In August of 2019, I published “The Race to Retail Hydrogen Fuel Cell Technology, Production, and Distribution” and the mainstream media has recently given that investment opportunity a bit more coverage. Jim Cramer jumped into the fray of misinformed troll-mania on his Twitter feed a couple days ago after noting that he “will increasingly be focused on hydrogen and EV.”
It’s definitely not too late to explore what is happening in the hydrogen industry and big oil companies have just begun carving out early stakes in the race to retail hydrogen. BP rallied on the London Stock Exchange yesterday and tacked on a healthy 25% gain within 24 hours on a kneejerk reaction to news of a potential vaccine that may blunt the pandemic’s economic malaise, but hydrogen-related news multiplied BP’s gains and they remain intact despite market volatility.
BP and Orsted Launch Green Hydrogen Partnership… “The pair will collaborate on a 50-megawatt green hydrogen electrolyzer at a German refinery that could scale up to 500 megawatts.” – GreenTechMedia, Nov. 10
BP Launches Green Hydrogen Project With Danish Energy Giant Orsted… “The Stock Is Surging.” – MarketWatch, Nov. 10
Goldman Sachs jumped into the scramble for hydrogen back in September of this year with a recommendation for securing early positions, stating that green hydrogen is a once-in-a-lifetime opportunity and estimates it will develop into a $12 trillion market by 2050 between the U.S. and Europe.
‘Green Hydrogen’ Could Become a $12 Trillion Market. Here’s How to Play It… “Goldman says there are three main ways to get exposure to e-hydrogen. The first is through utilities including RWE, EDP and its publicly traded offshoot EDP Renováveis, Enel, Iberdrola, SSE and Orsted. Goldman upgraded Italy’s Snam to buy from sell, given the longer-term opportunity in renewables, and also mentioned Enagas as a gas infrastructure company that could see new investment. The reconversion of gas plants into hydrogen turbines could lift combined cycle gas turbine operators Uniper, Engie and RWE. In the U.S., it notes that NextEra Energy is the industry leader in U.S. renewables, while other possible plays include NextEra Energy Partners, Consolidated Edison, and owners of gas pipeline infrastructure like The Williams Cos.” – Barron’s, Sep. 23.
Green Hydrogen Could Fill Big Gaps In Renewable Energy… “Companies are working to develop electrolyzers that can produce green hydrogen as cheaply as gray or blue hydrogen, and analysts expect them to reach that goal in the next decade. Meanwhile energy companies are starting to integrate electrolyzers directly into renewable power projects.” – Scientific American, 10
If you have antiquated ideas about a lack of progress in cost-effective applications in e-hydrogen energy, consider the following out of Sweden:
Fossil-free steel project ready for operation… “The world’s first fossil-free hydrogen-powered steel plant located in northern Sweden will begin operations on Monday 31st August. HYBRIT (Hydrogen Breakthrough Ironmaking Technology) is a groundbreaking effort to reduce CO2 emissions in the steel industry by replacing coal with hydrogen in the steelmaking process.” – H2View, Aug. 27
Advances in the use of hydrogen for air transportation are also moving along:
Hydrogen-powered passenger plane completes maiden flight… “A hydrogen fuel-cell plane that’s capable of carrying passengers completed its maiden flight this week, in another step forward for low and zero-emission flight… ZeroAvia has said the trip, described as a ‘hydrogen fuel cell powered flight of a commercial-grade aircraft,’ is a ‘world first.’ Other examples of hydrogen-fuel cell planes that can host passengers do exist, however.” – CNBC, Sep. 25
In Asia, several countries are exploring hydrogen as a means to diversify their energy sources and are not predicated on carbon emission reduction. The majority are focused on using hydrogen for transportation and electricity generation. South Korea’s goal is to have at least six cities converted to hydrogen power generation by 2025, and Japan has the world’s largest renewable-powered hydrogen project and is a global leader in hydrogen refueling stations for vehicles.
The majority of the world’s energy companies and industry groups are actively pursuing hydrogen technology. Mitsubishi Power Americas Inc. plans on building three hydrogen-ready, gas-fired power plants in the U.S., Germany’s RWE will supply hydrogen to ThyssenKrupp AG steel as a promotional campaign for a natural gas terminal in the works, U.K.’s Ceres Power and ITM Power, along with Norway’s Nel ASA and Sweden’s Powercell are listed companies whose core business is hydrogen technology, Australia’s Infinite Blue Energy is planning an IPO that will be the first zero-emissions hydrogen stock listed on their exchange, European plane maker Airbus is designing hydrogen-powered commercial aircraft that will be in service by 2035, and utility giant Entergy Corp. is in the process of reducing its reliance on natural gas by investing in Mitsubishi Power.
- Path to Hydrogen Competitiveness, Cost Perspective – Hydrogen Council, Jan. 2020
Hydrogen technology will be scaling up and distribution will become more efficient. The most optimistic projection sees renewable hydrogen being produced at $0.70 to $1.60 per kilogram in most parts of the world by 2030, with cost reduction of hydrogen for end-users approaching 60% as the technology becomes a competitive alternative to conventional fuel in some regions. The Hydrogen Council anticipates that hydrogen-based technologies will supply up to 25% of the world’s energy needs by 2050.
The following articles have come across my screen since publishing Part 1 that included additional companies for a hydrogen watchlist:
- The hydrogen fuel strategy behind Nikola’s truck dream – ARStechnica
- Breakingviews – Hydrogen investing is a lottery worth playing – Reuters
- Hydrogen-powered supercar can drive 1,000 miles on a single tank – CNN
- Investors hit the gas on hydrogen producers – Financial Times
- The Hydrogen Boom Is On Track To Hit $11 Trillion – OilPrice.com
- Plug Power & Apex Clean Energy to Develop Green Hydrogen Network – SeekingAlpha
- Hydrogen-powered trains get green light with Siemens Energy and Mobility – CNBC
- investment opportunities in ‘green hydrogen’ might not be where you think – CNBC
- New alliance targets deployment of heavy-duty hydrogen vehicles – Freight Waves
Pininfarina’s H2 Speed – Hydrogen-powered Race Car
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