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Green Hydrogen Set to Replace Grey as New Electrocatalysts Make Production Cost-Effective

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Cheaper And Greener Hydrogen

Green hydrogen is the idea of producing hydrogen as a fuel from renewable energy sources, making it an alternative to fossil fuels. However, producing hydrogen through electrolysis requires expensive and rare metals of the platinum family.

Korean researchers Pr. Jungki Ryu in the School of Energy and Chemical Engineering at UNIST and Pr. Dong-Hwa Seo from the Department of Materials Science and Engineering at KAIST has found a new type of catalyst, ruthenium, to avoid using platinum or iridium.

More precisely, it relies on much cheaper and less environmentally damaging alloy of ruthenium, silicon, and tungsten (RuSiW).

The Hydrogen Rainbow

Hydrogen is the most abundant atom in the universe but is not easily found as a fuel on Earth.

Currently, most hydrogen produced is so-called “grey hydrogen”, made using methane (natural gas), emitting a lot of carbon into the atmosphere. This is just one of the possible “colors” of hydrogen:

  • Grey/brown hydrogen: produced from fossil fuels.
  • Blue hydrogen: produced from fossil fuels, but with carbon capture.
  • Pink hydrogen (sometimes also called yellow hydrogen): produced from nuclear energy.
  • Turquoise hydrogen: produced from the pyrolysis of methane. This breaks down methane into hydrogen and solid carbon. The solid carbon can be stored or used for applications like carbon fibers.
  • Green Hydrogen: produced from renewable energy.

Green hydrogen is the ideal situation and a goal for most climate-conscious people. Producing it depends on a process called electrolysis, breaking down water molecules into gaseous hydrogen and oxygen. This is a rather energetic process, which is also dependent on catalyst elements from the platinum group.

The Quest For Green Hydrogen

Green hydrogen is an important part of the puzzle to decarbonize the economy, as it can fill applications that electricity alone cannot. For example, it can reduce by 95% the carbon emissions from traditional steel-making processes. Steel manufacturing represents 11% of global emissions. It can also be used by fuel cells to power the engines of cars, trucks, and boats.

It could also be used directly for energy storage or to produce ammonia, a good candidate for long-distance shipping fuel or long-term energy storage, something we discussed in our article “The Other Hydrogen Fuel – Top 5 Green Ammonia Stocks”.

It has long been known that ruthenium could provide an alternative to platinum, but it suffered from limitations:

  • lower catalytic activity compared to platinum.
  • lower stability compared to iridium.

This recent discovery found that the presence of silicon around the ruthenium atom boosts the absorption intensity of H+ on the catalyst surface.

Stability is increased by a thin tungsten film with a thickness of 5~10 nm protects the catalytic site of ruthenium. This is the same type of technique that is used in semiconductor production, where tungsten in gaseous form is deposited in a very thin layer over the silicon chip.

Sectors To Benefit

By making green Hydrogen production cheaper and more environment friendly, this discovery could prove a boost to multiple sectors:

  • Fuel cell manufacturers, whose engines' economics will benefit from cheaper fuel.
  • Green Hydrogen producers, could see larger margins and see hydrogen gaining market share in the energy markets.
  • Green ammonia manufacturers. Not only they will access cheaper hydrogen for ammonia production, but mass adoption of ammonia requires catalysts to reduce toxic and “super greenhouse gases” NOx. This usually requires platinum as well, but maybe RuSiW could do the job here too?
  • The renewable energy sector, as mass green hydrogen production, will provide an outlet for “surplus” energy during times of strong sun or wind.

Companies To Benefit

1. Aker Horizons ASA

Aker Horizon is the subsidiary of the Aker group centered around green energy. The group is an important Norwegian conglomerate, with a focus on renewables and marine/offshore businesses. Aker Horizon is the holding company for several subsidiaries including carbon capture, green hydrogen, and renewable energies.

Source: Aker

The company is notably very active in hydrogen and green ammonia generation, with a goal to decarbonize Arctic shipping, replacing fossil fuels with hydrogen-based fuels.

Source: Aker

So Aker is in a prime position to benefit from a cost reduction in green hydrogen generation. It can handle the entire vertical integration of green ammonia, from offshore windmills to hydrogen generation to green ammonia production.

It is also working on projects like waste-to-energy in France, a biomass plant in Germany, and carbon capture in the Middle East (Saudi Arabia and UAE).

This makes it a good stock for investors looking for exposure to the green energy sector at large, with a strong positioning on green hydrogen and green ammonia, but also other green energies, and some geographical diversification.

2. Plug Power Inc.

finviz dynamic chart for  PLUG

Plug Power is a leader in green hydrogen, with a focus on fuel cells. Notably, its fuel cells power over 40,000 forklifts, with revenues up x8 since 2013. It is also active in building hydrogen infrastructure like hydrogen production, logistics, utility-scale power generation, and deliveries.

