Energy
Why Hydrogen May Still Be the Fuel of the Future
Hydrogen has long been noted as a potential fuel for the future. One that will eliminate the need for fossil fuels to power internal combustion engines (ICE) by offering a clean burning alternative that is easily accessible. Interestingly, this future is becoming more likely as scientists are now discovering new sources of hydrogen around the world. Some through natural excretions from the Earth and some through the introduction of enzymes into capped wells.
Companies Developing Hydrogen Fuel Cell Technology
The following are each companies that have dedicated divisions surrounding the development of Hydrogen fuel cells and Hydrogen ICE.
Cummins Inc. (NASDAQ: CMI)
Established in 1919, Cummins Inc. has grown to become a global leader in power solutions. With its headquarters in Columbus, Indiana, the company is renowned for designing, manufacturing, selling, and servicing a broad range of power products, including diesel and alternative fuel engines, electric and hybrid powertrains, and associated components. Cummins operates through five distinct segments: Engine, Distribution, Components, Power Systems, and New Power.
In recent years, Cummins has been proactively transitioning towards more sustainable energy solutions, with a particular emphasis on hydrogen. The company's New Power segment, launched in 2019, is dedicated to the development of electrified powertrains, advanced battery technology, fuel cells, and hydrogen generation.
A significant milestone in Cummins' shift towards hydrogen was the acquisition of Hydrogenics Corporation in 2019. As a leading innovator in fuel cell and hydrogen production technologies, Hydrogenics' integration into Cummins' operations marked a significant step forward in the company's commitment to hydrogen-based solutions.
Through strategic partnerships and investments, Cummins is positioning itself at the forefront of the hydrogen economy, leveraging its extensive expertise in power systems and components. The company's focus on hydrogen underscores its dedication to sustainability and decarbonization.
Market Cap: $34.34B
Price to Earnings Ratio (P/E): 13.73
Earnings Per Share (EPS): $17.74
At the time of writing, Cummins (CMI) boasted the above metrics and is listed as a ‘Buy' among most major investment firms.
Plug Power Inc. (NASDAQ: PLUG)
Plug Power Inc., established in 1997 and headquartered in Latham, New York, is a pioneering force in the development of hydrogen fuel cell technology. The company designs, develops, manufactures, and commercializes hydrogen fuel cell systems used to power electric motors primarily in the electric mobility sector.
Plug Power's innovative fuel cell systems are designed to replace conventional batteries in electrically powered vehicles and equipment, such as forklifts used in warehouses and distribution centers. The company's product line includes GenDrive, a hydrogen-fueled PEM fuel cell system providing power to material handling electric vehicles.
In recent years, Plug Power has expanded its focus beyond fuel cells for material handling and has begun to target broader markets. This includes stationary power systems, delivery vehicle fleets, and even potential applications in aviation. 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.
Plug Power's commitment to hydrogen fuel cell technology underscores its dedication to sustainable energy solutions and its vision for a greener future.
Market Cap: $7.09B
Forward Price to Earnings Ratio (P/E) 1yr: -12.14
Earnings Per Share (EPS): $-1.33
At the time of writing, Plug Power (PLUG) boasted the above metrics and is listed as a ‘Strong Buy' among most major investment firms.
What is Hydrogen?
Hydrogen is the simplest and most abundant element in the universe. It is a colorless, odorless, and tasteless gas under standard conditions. Hydrogen has a single electron and proton, making it the lightest element.
Hydrogen is highly reactive due to the configuration of its electrons. It has one electron in its outermost shell, while it needs two to achieve a stable configuration similar to the noble gas helium. This makes hydrogen eager to form bonds with other elements to fill its outer shell. It readily forms a bond with elements that need an electron to complete their own outer shells, such as oxygen in the formation of water (H2O), or with another hydrogen atom to form a hydrogen molecule (H2). This propensity to form bonds with other elements to achieve a stable electron configuration is what makes hydrogen so reactive.
