These firms are in the thick of the switch from gray to green.
Imagine flying in a plane, riding a bus or getting electricity from a local utility that emits only water vapor and warm air. It’s possible with power from hydrogen fuel cells, a technology the world has had since the 1800s. The emissions are clean, but producing the hydrogen itself isn’t necessarily environmentally sustainable. Most “gray hydrogen” is made using natural gas or coal without carbon-capture technology. But there are companies involved with “green hydrogen,” which is made with renewable energy that is used to separate water into hydrogen and oxygen using a tool called an electrolyzer. “What has historically been a niche market is about to ramp up in a massive way — creating plenty of opportunities for investors who want to play this theme — reflecting a potent combination of economic and policy drivers,” Raymond James analysts wrote in a December report about the transition to green hydrogen. The analysts compiled a list of green hydrogen stocks with the requisite electrolyzer technology. Here’s a look at six of the best green hydrogen stocks to watch.
Bloom Energy Corp. (ticker: BE)
Headquartered in San Jose, California, this green hydrogen company makes fuel cell power generation systems that can run on hydrogen, biogas and natural gas and can be adopted for utilities and the transportation industry. In 2021, it unveiled an electrolyzer that relies on the same technology as its power generation technology. The company says its electrolyzer technology can use the excess heat from heavy industries, such as steel and cement manufacturing, to produce hydrogen with less electricity. That hydrogen can be used to power high-temperature furnaces used in the manufacturing processes. “When the Bloom electrolyzer is paired with intermittent renewable resources, such as wind and solar, the resulting green hydrogen provides an important storage mechanism,” the company says. “Hydrogen can be stored for long periods of time and transported over long distances. Alternatively, Bloom Energy’s fuel cells can convert this hydrogen to electricity, thereby providing continuous, reliable power.”
Plug Power Inc. (PLUG)
Here’s another company that makes both hydrogen fuel cells and electrolyzers. Based in Latham, New York, Plug Power notes electrolyzer-produced hydrogen can be used for storage of surplus electrical energy; semiconductor manufacturing; food hydrogenation; and fueling stations for cars, trains and other vehicles. “The remarkable potential of hydrogen fuel cell vehicles to reduce emissions from the transportation sector fuels the market growth rate,” the company says. “Large investments in green hydrogen occurring globally at this time facilitate our entry in this growing market.” The company’s electrolyzer customers include NASA and Boeing Co. (BA). “What makes us enthusiastic is the truly vast extent of the opportunity in transitioning from gray to green hydrogen,” said the Raymond James analysts. “The size of the pie that we ultimately envision equates to capital spending on electrolyzer newbuilds of several billion dollars per year.” But they cautioned that “needle-moving” demand from buses, trucks and power plants won’t materialize until the end of the decade.
Next Hydrogen Solutions Inc. (NXHSF)
After successful pilots, this Mississauga, Ontario-based company that designs and manufactures hydrogen electrolyzers is scaling up its technology for the transportation and industrial sectors. In November, the company announced it had incorporated a subsidiary in the United States as it pursues U.S. renewable energy grants and incentives and participation in U.S. infrastructure projects. “Next Hydrogen is poised to be a significant contributor to reducing carbon emissions in the U.S. transportation and industrial markets and we are excited to establish a presence there,” CEO Raveel Afzaal said in a press release. “Hydrogen is a key driver in global efforts to reduce greenhouse gas emissions, and the U.S. will prove to be a defining market for reducing the carbon footprint of the transportation and industrial sectors.”
Fusion Fuel Green PLC (HTOO)
Investing in European companies puts investors at the forefront of green hydrogen development. “Europe is the main hub of hydrogen technology innovation,” the Raymond James analysts said. “The European Union has the strongest climate policy among the major CO2 emitters, and this includes a roadmap … aimed at 6 (gigawatts) of electrolyzers by 2024, en route to 40 GW by 2030.” Ireland-based Fusion Fuel Green says its solar-powered electrolyzers will be able to make green hydrogen that is cost-competitive with gray hydrogen by 2023. It sells the technology to customers who want to produce their own green hydrogen. It also develops its own green hydrogen farms and sells the fuel through long-term purchase agreements. In October, the company announced an agreement with Exolum, a leading European fuel logistics and storage provider, to provide a green hydrogen refueling station in Spain that will serve trucks and buses.
ITM Power PLC (ITMPF)
Another European company, U.K.-headquartered ITM Power, was founded in 2001 and claims to be the first hydrogen-related company to be listed on the London Stock Exchange. It opened what it says is the world’s largest electrolyzer production facility in 2021, enabling it to slash the cost of the hydrogen-making equipment by 40% over three years because of increased automation and savings gained from increased production. It expects a second, bigger factory will be operating by the end of 2023. “In recent years, interest in green hydrogen has increased rapidly worldwide,” the company says. “To help meet demand and accelerate global progress towards net-zero, we have scaled up at speed.” In December, the company said it had a record order backlog of 499 megawatts as of Dec. 1, representing a 61% increase since September.
Nel ASA (NLLSF)
With roots in producing hydrogen for fertilizer in 1927, this Norway-based company supplies hydrogen production and storage solutions as well as hydrogen fueling stations. This month, Nel announced an order worth more than $6 million for hydrogen fueling station modules from a U.S.-based fuel supplier. “We are capable of integrating hydrogen in existing gas station networks, or establishing entirely new hydrogen fueling networks, with on-site and/or centralized hydrogen production,” the company says. Also in December, Nel announced a 3 million euro (about $3.4 million) order for an electrolyzer system from a new European customer. In the third quarter, the company said it had a record-high pipeline of potential orders of more than $6 billion.
Six green hydrogen stocks to watch for 2022:
— Bloom Energy Corp. (ticker: BE)
— Plug Power Inc. (PLUG)
— Next Hydrogen Solutions (NXHSF)
— Fusion Fuel Green (HTOO)
— ITM Power (ITMPF)
— Nel (NLLSF)
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6 Green Hydrogen Stocks to Watch in 2022 originally appeared on usnews.com
