pioneered a portfolio of groundbreaking projects, with its three flagship projects attracting partnerships from some of the largest names in energy. With backing from major institutional investors like GIC and Hy24, InterContinental Energy has established itself at the forefront of the green molecule sector. The company’s innovative team and approach extend beyond project development, and into giga scale enabling technology through its patented P2(H2)NodeTM architecture. Alex's expertise and strategic insights make him a significant voice in the energy sector.

FEEDBACK: Email Host | HOST, PRODUCTION, ARTWORK: Joseph Jacobelli | MUSIC: Ep0-29 The Open Goldberg Variations, Kimiko Ishizaka Ep30-50 Orchestra Gli Armonici – Tomaso Albinoni, Op.07, Concerto 04 per archi in Sol - III. Allegro. | Ep51 – Brandenburg Concerto No. 4 in G, Movement I (Allegro), BWV 1049 Kevin MacLeod. Licensed under Creative Commons: By Attribution 4.0 License

Transcript

***PLEASE NOTE: The text is an automatically generated transcript and may contain errors. For accuracy, only rely on the original recording.***

Episode 69. Beyond Hype: Making Green Molecules Commercially Viable, ft Alexander Tancock, InterContinental Energy

Joseph Jacobelli:

Good morning, good afternoon, or good evening, wherever you may be. Welcome back to the Asia Climate Finance Podcast. I'm your host, Joseph Jacobelli, exploring the long-term trends, shaping climate finance, and the energy transition across Asia and beyond. Today is episode number 69, and our guest is Alexander Tancock, chief Executive Officer of Intercontinental Energy, a pioneering company developing some of the world's largest renewable energy projects across Australia and Oman and emerging markets with a focus on producing green molecules at oil and gas scale. The episode is related to, episode 67 Australia's Green Hydrogen Reality Check with, uh, Nick Smith. From Global Decarbonization Advisory who shared critical insights into the challenges facing Australia, hydrogen ambitions.

So, uh, if you're interested in green hydrogen, definitely should listen to that, that that episode first. Today we're diving in deeper into the technology making industrial scale green hydrogen production economically viable. The. P2H2 node system, which breaks down massive renewable energy projects into standardized factory produced modules that can be deployed at scale.

So please enjoy the episode. Uh, please do reach out if you have topics or questions or any comments. Our email is at the top of the show notes. Enjoy the show.

Joseph Jacobelli:

So Alex, hello and thank you so much for making the time. Had to wait a while to get you, but I know you're a busy guy and we'll find out in a minute why you are so busy. How's everything?

Alexander Tancock:

No, very good. Very good. Look, it's a real privilege to be on your podcast. It's been a long time since we've known each other, and I've been listening to some of your previous guests and it's very interesting what you cover.

Joseph Jacobelli:

Well, thank you again for making the time. Alex, we've got your bio in the show notes as per usual. Could you tell us a little bit about you and how you got where you are and kind of like a little bit about your journey and also your interest in green energy in general.

Alexander Tancock:

Sure. So look, I've been in the renewable energy sector now for some 25 years. Started in Europe, then moved into Asia where we in fact met, must have been almost 20 years ago doing renewable energy projects through the greater China and Asia Pacific region. I've tended to look towards the future of energy projects in the renewable sector.

So I was a very early developer in Europe. Became a very early stage developer in Australia, then in Asia Pacific. Developed the largest wind farm in the world at the time in Australia back in the day, developed some early offshore wind farm work in Asia, very large scale projects in China when we met each other.

So it's really, tending to look maybe a little forward to the next wave of renewables. And then, 10 years ago, launched this company with some other co-founders, looking at really, even larger scale for renewables moving forward. So that was the genesis of Intercontinental Energy.

Joseph Jacobelli:

Right. And I mean, 25 years ago, wind was still very new I think people were not as enthusiastic about wind. And now it's kind of like mainstream renewable, both on shore and of course offshore. It's becoming more mainstream. Could you tell us a little bit about the company?

Some people may know about it, but I don't think everybody knows about Intercontinental. So if you just could, just a very brief, high level history.

Alexander Tancock:

Sure. So this company was launched with the objective of kick-starting what would be very large renewable energy projects.

So renewable energy projects at oil and gas scale. We did a global search for projects, in jurisdictions where we thought we could do large projects. We ended up developing projects in the Middle East and Australia, and our vision has always been to do again, really big projects.