Hydrogen is commonly used in various industries, including the energy sector, where it's seen as a potential clean fuel source because when it's used to produce energy in a fuel cell, it emits only water as a byproduct.
How is it Used as Fuel?
Hydrogen can be used as a fuel in several ways:
- Fuel Cells: In a fuel cell, hydrogen and oxygen are combined to produce electricity, with water and heat as the only byproducts. This process is clean and efficient. Fuel cells can be used in a range of applications, from powering buildings to electric vehicles.
- Internal Combustion Engines: Hydrogen can be used in an internal combustion engine in much the same way as gasoline or diesel. However, this is less common and typically less efficient than using hydrogen in fuel cells.
- Power Generation: Hydrogen can be burned in a turbine to generate electricity, similar to natural gas turbines.
- Energy Storage: Hydrogen can act as an energy storage medium. Excess renewable energy (like wind or solar power) can be used to produce hydrogen through electrolysis. This hydrogen can then be stored and used later when energy demand is high or renewable energy production is low.
The main advantage of using hydrogen as a fuel is that it only produces water when burned or used in a fuel cell, making it a clean energy source that doesn't contribute to greenhouse gas emissions.
Why is Hydrogen as a Fuel Important?
The shift to using hydrogen as a fuel is important for several reasons:
- Environmental Impact: Hydrogen, when used as a fuel in fuel cells, produces only water as a byproduct, making it a clean energy source. This can significantly reduce greenhouse gas emissions and help mitigate climate change.
- Energy Security: Hydrogen can be produced from a variety of resources, including water, natural gas, and biomass. This diversification of energy sources can increase energy security and reduce dependence on fossil fuels.
- Versatility: Hydrogen can be used in a wide range of applications, from powering vehicles to heating homes and generating electricity. This versatility makes it a potentially important part of a sustainable energy future.
However, there are also challenges associated with using hydrogen as a fuel, including production processes that are traditionally quite energy-intensive. Things that must also be considered include storage and transportation difficulties, and the need for significant infrastructure development. Despite these challenges, the potential benefits of hydrogen make it an important area of focus in the transition to a more sustainable energy system.
Hydrogen Sources
As we have already established, hydrogen's atomic structure makes it particularly reactive. This characteristic has long led us to believe that pure hydrogen is hard to find in nature, resulting in a reliance on techniques like electrolysis to generate a supply. However, there have been various developments over the past couple of years that indicate this line of thinking may be wrong.
Oil Well Enzymes
Humans have been drilling for oil since the mid-19th century. As a result of this activity, there are countless abandoned and depleted wells around the world. Interestingly, scientists have discovered that, while the wells may be depleted of their oil, there remains an opportunity now to withdraw a more sustainable fuel from their depths – Hydrogen.
This is being made possible by companies like Cemvita Factor, which are developing specialized enzymes that, when introduced to depleted wells, work to break down lingering hydrocarbons into various components, with hydrogen being one of them. The company refers to hydrogen generated from this process as ‘Gold Hydrogen‘.
Natural Hydrogen Reserves
While introducing enzymes to depleted wells is a fantastic approach to revitalizing an existing resource, is it the only means of generating a supply? Interestingly, there have been multiple discoveries in recent years of massive, naturally forming, pockets of hydrogen gas. A few countries in which such examples have been found include,
- Australia
- Canada
- France
- Germany
- Japan
- Russia
- New Zealand
Despite these occurrences, scientists are still learning about the process of where the hydrogen is coming from, the vastness of reserves, and the potential effect on surrounding environments if withdrawn. Regardless, the potential for these deposits to accelerate the widespread adoption of hydrogen as a fuel source is huge.
Final Word
Overall, hydrogen remains a tantalizing alternative/replacement for our continued reliance on fossil fuels. Thankfully, due to the ingenuity on offer by scientists around the world, we may soon have access to more affordable and plentiful supplies of hydrogen through both natural and treated wells. With this being the case, there will be a subsequent decrease in the cost of production for hydrogen, making it an even more appealing fuel for companies like Cummins and Plug Power to develop solutions around.
