Apr 24, 2022 17:05
'Hydrogen Fuel Cells,' which are a very attractive alternative to typical electric vehicles, are coming back as a green and clean fuel source and are being used to power them.
It's crucial to understand hydrogen as an asset before you start looking into hydrogen stocks as feasible (and hopefully profitable) investment options.
Hydrogen is a very versatile fuel for a combustion engine.
Hydrogen energy has a tremendous amount of promise. The emissions-free fuel might contribute to decarbonizing heavy industry, displacing natural gas, and storing renewable energy, paving the road for a completely net-zero future. As such, it represents an enormous market opportunity worth many trillions of dollars.
On the other hand, hydrogen is still in its infancy as an economically viable fuel source. The industry must grow and cut costs to compete with fossil fuels and future technologies such as battery storage. As a result, investors may wish to monitor the industry for a while in order to determine which companies have the highest potential for long-term success.
When hydrogen fuel is combined with oxygen, it creates only water, a little amount of heat, and energy, with no CO2 or particulate matter emissions.
Hydrogen fuel has no negative externalities that could harm human health or the environment; it is just intrinsically clean energy, which is why many consider it to be the energy of the future.
Hydrogen fuel is suitable for use in both fuel cells and internal combustion engines. Hydrogen fuel cell technology, in particular, is gaining growing attention from businesses and investors alike.
Fuel cell technology is unusual in that it can power systems as large as a utility power plant or as small as a laptop computer.
Hydrogen fuel cells, which operate on the premise of combining hydrogen and oxygen to generate clean electricity, can power almost anything - trucks, cars, delivery vans, residential structures, drones, airplanes, and even futuristic technology such as air caps.
It almost appears as though we are already living in the future, as an increasing number of enterprises enter the energy market, advancing the so-called hydrogen economy – the revolution shifting the economy away from fossil fuels and toward hydrogen to create a net-zero world.
Gray hydrogen is produced during steam methane reforming, and it is a fuel product from refining fossil fuels. Today, around 71% of our hydrogen is "gray."
Brown hydrogen is produced during the coal gasification process. For decades, people have adopted this strategy, and however. As a result, it produces additional greenhouse gasses.
Blue hydrogen is produced in the same way as today's hydrogen but with the added benefit of carbon capture and storage. This approach has not been marketed or scaled up sufficiently for general use.
Electrolysis produces green hydrogen. The separation of water into its two basic elements, oxygen and hydrogen, is accomplished by utilizing renewable energy.
To begin, an excess of renewable energy can be used to generate green hydrogen.
Second, you can store renewable energy until it is needed or sold. As a result, it is an advantageous resource for utility operators of intermittent renewable energy sources such as wind and solar.
Along with the above-listed applications for hydrogen, green hydrogen enables a plethora of new ones. Steel and cement manufacturing are two industries that are notoriously difficult to carbon neutralize. Each is manufactured in a unique manner. However, both face a significant obstacle: they require vast volumes of continuous, high-temperature heat. And we cannot just discontinue the production of any substance. Cement and steel are critical components of modern construction. However, each of their accounts for around 7% of energy-related GHG emissions. This is because their heat sources are natural gas-fueled. Green hydrogen is a critical component of decarbonizing them.
However, there are a few points that remain unclear. Hydrogen is less dense than natural gas in terms of volume, resulting in modifications to existing natural gas pipes.
Additionally, who must reduce the cost of producing green hydrogen before production volume can be increased? By 2030, Fessler asserts, costs will have decreased by a third.
Many investors are optimistic about renewable energy and infrastructure equities now that the Biden administration is in power. In light of this, here are some of the top green hydrogen stocks to invest in right now.
Electric vehicles are charged straight from the electricity. This is a significant advantage in favor of EVs, as electricity is nearly ubiquitous. EVs do not have a "supply" or infrastructure problem, but they do have several limitations:
Lithium-ion batteries (the finest currently available) require considerable time to charge.
Batteries add weight to EVs and are expensive to replace.
Hydrogen fuel cells generate electricity and power the vehicle's power train using hydrogen.
The absence of batteries results in a far lighter vehicle, while the combination of the hydrogen fuel tank and fuel cells provides a significantly higher "power density" than Lithium-ion batteries. Additionally, it takes only a few minutes to fill a hydrogen tank instead of the hours required to fully charge an EV.
Hydrogen as a fuel source currently has three weaknesses:
Danger level: While hydrogen is lighter than air, which means that if a hydrogen tank catches fire, the flames will spread upward rather than outward (as with gasoline), people have a phobia of driving around with a few kilograms of extremely dangerous gas.
Inadequate Infrastructure: Currently, the majority of hydrogen is produced using fossil fuels (also known as brown hydrogen), defeating the purpose. Few large actors are capable of manufacturing enough hydrogen to meet future demand (assuming it materializes), and transporting hydrogen is another concern, as is safety. Hydrogen generation on-site for hydrogen fuel stations is being investigated.