And it's not just focused on one product. So, as we'll talk about in a minute, at one of our hubs, in fact, two of our hubs where we'll be generating electrons as well as molecules. But I think what became clear some years ago was that when we looked at the energy supply chain, a third of it roughly is electrons.

The other two thirds of it is molecules. And if we were going to move to more sustainable, cleaner molecules, that was an opportunity that was very well suited to these large scale projects that we've been looking at. So as well as looking at sort of electron phases in the early days, let's say, our projects are really aimed longer term at molecules.

So what we now have is 60 projects across three areas. And really, it's moving those projects forward. So, we've got investment from GIC, the Sovereign Wealth Fund of Singapore. And Hy 24. Hy 24 is the world's largest dedicated hydrogen fund. So they're institutional investors in the company.

We have a partnership with Shell, OQ and EnerTech in the Middle East. Until recently, we had a partnership with BP in Australia. But obviously BP is taking a step back from renewables globally. So they've already signalled they're exiting that project.

Then our third energy basin, we've got emerging partnerships, which hopefully we'll be talking more about in a few months’ time.

Joseph Jacobelli:

Got it, got it. So could we go back to the history a little bit, I think at the very beginning it was going to be green hydrogen in Australia, I'm talking about 10 years ago. And then it kind of like develop from there in terms of the renewables array and so on and so forth. So could we go back a little bit in time and explain a little bit about the actual evolution of the project, if I could.

Alexander Tancock:

So we've got three sort of locations where we've got our projects.

Where we started on day one was, I guess our thesis, if you will, was that if you had a very windy night and a very sunny day, you could achieve 70% or higher capacity factors from pure renewables. And then you could use that energy to do something useful. Our other thesis was that wind and solar would continue getting cheaper.

And sort of notwithstanding a small bump post COVID in supply chain costs, that thesis still looks intact, where wind and solar are continually getting cheaper. Thrown a bit of battery and that helps again in some ways. So that was the sort of the observation we made.

And then from there we said, well, where can you deploy large projects in markets that have the space, where you can be by the coast because there's no point being 500 kilometres from the coast, just at infrastructure cost. Where there are jurisdictions which are reliable have a history of doing large scale energy projects, et cetera.

So we developed, in the end, we sort of focused on three key hubs. There's the Australian renewable energy hub is the one in the Pilbara.

Joseph Jacobelli:

Alexander Tancock:

And that's the one till recently, BP's been a partner. That project is sort of focused on decarbonising the Pilbara. So if you think of the Pilbara, the Pilbara is responsible for exporting about two thirds of the world's tradable iron ore.

It is a huge energy consumer overall, the steel industry. And in fact, if you took all of the renewable energy in the world today, both wind and solar, and you took all of that capacity and you used it to decarbonise the steel sector, it would be about right. Every wind turbine in solar panel ever installed in history would be enough to decarbonise the steel sector only.

It's a phenomenal user of energy. And so if you take the Pilbara, if we use this Australian renewable energy hub, which could be about 26 gigawatts, plus or minus, that project would decarbonise around 4% of the Pilbara.

Joseph Jacobelli:

Mm 

Alexander Tancock:

So you look at the opportunity to decarbonise this massively energy consuming in emission generating sector.

And even a project as ambitious as this one in the Pilbara, you'd achieve about 4% of the exports, of the Pilbara only, let alone the rest of the world.

Joseph Jacobelli:

Alexander Tancock:

So there's a massive opportunity to decarbonise both from providing electrons and also providing hydrogen to make green iron. Which I'm sure Nick would've talked about, and others are talking about, so instead of shipping the energy as say, hydrogen or some derivative, you turn it into a product, and you ship the higher value product.

So that's one of our projects. The project in Oman, where Shell is now the lead that again is focused on providing clean electrons and clean hydrogen to what is also likely to be a green iron industry. So Oman already does the processing of iron ore, and because of the high volumes of iron ore, they get traded nearby.

The idea the government would like to see is that the vessels stop off in the Port of Duqm process the iron ore into green iron and a higher value product. And then move it on. And again, when we talk about the renewable resources that our projects, we're talking about, capacity factors of solar that are above 30%, and capacity factors of wind that are above 40%.

