In light of all the global climate changes over the past decades, one fact stands out. Mankind through power generation and transportation is now and has over time produced an enormous carbon footprint.
Europe and other countries have begun regulating fuel types and mile per gallon consumption of fossil fuels, whose consumption is to be replaced.
The big question is what to transition to?
During the US mission to the moon the astronauts needed electricity onboard the space capsule for the computers, air handling systems, lights, and other systems. The solution NASA found was hydrogen fuel cells. These units would produce power and exhaust water vapor.
We have all heard about fuel cells for cars. But there are many more uses such as ferries, industrial, residential, and so on..
Fuel cells are devices in which an electrical charge is created by a chemical reaction. The reaction is between hydrogen and oxygen from the air. In between, them is a material acting as a catalyst – that is where the electric charge is developed.
There are other types of fuel cells besides hydrogen that do use other polluting fuels, but that’s a whole other can of worms, for another time.
The good news is the hydrogen fuel cells give off water instead of greenhouse cases.
One inconvenience is stored. Hydrogen has less energy by volume than regular car gas. So for cars, you will need a larger tank. This tank will store it at lower temperatures under more pressure as well than regular fuel.
The Fuel Cell Transportation Applications
Fuel Cell car engines are electric engines, except that you don’t spend hours charging the battery. The hydrogen can be refuelled from special gas pumps.
Fill her up and drive away just like a regular gas car.
Electric cars running on batteries get about 200 miles. Imagine taking your electric car to Miami, Florida from York, Maine in the USA. The trip is roughly 1600 miles.
In a car, nonstop, you could do it in about a day. In an electric car, you would have stopped for about 8 hours for every 200 miles depending on whether you used Level 1 or Level 2 system. That is a huge drop in efficiency.
The hydrogen fuel cell like your regular gas car can stop and refuel as needed. But we need a bit more infrastructure for that to happen.
Can electric cars go fast, you may ask?
They can drive the speed limit and then some. You won’t be trading your gas guzzler for a go-cart. In fact, Tesla had an impressive 0-60 test record.
However, there are three pieces of bad news for US drivers:
- First, where do we fill the car up? California has about “200” stations clumped in Southern California and the San Francisco Bay area. Connecticut has one. There is also one station in mid-state Florida. At the time of writing, there is nowhere else to fill up in the US. Europe is far ahead of the US in filling stations. Yet even in the EU countries, there is lots of room for improvement.
- The second piece of bad news is the fuel price. Hydrogen is now $14.00 per kilogram or in gasoline-equivalent, it would cost $5.60 per gallon.
- The third piece of bad news in the US is the vehicle cost. They are a lot more expensive than gas cars. Hopefully, mass production will bring the cost down. We are reminded that batteries for electric vehicles were almost cost-prohibitive a few years ago, they have dropped in price too. It is hoped that by 2025 they will come down to $100.00 per Kilowatt-hour.
One added cost factor for fuel cell cars is the added need for batteries. The fuel cells generate power, but, in most applications, send that power to batteries. The batteries then send power to turn the wheels.
Some sources believe a great application is for trucking, as the larger vehicles have more space to house the additional weight and volume of batteries.
What Cars Do Auto-Companies Have Available Now?
The 2020 models available in the US are Honda Clarity, Hyundai Nexo and Nexo Blue, and the Toyota Mirai. However, on the world stage almost every big name in the auto industry is developing or producing these vehicles including GM and Ford. There are trucks and busses that run on hydrogen fuel cells as well.
As of December 2019, there were at least 25,000 industrial trucks and 400 busses employing hydrogen fuel cells globally.
What markets are adopting hydrogen and for what purposes?
- In 2019 Wuhan, China had 100 hydrogen fueling station. The Chinese government’s goal for Wuhan is 5,000 fuel cell vehicles by 2025.
- In 2018 France made a commitment to be a leader in hydrogen rolling out a $117million plan for hydrogen technology.