Cost: Producing hydrogen from water needs a significant amount of electricity, and the cost of hydrogen produced is directly proportional to the cost of electricity consumed. That is equivalent to paying a hefty premium for electricity.
However, many stakeholders worldwide are seriously examining hydrogen as an alternative or complement to the world of green energy, not just for vehicles.
Hydrogen is viewed as a backup energy source that may be used to supplement wind farms when the wind does not blow. Cheap electricity, such as that produced in Quebec, can provide Canada with an edge that few other countries have by establishing it as a hydrogen production hub.
According to the International Energy Agency, hydrogen now supplies only 1% of the world's energy needs. However, this may be about to change. The Hydrogen Council estimates that hydrogen might meet more than 20% of world energy demand by 2050.
Hydrogen may hold the key to overcoming some of the special issues associated with the move away from fossil fuels. While solar and wind energy are often more affordable than fossil fuels in many regions, they are intermittent, seasonal, and weather-dependent. We require methods of storing energy generated by solar panels or wind turbines for times when the sun is not shining, or the wind is not blowing.
Furthermore, lithium-ion batteries, which are now utilized in electric automobiles, are still too hefty for heavy-duty trucks, airplanes, and ships. Although batteries have improved significantly over the last decade, their range and charging time remain limited.
Hydrogen is a colorless, extremely light gas that may be used to store energy as a fuel for trucks, planes, ships, and heat houses and power industrial activities such as steelmaking. Hydrogen is three times lighter than jet fuel and burns water. Who can refuel Hydrogen-powered vehicles at hydrogen charging stations in the same way that conventional vehicles are; there is no need to wait.
The high expense of green hydrogen, particularly in comparison to natural gas, has been the most significant impediment to adoption.
Fortunately, the cost of renewable energy is decreasing, making green hydrogen more affordable. Although green hydrogen is still expensive, costing between $3 and $6.55 per kilogram (compared to only $1.8 per kilogram for hydrogen derived from fossil fuels), prices could eventually fall to $1.5 per kilogram with low-cost renewables.
Additionally, official initiatives in the United States and the European Union encourage the use of green hydrogen. The US Department of Energy's Earth shot Initiative intends to bring the cost of clean hydrogen down to less than $1 per kilogram in a decade. Additionally, the Infrastructure Bill contained financing totaling $9.5 billion to accelerate the development of clean hydrogen technology.
Ballard Power Systems is one of Canada's greatest hydrogen stocks, despite the fact that it does not manufacture hydrogen. However, it is one of the world's largest makers of PEM fuel cells.
Since its founding, the company has shipped over 850 MW of fuel cell devices. Additionally, the company's clientele is significant, including bus makers, light rail firms, Audi, and a truck manufacturer.
Ironically, the stock, which has increased about 1800% from crest to peak over the last five years, is still trading at a fraction of its high valuation (2000).
On the other hand, the corporation is well-positioned in the foreign market to meet demand, even if it spikes. Additionally, as the global leader in fuel cell technology and manufacturing, it may gain from a healthy hydrogen market.
And it is well-positioned to capitalize on hydrogen's diverse demand, owing to a developed product line capable of serving the needs of the transit/automotive industry and as a backup energy source for renewable-powered industries/applications.
Plug Power Inc is widely regarded as one of the greatest hydrogen fuel cell stocks to invest in. Indeed, it is the world's largest supplier of clean hydrogen and the largest buyer of liquid hydrogen, with more hydrogen refueling stations than any other corporation.
The company recently announced a partnership with chemical giant Fertiglobe to manufacture green hydrogen via a 100-megawatt electrolyzer capable of producing and storing hydrogen. Additionally, Plug Power announced plans to establish a European headquarters in Germany, providing critical access to European markets.
Plug Power's share price has been fluctuating wildly. Plug Power was considered a hydrogen penny stock from 2015 to late 2019, selling at an average price of $2.00. The share price increased more than 1,880 percent to over $75.00 per share in early 2020.
Since then, the stock price has fallen 75% until stabilizing around $20.00 and presently trading at a premium of 150 percent to its current 2021 low. If investors and institutions begin allocating additional capital to the hydrogen sector, the stock does have upside potential.
Based in San Jose, California, this green hydrogen startup develops fuel cell power production systems that may run on hydrogen, biogas, or natural gas and are suitable for utility and transportation applications. It debuted an electrolyzer in 2021 that utilizes the same technology as its power-producing technology. According to the company, their electrolyzer technology can utilize waste heat from heavy sectors such as steel and cement manufacturing to generate hydrogen using less electricity. They can utilize this to fuel the high-temperature furnaces used in manufacturing. "When combined with intermittent renewable energy sources such as wind and solar, the resulting green hydrogen serves as an important storage mechanism," the company explains. "Hydrogen has the ability to be stored for an extended length of time and delivered over great distances. Alternatively, Bloom Energy's fuel cells can convert this hydrogen to electricity, delivering dependable power on a continuous basis."