With that matching of windy nights and sunny days. So, you've got this huge amount of cheap clean energy, and we're now starting to see where that energy can go. And then the last of our three projects is really focused on ammonia as a product. Ammonia is used obviously in the fertiliser industry and other industries as well.

And then longer term, there are people that would like to use it as a fuel potentially. In particular, we're seeing quite a lot of interest from the shipping community at the moment, but some power stations and other sectors too. So each of our projects is really aimed at a slightly different pathway to market and commercialisation.

Joseph Jacobelli:

Wow. That's, yeah, since the last look at it, which was six years ago seven years ago when I was writing my first book, things have kind of developed and kind of got a little bit larger. Now getting into some kind of specific questions. The Asia Climate Funded Podcast is all about the long term. We don't really talk about very short term trends, but I think it's important to work out some of the current kind of news flow related to all these different projects given the so massive. Could you explain a little bit about the P2H2 Node system, if I'm pronouncing that right? And how will this node system impact global hydrogen production costs?

Alexander Tancock:

Yeah, absolutely. We're very proud of that work that we've been doing on the P2H2 Node. So you pronounced it correctly. And I guess, you talk about the projects have gotten larger, but it's sort of they've gotten larger by getting smaller.

And what I mean by that is, if you look at the very large scale energy projects, they're typically oil and gas or maybe nuclear at the extreme. They're very complex projects and they tend to have huge cost overruns as a result of their complexity. They tend to be very bespoke. Each reservoir is different. So each way of addressing a reservoir has to be different, et cetera. And nuclear power has also had some of those challenges, and many other types of industries do too. And so what we tried to do a few years ago was look at ways of breaking these complex projects into Lego blocks that become repeatable. So instead of developing three energy basins differently, why don't we develop a technology that can be deployed across these three different basins in almost identical ways.

Joseph Jacobelli:

Alexander Tancock:

And once you break these large projects into Lego blocks and where you can then, and what we're working a lot with right now is Chinese supply chain companies to supply the equipment that goes into our Lego block.

They just become repeatable and largely produced in factories. So, you take all of these midstream components that you would make the hydrogen from, electrolysers, the compressors, the cooling systems, and you effectively produce them in a factory, in skid mounted modules.

You bring them to these remote locations, drop them into place, and very few people are needed to then assemble it all. And by repeating it, you are taking out a lot of that bespoke cost. Because a lot of the cost in enabling infrastructures and design can then just be completely removed.

And so that's how we've addressed this sort of opportunity to do large projects is actually to break them into smaller projects. Then you also have the ability to finance them independently. So instead of trying to finance such a large project, which of course, the bigger a project is, the more challenging it will be, you're breaking them to more digestible chunks.

And anyone who's ever done anyone who's ever done infrastructure when it comes to mining or resources will know that the best place to develop a new mine is exactly right next to your existing mine. Because once you've built the first phase, you've taken care of all those enabling one-off costs.

Every other phase is just an extension, which means you're just paying variable cost. So think about it a different way. We could go all around the world and develop 60 separate projects, and I would need a team of 600 people, and we would have a development budget of 600 million a year.

Or we can just do three large basins where you have three smaller teams all using the same enabling P2H2 Node and you're just expanding each project once you've built it. So the first phase is difficult. The second phases and third phases are the cheapest phases on the planet.

Joseph Jacobelli:

What is the timeline of the final investment decision on the projects?

Alexander Tancock:

Look, we're aiming for 2028 still, on our first FIDs. In both locations. You talk about your podcast being long-term. Our project also has been a long-term outlook. It's always been a marathon, not a sprint. Large, complex projects, they take a lot of time. We've seen oil fields that have taken decades from discovery to production. In some ways we're more akin to one of those types of projects than a typical grid connected renewables project.

So yeah, so still on track for FIS before the end of the decade, and then projects coming online in the 2030s.

Joseph Jacobelli:

Got it. I read in the news flow that there was a recent funding from GIC and Hy24 have been deployed across projects. Something like 90 million pounds or equivalent US dollars.

Alexander Tancock:

Yeah, so you are referring to what was our series B investment round was with GIC and Hy24. Absolutely. And as we move forward, we're always looking if we can potentially bring in more institutional investors. As I mentioned before, Shell. And BP both decided to work with us on their flagship large scale green molecules projects.

