The stock market’s volatility is rising again, which makes it a great time to look for investment opportunities. Renewable energy is receiving global attention for its potential in tackling carbon emissions. Green hydrogen is one of the newest technologies in this space. And what’s more, it could turn out to be a rewarding investment opportunity too. In this article, we discuss green hydrogen and provide a list of seven green hydrogen stock picks.
What is green hydrogen?
In an article titled ‘Why Green Hydrogen Is The Holy Grail of Renewable Energy,’ Profit Trends’ Engineering Strategist David Fessler categorized hydrogen-making processes into four types:
- Gray hydrogen: It is a by-product of the refining processes for fossil fuels and is made using the steam methane reformation process.
- Brown hydrogen: This is made from the gasification of coal and has been used for a long time. Greenhouse gases are byproducts of this process.
- Blue hydrogen: This uses the production of today but adds carbon capture and storage. This does not have the scale for widespread use and has not been commercialized.
- Green hydrogen: This is produced by electrolysis. Renewable energy is used to separate the two basic components of water: hydrogen and oxygen.
The potential of green hydrogen
Fessler weighs in on the investment potential of green hydrogen. Firstly, according to Fessler, surplus renewable energy can be used for the production of green hydrogen. Secondly, it can be stored. This makes it a useful resource for renewable sources that are intermittent, such as the ones dependent on wind or solar power.
And thirdly and lastly, in his own words, “In addition to hydrogen’s uses mentioned above, green hydrogen opens up a wide range of applications too. Steelmaking and cement making are two industries that are very difficult to decarbonize. Each has a different production process. But both share one big challenge: needing large amounts of continuous, high-temperature heat. And we can’t just stop making either material. Cement and steel are essential building blocks for today’s modern construction. But each of them is responsible for about 7% of energy-related GHGs. That’s because their heat sources are fueled by natural gas. Switching to green hydrogen is a key part of decarbonizing them.”
Challenges with green hydrogen
With a lower volumetric density than natural gas, existing natural gas pipelines will need to be modified to carry green hydrogen. Production costs are high at the moment, limiting its production. However, Fessler believes that costs could go down to a third of the present costs as early as 2030.
6 Green Hydrogen Stocks To Look Out For
With the renewable energy focus of the Biden administration, exciting times could lie ahead for infrastructure and green energy stocks. Here is a sampling of 6 such stocks.
Linde (NYSE: LIN)
Ireland headquartered Linde is a producer and seller of atmospheric gases like nitrogen, oxygen, hydrogen, helium among the better-known ones as well as some rare and specialty gases. Its focus area appears to be hydrogen. Globally, Linde’s technology is used in over 160 hydrogen refueling stations. It is hoping to soon start the first hydrogen refueling station in Germany meant for passenger trains.
Air Products & Chemicals (NYSE: APD)
Pennsylvania-based Air Products & Chemicals is a US company with 19,000 employees across 50 countries around the world. It sells industrial gases and chemicals. It could be a beneficiary of Biden’s proposed infrastructure plan.
With its first hydrogen fueling station established in 1993, APD was one of the first companies to do so. It has also worked closely with NASA for almost 50 years. It has supplied liquid hydrogen for all space shuttles ever launched as well as for the Apollo and Mercury missions.
FuelCell Energy (Nasdaq: FCEL)
Connecticut-based FuelCell Energy is an established player in the space, with its business of designing and manufacturing fuel cell power plants. The surplus hydrogen, over and above what is needed to power production, that it generates from its SureSource plant, is supplied for transportation and industrial uses.
FuelCell was selected for $8 million in funding by the US Department of Energy, for designing and building a SureSource electrolysis platform for producing hydrogen.
The delivery of 12 million megawatts of environmentally responsible energy, a significant milestone, was announced by the company recently.
Ballard Power Systems (Nasdaq: BLDP)
Canadian Ballard Power is in the business of developing and manufacturing hydrogen fuel cells needed by automobile and engineering services and is known as one of the leading providers of fuel cell solutions based on clean energy.
A recent success of its technology was the purchase of ten of its fuel cell modules by Belgian coachbuilder Van Hool, for its buses. It also has a partnership with German automaker Audi for fuel cells that is currently planned till 2022.
Plug Power (Nasdaq: PLUG)
New York-based Plug Power is a known name in hydrogen fuel cells. Its focus is on the replacement of standard car batteries with hydrogen fuel cell systems. It has recently announced its plans for setting up two new green hydrogen plants in the US, with the objective of providing a network of alternatives for transportation that are hydrogen-fueled.
Plug Power recently announced an agreement with French automaker Renault under which the French company will develop, build and market commercial vehicles.
Toyota Motor Corp (NYSE: TM)
Toyota Motor Corporation (NYSE: TM) is one the largest car companies in the world that has a stake in the $1.17 billion hydrogen fuel-cell vehicle market. The Japanese automaker is ranked eighth in the top 9 hydrogen fuel cell stocks to purchase. Toyota Motor Corporation (NYSE: TM) produces and sells hybrid cars, luxury vehicles, and electric cars. It markets hydrogen fuel cell-powered vehicles under the Mirai or Sora brands.