Air Products (APD) is a global leader in the supply of industrial gases. It is a global leader in technology and liquefied natural gas (LNG) processing equipment. Additionally, it is a major provider of merchant hydrogen and a pioneer in hydrogen fuel infrastructure.
Air Products aspires to be a global leader in gasification, carbon capture, and clean hydrogen to address the world's energy and environmental concerns. It is now working on several large hydrogen projects that it hopes to accomplish in the future years. Among them are a $4.5 billion blue hydrogen project in Louisiana, a $7 billion carbon-free hydrogen joint venture in Saudi Arabia, and a $1 billion net-zero hydrogen project in Canada, all of which are scheduled to begin operations between 2024 and 2026. The trio of projects and future endeavors position Air Products to remain a global leader in hydrogen energy.
Following successful pilots, this Mississauga, Ontario-based manufacturer of hydrogen electrolyzers is scaling up its technology for the transportation and industrial sectors. The company stated in November that it had established a subsidiary in the United States to pursue renewable energy subsidies and incentives as well as participation in US infrastructure projects. "Next, Hydrogen is well-positioned to significantly contribute to carbon reduction in the transportation and industrial areas in the United States, and we are excited to establish a presence there," CEO Ravenel Afzaal stated in a press release. "Hydrogen is a critical component of worldwide efforts to reduce greenhouse gas emissions, and the United States will prove to be a defining market for reducing the transportation and industrial sectors' carbon footprints."
Ceres Power manufactures SteelCell fuel cells that can generate electricity using either traditional fuels such as methane or renewable fuels such as hydrogen, biogas, or ethanol. The technology is applicable to both established sectors such as building heating and cooling and emerging markets such as electric cars and data center backup power generators.
Ceres has developed a low-emission range extender solution for electric vehicles, collaborating with Weichai Power. SteelCell technology is also being used to boost data center energy efficiency. Ceres Power has already generated revenue: the company forecasted 21 million GBP in 2020 revenue.
Nikola Corporation is a maker of commercial battery-electric vehicles, hydrogen fuel cell electric vehicles, and advanced energy solutions. The company went public in early 2020 and now intends to manufacture hydrogen-electric trucks in response to European clients' needs.
The company's most recent financial report, released in August, revealed a wider net loss, despite being narrower than analysts anticipated. EPS fell to 20 cents from 14 cents in Q1 but remained better than the predicted 30-cent loss.
Nikola has not yet generated revenue due to the absence of a commercial product. Hindenburg Research has even claimed that the prototype of one of the company's trucks is not driving itself up a precipice but rather sliding down one. Following that, the SEC launched an inquiry into whether the firm misled investors, which is still ongoing.
Nikola revealed during the results call that it now intends to deliver 25-50 electric vehicles in 2021, down from a previous forecast of 50-100. Additionally, the company cut its sales forecast to $0-$7.5 million from $15-$30 million earlier.
On the plus side, Nikola announced in October a collaboration with TC Energy Corporation (TSX, NYSE: TRP), a major North American energy infrastructure business, to co-develop, build, and operate large-scale hydrogen production facilities (hubs) in the United States and Canada. Nikola stock increased approximately 10% in response to the announcement and is expected to test the $14 - $15 resistance level in the near term.
Investing in European companies puts investors at the cutting edge of green hydrogen development. "Europe is the primary innovation hub for hydrogen technology," Raymond James analysts stated. "Among the biggest CO2 emitters, the European Union has the strongest climate strategy, which includes a roadmap... targeted at 6 (gigawatts) of electrolyzers by 2024, en route to 40 GW by 2030." Fusion Fuel Green, based in Ireland, claims that by 2023, its solar-powered electrolyzers will be able to produce green hydrogen that is cost-competitive with gray hydrogen. It licenses the technology to customers interested in producing green hydrogen on their own. Additionally, it creates its own environmentally friendly hydrogen farms and sells the fuel via long-term purchase agreements. In October, the company announced a partnership with Exolum, a prominent European fuel logistics, and storage supplier, to establish a green hydrogen refueling station for trucks and buses in Spain.
Hydrogen is an extremely promising and feasible environmentally friendly alternative fuel that has the potential to be used in conjunction with renewable energy sources and even nuclear power. Extremely cheap electricity has the potential to resuscitate the hydrogen economy while simultaneously posing a significant threat to renewables in the electric vehicle sector and as a source of clean energy in general. Today, a prudent course of action may be to acquire some of the best available hydrogen stockpiles and retain them until demand increases. If you are not planning to acquire today, monitoring these stocks and the hydrogen market for any significant waves should be a top priority regardless of whether you intend to purchase.
Apr 24, 2022 16:52
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