We've got other partnerships with companies like OQ and Enertech, and more to come. So one of the themes I would say about this sector and I'm sure that others have talked about the same thing, which is that it's really about partnerships is critical. These projects are complex, and partnerships are really proving to be vital, both with financiers, with off-takers, with the supply chain.

And in particular what we're seeing, I think in terms of two really important pieces emerge more clearly now is government partnerships and I would say partnerships with China as a source of equipment and supply chain. The Chinese market, obviously dominates solar, is increasingly dominant in wind.

And it's pretty clear, I think, to most people in the sector that they're going to dominate electrolysers and they're going to dominate compressors and cooling systems and the rest of it too. So, one of the themes you are seeing at the moment is in green molecules that the Chinese market is the clear market leader now globally in terms of projects deployed, in terms of equipment being made.

So, that's an emerging theme that everyone's now sort of working around. And anyone who doesn't have a China strategy is going to have an issue, I think. And then the other one is government to government. One of the things, again, we think of renewable energy, we think of electrons, but two thirds of our energy is consumers molecules.

So this is a sector that absolutely has to be addressed through renewables. And if we look at the energy transitions that we've seen with emerging technology over the last six decades, right? I'll reference four in particular. So you've got the LNG sector that emerged, which is sort of tech enabled.

You have the nuclear sector which emerged, which was clearly all about technology development. And then you had wind, and you had solar. Now wind and solar have been around since the early eighties. And nukes and LNG for 20 years more than that. And in fact, they've all developed it roughly the same speed, which is about 0.07% of global energy per annum.

So no matter, you look at all the geopolitics, you look at the technology developments, the markets, setting aside all of those issues. For whatever reason, these four technologies have developed at a roughly similar pace overall on average, and one of the enablers. In fact, the key enabler other than sort of technology development was government assistance.

All four of these industries were massively subsidised at the beginning to get them off the ground and to make them viable. And I think one of the partnerships people underestimated in the early days of green molecules and I think we're probably as guilty as anyone else was the importance of the government partnerships.

And I think what we're now seeing is sort of this sort of the hydrogen hype faded because people realised the private sector couldn't do this on its own. And what we're now seeing is an emergence of more realistic partnerships between governments and companies, in order to make projects begin to happen.

And so you're seeing a lot of smaller projects taking off, the odd big project, NEOM in Saudi Arabia as a massive project. You're now seeing the emergence of these partnerships start to bear fruit. So, some smaller projects proving technology will work, larger projects proving it can be scaled.

And I think when we look towards the 2030s, you're going to see this confluence of this proven technology that's improved coming down the cost curve thanks to China. Meeting up with this government help to get a few projects rolling and the costs are really going to drop.

And once the costs drop, of course we enter a virtuous circle that we've seen in renewables already for electrons, where there's no reason to think we won't have cost competitive green molecules, by the end of the 2030s.

Joseph Jacobelli:

I spent the last 24 months writing almost exactly that, basically saying that the real first enabler is the government at a minimum, they've got to be on board. And some governments can be strongly on board. Some governments can be a little bit weaker in terms of their support. But that's like the very first step, and that's how you're going to bring costs down.

So we talked about the importance of partnerships talking about those partnerships, has the way that you structure the projects or the projects moving forward kind of changed with these new partners coming in?

Alexander Tancock:

Yeah, it is a very good question. And the answer is absolutely. The projects have evolved in ways we haven't necessarily foreseen. When we set it up again, the thesis was that the cheapest, largest scale green energy at the highest capacity factors would eventually find something useful to do.

And if we go back maybe three or four years. When the sort of hype cycling hydrogen was at its most recent high. There was sort of a view that hydrogen was this panacea, and it would be exported everywhere and used for everything. And I think what we've seen more recently is sort of, I think a convergence to more credible use cases.

So again, if I look at the Australian Renewable Energy Hub in the Pilbara. I think I would be surprised if we ever export a molecule from there that hasn't been processed first.

Joseph Jacobelli:

Alexander Tancock:

And so, green Iron is just such an obvious thing to do there. We avoid the cost and complexity of shipping hydrogen.

So, we just use it locally. Now you can see the use case for decarbonising. The Pilbara one can understand why a government would want to see that happen and one can even understand why the customers would want it. So if you take the steel sector, I'll give you a great sort of statistic as well, about three quarters of the energy consumption in steel production.