- Germany sees hydrogen potential beyond autos. One ambitious idea is to use hydrogen to decarbonize industry.
- Norway is currently using hydrogen in ferries.
- South Korea will spend $1. 8billion in subsidies for both filling stations and FCEV vehicles.
- Japan as of 2019 was the leader in FCEV development.
- The US and Canada as of the fall of 2019 were far behind except for California which hopes to be a leading market.
Hydrogen Fuel Cells are also used as stand-alone power systems and backup power systems. For example, the company Fuel Cell Energy (NASDAQ: $FCEL) produces several products inkling the Sure Source 1500 capable of providing 1.4 megawatts of power in a unit the size of a tennis court. The company Plug Power produces several types of fuel cells, and fuel cell engines.
What Should You Consider If You Wanted To Invest In The Industry?
There are many hydrogen-related stocks. It should be noted that the industry is still developing. From a fundamental perspective, many of these firms are not profitable yet. Some companies in the industry have a product mix that includes hydrogen fuel cells as well as other types of fuels.
While some stocks have demonstrated good performance, it is purely based on speculation, where investors have rallied behind any good new announcements.
The promises and projections hold for most – for now – yet for some, like Nikola, they might start to crumble should the allegations prove true. We’ll see in due course.
However, should the case turn sour, it definitely won’t be the sunniest days for the industry. In terms of industry comparisons, analysts are using the electrical equipment industry.
Last note for more technical traders, the Beta’s all run over high – making the stocks quite a bit volatile. Where is the fun if they aren’t moving, right?
What stocks might you consider?
Many sources aim potential investors to a handful names, we are taking a deeper look.
- Fuel Cell Energy on NASDAQ: $FCEL
- Plug Power on NASDAQ: $PLUG
- Ballard Power on NASDAQ: $BLDP
- Bloom Energy Corp on NYSE: $BE
$FCEL – Their stock chart as of October 15, 2020 shows the stock is $2.43 and is slightly down its 52-week high of $3.50. Their revenue in the trailing twelve months is down by nearly 4%.
Their EPS is “- $.58” over the last twelve months. That being said, EPS grew 93.26% over the same period. They are partnered with Exxon and their primary business is stationary fuel cell power plants for distributed power generation.
$PLUG – The stock has as of October 15, 2020 pushed through its former all-time-high of $14.00.
This company’s primary focus is hydrogen fuel cell turnkey solutions for the electric mobility and stationary power markets in North America and Europe.
They are providing systems for commercial and residential users, globally. Earnings per share is “-$.29” for the trailing twelve months. That being said during the same period revenues rose 35.35% and EPS grew 21.62%.
Plug Power’s technology is used at Walmart and Amazon for forklifts.
$BLDP – The stock as of October 15, 2020 is slowing inching back up towards its all-time-high of $21.61, after a dip down. Ballard Power is based in Canada and its primary business is the design, development, manufacture, sale, and service of proton exchange membrane fuel cell products, offering heavy-duty modules, fuel cell stacks, backup power systems, and portable power.
The company’s EPS over the last twelve months was “-$.18”. EPS declined by “-11.76%” over the same period, yet revenue grew 29.88%.
The company’s focus is “Bloom Energy Corporation designs, manufactures, and sells solid-oxide fuel cell systems for on-site power generation”. Over the last twelve months EPS was “-$1.97”. During the same period revenues grew by 17.92% and EPS by 43.39%.
The hydrogen fuel cell industry is finally starting to really develop. Already the number of potential applications has grown from cars to power units to forklifts.
As we reflect on this technology and the investment risk we can recall when the dot com era of the late 1990s.
There was a lot of promise in the air.
Many stocks of companies that were new and had not made any profit yet, rose. Some made it, some didn’t. As with any new technology, there are significant risks.
These companies have yet to establish a long track record of profitability. That having been said, given the global climate changes the need for new fuel solutions that are not toxic becomes clear.