The company is aiming for scale to reduce production costs from $10/kg to $4/kg, while multiplying production by 14x in 2027. Of course, new technologies avoiding the requirement of platinum for electrolysis would help as well.

Source: Plug Power

Due to massive investments to increase production capacity 19x since 2020, the company is not profitable yet. This led to almost doubling revenue from the beginning to the end of 2023.

Most of the current and projected business is expected to come from North America. The company's strategic acquisitions, such as that of United Hydrogen and Giner ELX, have further strengthened its position in the hydrogen economy by enhancing its capabilities in hydrogen generation, liquefaction, and distribution.

The company sees its solution as either a direct mobility fuel, or a complement to EVs, as hydrogen allows to reduce the pressure on the grid of EVs peak charging not matching the times of production of renewables in the day.

Source: Plug Power

As a major fuel cell producer, Plug Power would benefit strongly from a turn toward a hydrogen/ammonia-based economy. So this makes Plug Power a good stock to bet on a turn toward hydrogen in general, with or without ammonia. The focus on costs and scale is also commendable.

3. Ballard Power Systems Inc.

finviz dynamic chart for  BLDP

Ballard is another fuel cell manufacturer, and a pioneer of the technology with its first fuel cell bus in 1993.

The company is focused on heavy-duty markets: buses, trucks, trains/trams, ships, mining/construction, and power. While buses have been the core of the business, the company expects that by 2025 trucks will be a major business segment. It also expects Europe to stay its main market (50-60%), followed by North America (25%).

Trucking fuel cells are expected to keep growing and represent a $7.5B market in 2030 (from a $195B TAM), almost as large as all the other hydrogen/fuel cell applications combined. This growth could accelerate if hydrogen production prices decline thanks to new technologies.

Source: Ballard

Because of the higher power required, and the need for quick charging, heavy-duty vehicles have been a good market for hydrogen and fuel cells over lighter vehicles like cars. It also reduces the need for catenary wire for rail and trolley buses, and fast recharging for long-distance hauling.

Source: Ballard

The company is not a stranger to ammonia either, with for example a recent contract with Amogy to provide it with fuel cells for its “ammonia-to-power platform which relies on unique ammonia cracking technology”.

While EVs have a reasonable chance to quickly take over the car markets, heavier vehicles are harder to decarbonize. With its established leadership in the sector, Ballard would be a prime beneficiary of a policy push toward a hydrogen economy.

4. Seaborg

Seabord is a Danish company developing a compact molten salt nuclear reactor that is also a floating power plant of up to 800 MW.

Source: Seaborg

The sea-based design of Seaborg nuclear reactors makes it a good fit for coastal nations, with discussions engaged with Indonesia and Norway.

Seaborg is also working with the global leader in shipbuilding Samsung Heavy Industries to develop floating Nuclear Power Plants combined with hydrogen and ammonia plants.

While often preferred by green policies and activists, there is no requirement that hydrogen is produced with green electricity to reduce carbon emissions, just that the power comes from a low-carbon source. So nuclear is an option as well.

Hence, Seaborg could become an integral part of a nuclear-driven Hydrogen and Ammonia economy. And its easy to deploy and to move around nuclear reactors could be a great option for supplying hydrogen to harbors.

They could even rotate according to seasonal demand, for example, staying in the northern hemisphere in winter (when renewable production is low) and moving to other locations the rest of the year.

5. Bloom Energy

finviz dynamic chart for  BE

Bloom's co-founder built the first hydrogen fuel cell in the 1960s for the project Gemini and was also a pioneer of electrolysis in the 1980s.

The company has deployed 1GW of on-site primary power generation solutions for hundreds of customers, with 95% of all stationary fuel cells installed in the US since 2018 are Bloom Energy Servers.

Source: Bloom Energy

Bloom's focus has been on industrial sites, data centers, hospitals, retail centers, and other large facilities, together with the deployment of microgrids. It is also working on developing fuel cells for maritime shipping.

Bloom makes most of its revenues from sales of fuel cells and electrolyzers, representing 75% of total revenues, with 2/3rd of sales in the USA.

The company's electrolyzers utilize the technology of solid oxide, which produces 20-25% more hydrogen per megawatt (MW) than older methods like proton electrolyte membrane (PEM).

Source: Bloom Energy

As a leader in large facilities fuel cell systems, Bloom should benefit from cheap hydrogen production, even if the emergence of cheaper, non-platinum electrolysis catalyzers could also represent a threat to the solid oxide electrolyzers it offers.

Jonathan is a former biochemist researcher who worked in genetic analysis and clinical trials. He is now a stock analyst and finance writer with a focus on innovation, market cycles and geopolitics in his publication 'The Eurasian Century".