Is in that step to get to Green Iron. What comes after Green Iron is about a quarter of the energy consumption, but about three quarters of the value creation and job creation comes after Green Iron. So if you are China, Korea, Japan, outsourcing the production of Green Iron to a country like Australia, which is so well endowed with energy and space.

You don't actually lose a lot of your jobs in value creation locally, but you outsource that tremendous energy production and carbon dioxide production that they currently suffer from when they produce all this stuff with coal.

You outsource that to a renewable energy project in Australia. So now you are importing green iron, which is carbon free. Pollution free, and you're still capturing all that value add in jobs that you have currently. So one can see the symbiosis between that relationship where you end up with sort of a, people call it a trade corridor, you call it whatever you want, but you have this symbiosis where Northern Asia can produce the equipment.

Australia installs the equipment; Australia uses that equipment to produce a value added product cleanly and then ships it back again. So there's a really good example of how that trade can benefit everybody and therefore credibly, it will be, it's doable politically. So yeah, we've seen that sort of emergence as a result of our partnerships.

We work very closely now with the government of Australia, both at a federal and state levels in Western Australia. And of course, we've worked very closely with potential customers, whether there's steel companies or mining companies. Now, we can't talk openly about some of those partnerships yet, but in the months ahead, I think we will be talking more openly about some of those partnerships.

And the same is true in Oman. When we started developing the Green Energy Oman Project, with the government of Oman. It was the first project to be developed at scale, in the Middle East. And through that partnership with the government and their national energy company, OQ, we've seen the emergence of a lot of government plans in Oman to produce, whether it's yeah, green iron, ammonia, and other products.

So yeah, so those partnerships really are critical, especially in the early days. And I think if you go back to nuclear wind, solar or LNG, any of those four industries, the same thing was true then, right? The first shipments of LNG were point to point with huge government support. The first wind and solar projects only happened because of government support on offtake agreements for the power sector.

So yeah, huge influence with partnerships and hugely important to us.

Joseph Jacobelli:

So in terms of green steel I'm aware that China's been making some efforts, Europe, I think the Nordic countries have also been looking into it. So it really sounds like because of Australia and because of your project, we're going to be seeing.

Sizeable amounts of green steel by the early thirties or mid-thirties, so just five, 10 years from now. Would that be an accurate speculation? You're doing such a thing.

Alexander Tancock:

Yeah. I think that's a fair view to have. Now if you look at the two of our institutional investors, GIC and Hy24, they're both investors in a company which used to be called H2 Green Steel, recently branded to Stegra.

Joseph Jacobelli:

Alexander Tancock:

And that's a very exciting project. You're talking about 700 megawatts plus of electrolysers to make hydrogen, which is then used to make green steel with little emissions. And so, that's the sort of project that we're going to see more and more of in the world.

And interestingly, although the cost of the green steel's a bit higher. When you look at the cost of that steel, when it's embedded into products, I think, it's in the public domain, but they reference, for example, the cost of using green steel in a car adds about 300 US dollars to the cost of a car.

So I think we will see increasing amounts of green steel in the future for sure. Now, again, there needs to be, I would imagine some legislation. Whilst there are visionary companies, at the end of the day it's been legislation that has driven changes across pretty much every industry ultimately.

So I think we do need to see slightly more active governments in the future starting to legislate small percentages. We see it in aviation; we're going to see it in shipping where legislation is going to mandate increasing amounts of clean fuels coming into the supply chain over time.

I would imagine steel will end up being in a similar place. You see the Chinese government already being quite aggressive in terms of wanting to decarbonise and they're a massive consumer. They'll drive change.

Joseph Jacobelli:

I mean, at the end of the day, it's all about volume, right? I mean, if you remember.

When we were working together 20 years ago, that's a long time. Wind and solar was definitely not that competitive versus coal fired generation or gas fire generation. Where now in many, many, many jurisdictions around the world, it's the single cheapest form of energy. Even when you add energy storage because energy storage is coming down it becomes incredibly competitive. So there is a volume game I am sure with green steel, so it is at the end of the day, a volume game.

Talking about Oman, which is kind of my last sector specific or project specific question, how is Intercontinental energy addressing the domestic hydrogen demand in Oman itself?

