On this week’s Opto Sessions podcast, Christie Obiaya, CEO of solar thermal power company Heliogen, explains how the company’s AI-driven technology produces three core products: green steam, green hydrogen, and HelioPower. Obiaya details how these products can drive the energy transition, and the company’s path to profitability.
LISTEN TO THE INTERVIEW:
Christia Obiaya is CEO of publicly listed solar thermal power company Heliogen, which uses artificial intelligence (AI) to optimise the process of converting the sun’s energy into heat. She was previously chief financial officer of the company, and replaced founder Bill Gross as CEO in February 2023. Prior to joining, Obiaya was chief financial officer of Bechtel Corporation.
Obiaya’s long-term ambition for Heliogen is “to make a meaningful dent in mitigating climate change through solar energy technology”, she tells Opto Sessions.
“Climate change is the single greatest threat to humanity. If we want there to be a sustainable civilization for our grandchildren and their grandchildren, we have to solve it”
“Climate change is the single greatest threat to humanity,” she continues. “If we want there to be a sustainable civilization for our grandchildren and their grandchildren, we have to solve it.”
“Heliogen’s technology should be part of that solution.”
Solar Thermal
Heliogen [HLGN] uses solar thermal technology, which differs slightly from photovoltaic solar (solar PV), the type most people are familiar with. Whereas solar PV directly converts the sun’s energy into electricity, solar thermal harnesses the heat of the sun using banks of heliostats, “a fancy name for mirrors that track the sun” and direct energy towards a receiver at the top of a tower.
Using this heat, Heliogen can generate carbon-free steam and green hydrogen energy solutions, as well as electricity. A key advantage of solar thermal technology is that, unlike solar PV or other renewables such as wind or hydroelectricity, it can be converted into other forms of usable energy in this way.
Only 25% of the world’s emissions stem from energy production; industrial processes like agriculture, transportation and construction account for the remainder. These industries have historically proven tricky to decarbonise, but the three products that Heliogen can generate using its technology offer solutions for these sectors.
Green Steam
Green steam was Heliogen’s first commercially available product, and offers cost savings for enterprises or consumers that switch away from directly consuming fossil fuels.
“People are paying a high cost of gas; that makes it easier for us to undercut what they're currently paying for fossil fuels to generate the same heat.”
“If you’re creating heat or steam using an electric boiler and plugging that into the grid, that’s still using a lot of power,” says Obiaya. Conversely, Heliogen’s technology allows companies to generate heat and steam without any exposure at all to fossil fuels or their costs.
“We're offering customers the ability to offset their carbon emissions at the same or better costs as they’re currently paying for fossil fuels,” she explains. “We're starting to do this through attacking the higher-cost alternatives.
“People are paying a high cost of gas; that makes it easier for us to undercut what they're currently paying for fossil fuels to generate the same heat.”
Green Hydrogen and HelioPower
As Heliogen produces steam, it is relatively straightforward for it to produce hydrogen. Heliogen successfully demonstrated the use of solid oxide electrolysers — which split water in the form of steam to isolate hydrogen — in collaboration with Bloom Energy [BE] in 2021. Its first commercial-scale hydrogen project is currently under construction in Lancaster, California.
Hydrogen production is significant because, while electric vehicles are capturing most of the attention in the US, other countries such as Japan are pursuing a hydrogen-based transport fuel approach. According to research from McKinsey, hydrogen may also be the most promising candidate for the goal of emissions-free aviation.
Lastly, Heliogen is developing a commercial-scale demonstration product for HelioPower, a green electricity solution. Heliogen has a contract with Woodside Energy [WDS.AX], Australia’s largest producer of oil and gas. The project aims to use bauxite particles as a medium for storing heat energy. Production on that plant is expected to begin next year, according to Obiaya.
Artificial intelligence
Solar thermal technology hinges on mirrors being accurately directed towards the receiver, which was previously a laborious manual exercise. However, Heliogen now harnesses AI to optimise and automate this process.
Heliogen’s mirrors “have a closed-loop feedback system with cameras around the top of the tower,” says Obiaya, “and software that automatically adjusts the mirrors in order to always make sure that they’re pointed right in the centre of the top of the tower.”
This computer vision technology, she says, was only enabled in recent years thanks to the development of the Nvidia’s [NVDA] GPU Processor.
Investment time horizon
The transition to clean energy is something that Obiaya believes will take place over decades, especially given the fact that much of the required technology is currently still emerging.
However, governments the world over are beginning to act with urgency to address the challenge. Heliogen is “disproportionately able to capitalise on some of the clauses in the Inflation Reduction Act”, according to Obiaya, through investment tax credits, a production tax credit for green hydrogen of up to $3/kg, and through an advanced manufacturing tax credit.
“For investors looking with interest at this space,” says Obiaya, “the time to participate and start getting in is now.”
Time may be a limiting factor, but space is not: the world is covered with promising locations for solar power generation.
“We're very fortunate that so much of the Earth has really strong solar incidents,” she explains. “The kind of solar energy that’s measured as being important for concentrated solar thermal occurs really well in areas of the world like the southern US, South America, parts of the Middle East, North Africa and South Africa.”
Heliogen’s total addressable market is, according to Obiaya, as high as $800bn globally, based on what industrial companies currently spend on powering production.
Obiaya outlined Heliogen’s path to profitability on Opto Sessions, saying that the company went through a period of intense R&D until the end of 2022, but that priorities are now shifting to monetising its commercial products.
“As part of that, we have reduced our R&D budget significantly. And that reflects our shift from technology development to delivery.
“At this point, it's about commercialisation and execution.”
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