Alexander Tancock:

So the Oman government is a very forward looking government. Like many of the governments in the Middle East, that they have longer term planning and master planning, and they do it very well in this region. And so their drivers, they look at the resources available in Oman, which from a wind and solar point of view or world class. They've got flat land, desert land.

Right on the seaside. And so they've understood the opportunity that green molecules will afford them. And what they've done is they've taken a very sophisticated approach to putting in place a regulator that also is there to sort of promote and activate industry.

And I think right now they're really focused on seeing electrons into their network to seeing how they can activate green molecules in industry. And that really then leads down to this green iron an ammonia pathway in the near term. So you can bring iron ore into Oman and process it into green iron and then it ships off again.

You could then build steel mills in Oman to then use that green iron. So once you start bringing in this sort of core you can start building off it. And if you think of the way, and I think a great example is Rotterdam, Houston, Jubail in Saudi Arabia, where because there's an amazing resource people have managed to develop industry around it.

Right. So you take Houston, Houston had all this oil and gas, and as a result it's become a massive petrochemicals industrial base. Rotterdam is a trading base and off that trading base, they built lots of business and industry and in Jubail in Saudi Arabia, it was a swamp 50 years ago.

Now it's a city of half a million people and it's the world's largest petrochemical hub. So, once the Oman government, I think, decided that this was a potential pathway for future diversification and in a sustainable manner. They're laying the steps to start building that pyramid, if you will.

So the foundation is this cheap energy, electrons and molecules. You then look at the first industries you can get off the ground like green iron, maybe some ammonia, some exporting of ammonia. Then you can look at how you industrialise around those locally. So the production of fertiliser, the production of higher value chemicals and industrials. Making steel rather than just exporting green iron.

So all of this value base can be built off these resources. And again, we're partnered with OQ, the only large scale hydrogen project in Oman under development that has the National Energy Company and also Shell. And then we've got also the Enertech, which is part of the Kuwait energy complex.

So yeah, so we're very committed to try and make this project in Oman happen.

Joseph Jacobelli:

Right, right.

Just one follow up question before we kind of wrap it up with some key takeaways. As the chief executive officer or major company, what's happening in terms of the geopolitics at times must be concerning. Now, our podcast does not talk about politics because it is not one of my areas of expertise and it's far too complicated. But some of the geopolitical hurdles or let's say. Minor earthquakes that have been happening, have been hurting the general direction of some projects. Are you concerned?

Alexander Tancock:

No that's sort of, if I take a step back, I've been in renewables now for just over 25 years. What I've seen is this sort of constant march. Up in terms of the growth of the industry and a constant drop in terms of the cost of our product to market.

Joseph Jacobelli:

Alexander Tancock:

Now, within those 25 years I've been in the industry, we've seen two hiccups or three really. Now where, for whatever geopolitical reason, one was the great financial crisis in the late two thousand. The other one was the European crisis in the mid-teens and then the COVID where we've seen the cost of renewables go up because of supply chain disruptions or finance disruptions.

But actually in general, the trend has been one of growth of industry, reduction of cost. And so, as I look forward, there's very little reason to believe that trajectory is going to change. The cost of equipment keeps dropping. Now batteries keep dropping and batteries, renewables work very well together as one would imagine.

When we look at the alternatives, again, it's hard to see how clean energy is not something that's on a continued positive trajectory. And I guess, our job as companies and the employees within companies is to keep moving forward and try and make our projects as cost effective as possible.

And sometimes these periods of difficulty are helpful because they force us to optimise, they force us to rethink how we do things, right. Challenge is the mother of all invention, right? So, because costs started getting more difficult, we were forced to be more innovative, which has led to the P2H2 Node architecture.

Right. So in a way, when there are periods of difficulty, it forces us as the private sector to be better. And then, as the trend continues moving forward, we're even better placed to move forward with our projects. So, no, in that sense, I don't see anything, and I don't think that the teams see anything to be too worried about on that front.

But ultimately, projects succeed or fail on metrics related to the projects. And what we have to do with our partners is continue developing the best projects possible. Now we have all the ingredients, right. We've got the biggest sites with the best wind speeds, the best solar resources in the best jurisdictions.

In some cases they're very advanced. The Asian, the Australian Renewable Energy Hub is still the second largest power station permitted in history after the three Gorges Dam in China. So we just have to keep delivering on these milestones. And ultimately the world needs clean molecules.

It's, we have no choice but to succeed. And that's very much our focus on the long term and on succeeding, because we need to.

Joseph Jacobelli:

That's great. And that's a great segway to the final question, which is, where are we going to be in 2050? Where are things going? And also do you have any kind of key takeaways from our conversation?

So I guess we can talk about the key takeaways first and then talk about your kind of long-term view of the energy world.

Alexander Tancock:

No, I think you've asked the right questions. I think your questions really homed in on the aspects that we as an industry need to address in terms of viability, in terms of how these partnerships develop, in terms of the markets, et cetera.

But sort of, I guess I look at history and whilst one can draw too many lessons, I think it is instructive. And again, if we look at the way wind, solar, LNG, and nuclear have grown despite all the variables in a very similar manner, which is, as I said, 0.07% of global energy per annum.

If we project that onto the hydrogen and green molecule sector, then by 2050 we could expect that 2% of the world's energy would come from green molecules. Now, is there a reason to believe we could do it faster? For sure. Is there a reason to believe it might take longer than we don't like?

Yeah, maybe. But just based on, I don't know. Is it an economic law? Is it a technology law? Is it geopolitical law? I don't know. But 0.07% seems to have been a pretty consistent standard across all these other technologies. So, 2% of global energy coming from green hydrogen and green molecules in 2050 seems a very reasonable expectation.

Joseph Jacobelli:

Especially when now we're talking about a localised usage of the green hydrogen as opposed to what was kind of trendy to talk about five years ago, which is exporting it which made a little bit less sense, right.

Alexander Tancock:

True, but the same was true with gas, right? Gas was a local usage, which eventually, when the technology caught up, became an internationally traded commodity using LNG. Again, I think it, there's every reason to expect that in 10, 20, 30 years, people will trade a hydrogen derived fuel.

Alexander Tancock:

But the near term economics are harder to make work than people thought. So I, yeah, I think where you have a local use case, it's always going to be better to do that.

Joseph Jacobelli:

The interesting thing, Alex, is that, I mean, obviously, both of us have spent the bulk, if not all of our careers in Asia.

And both of your hubs are kind of, well, one is Asia, Australia, if we take, Australia has been part of Asia, Oceania has been part of Asia, and then you've got Oman, which is the Middle East. So not too far away either. Do you see opportunities in other places like Europe for example, or we are going to stay pretty much with Asia because at the end of the day, I mean, Asia is 50% of total global energy consumption.

And 50% of the economy, 50% of population, et cetera. But do you see other potential hubs outside the, let's call it greater Asia area?

Alexander Tancock:

Definitely. The one thing that is needed to make green molecules using renewable energy as space. Our smallest project is 6,500 square kilometres, it's very large. Our largest project is nearing the size of countries like Belgium, right? So you need space. You need space. Well, at least the total base in size obviously that's split into nodes, right? But you need space. And what Asia doesn't have in great quantities is space.

Now Australia has it, China has it in areas and India has a little bit too in certain areas. So longer term, let's say, well, let's say near term in the next one or two decades, the Middle East and Australia, are sort of very good places to do big projects.

China will do very big projects, but one would imagine largely for itself. Because China's a massive consumer of energy. You look at North Africa, the North Africa sector, there could be some good projects, particularly for supplying the European market. And then if you look at, you look at America, the US and Canada, they have still vast amounts of area that they could develop for themselves too.

South America could do projects too. So yeah, so green molecules. Projects really rely on the cheapest cost of electricity at the highest volumes. So offshore renewables don't really work. Europe is a very challenged place to do low cost green molecules.

Joseph Jacobelli:

Yes.

Alexander Tancock:

You know, much of Southeast Asia won't work. So it's really about finding, like I said, the sort of match between, you take an Australia and a North Asia, you have a sort of a perfect symbiosis, right? It's about finding those partnerships. So, let's take Morocco and parts of North Africa and Europe.

Yeah, there's all kinds of links one could foresee in the future, but Asia, it's the big buyer ultimately.

Joseph Jacobelli:

Yeah. That's at the end of the day, the centre of growth, at least for the next few years.

Alex, this has been a fantastic conversation. I appreciate your time. I know how incredibly busy you are. I'm really grateful that you were able to speak to us on the Asia Climate Finance Podcast.

Alexander Tancock:

It's been a pleasure. Thanks. Keep it up. It's a great podcast.