June 26, 2023 • Paul Rodden • Season: 2023 • Episode: 225
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Welcome to The Hydrogen Podcast!
In episode 225, A new segment of Australia is looking into residential hydrogen blending. And I go through three hydrogen stocks worth holding on to all this on today’s hydrogen podcast.
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Paul Rodden
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Transcript:
A new segment of Australia is looking into residential hydrogen blending. And I go through three hydrogen stocks worth holding on to all this on today’s hydrogen podcast.
So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where’s capital being deployed for hydrogen projects globally? And where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions that will unlock the potential of hydrogen. And this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast.
Okay, before I get started today, I wanted to share some exciting news. I reached out to Mark Klewpatinond the Global Business Manager for the low carbon solutions business of Exxon Mobil and asked if he would do an interview at the Hydrogen Tech Expo. While I’m there, I wanted to learn more about low carbon solutions and what their hydrogen plans are for the future. Now, Mark graciously agreed to come on to the hydrogen podcast and give us a glimpse behind the curtain so to speak. I have had the pleasure of talking with Mark on a few occasions through mutual connections, and I think he will be a fascinating individual to have on the show. They have made a number of major announcements recently and I would love to do a deep dive on them including the Baytown facility, Houston carbon capture hub concept, ammonia and carbon capture facility. It is quite impressive how quickly and effectively they have scaled up their low carbon solutions business so keep an eye out for that interview, it will be worth a listen.
And so with that said, first in an article and reuters.com Australia commits to build a $34 million renewable hydrogen plant in Victoria. Australia has greenlit plans to build a $51 million renewable hydrogen plant in Victoria state. Energy Minister Chris Bowen said on Saturday as the country moves to cut carbon emissions and boost alternative power resources. Bowen in a statement said the 10 megawatt electrolyzer will be built in Wodonga in Victoria would be bigger than any current such unit in Australia and be used to blend green hydrogen into gas networks to supply around 40,000 homes. Australia has been looking to lift hydrogen production to reduce reliance on hydrocarbons and meet the needs of trading partners looking to cut emissions. Bowen said construction of the new electrolyzer, which is a technology for producing low emission hydrogen from renewable power would start this year with this site set to go live and 2025. Funding for the project was coming from the Victoria government, the federal government’s Australian Renewable Energy Agency arena, and the Clean Energy Finance Corporation this according to Bowen, it will be powered by energy from a wind farm he said arena said in a statement, the funding would go to energy infrastructure company, Australian gas infrastructure group, which would deliver the project arena CEO Darren Miller said the amount of renewable hydrogen set to be produced was unprecedented in Australia.
Quote, it’s essential to scaling up Australia’s renewable hydrogen industry that we get these first generation projects up and running. Now in May Prime Minister Anthony Albanese’s, his labour government announced a $2 billion hydrogen Headstart program with the aim of accelerating the production and export of hydrogen fuel. Okay, so some promising news on further hydrogen developments in Australia. Now electrolytic hydrogen isn’t new to the country, but it is new in Victoria, which is basically in the opposite end from where most of the hydrogen is currently being produced. Now, so far, the vast majority of hydrogen has been developed in Western Australia with the primary purpose of shipping to Asia and Europe.
Now according to this report, the primary purpose of this Victoria project is to blend into natural gas residential lines. Now utilizing hydrogen for residential purposes, has been debated several times over with a rather concise conclusion that there are more efficient and effective uses for hydrogen, especially the more costly electrolytic variety than blending it with natural gas. But with that being said, it seems that outside of the Clean Energy Finance Corporation, all of the funding is coming from state and federal organizations, so they’re most likely not too worried about an economic return. Next, in an article from business insider.com How to retire rich hydrogen stocks addition, the inflation Reduction Act has boosted several industries and many entrepreneurs have been working for a cleaner and greener future for decades.
While it has been a dream of many, it is now a reality the hydrogen economy is slowly transforming our reality, and we can see a massive reduction in hydrogen fuel cell costs and subsidies for green hydrogen production. This has boosted several companies in the industry, now is the time to start looking for hydrogen stocks for wealth building. And some of the best hydrogen stocks for long term companies have had a solid presence in the industry and benefit from the subsidies the $370 billion incentives for clean energy in the inflation Reduction Act have had a big impact on hydrogen. And there’s also an incentive for clearing up the millions of tonnes of hydrogen produced in the country every year. Green hydrogen producers get a 10 year tax credit of up to $3 a kilogram. With these incentives and a massive push towards going green.
Several companies in the hydrogen economy are set to benefit and with that in mind, let’s take a look at the best hydrogen stocks for the long term. Now the first on the list is Bloom Energy. One of the top hydrogen stocks for retirement is Bloom Energy. Well it isn’t a pure play on hydrogen, it still offers green hydrogen applications and could benefit from the inflation Reduction Act. The company has electrolyzers that offer clean and carbon free fuel for the generation of power. This electrolyzer can produce clean hydrogen about 15 to 45% more efficiently as compared to the other products on the market. And so when paired with wind and solar energy, it can help multiple industries and can also be used in industrial processes as well as transportation. The company isn’t profitable yet, but it is close. And the recent quarterly results reported a record first quarter revenue of $275.2 million it soared 37% as compared to the same period over the previous year. The gross profit margin also saw an improvement year over year the company reported a loss due to a rise in operating expenses.
However, the company has maintained its outlook for the full year. Once the company manages to bring the operating expenses under control, it will be able to report better numbers the management expects revenue between 1.4 to 1.5 billion for the year. It is looking to execute some big projects in the coming year, which could take the stock even higher. Bloom Energy stock is trading for 16.50 apiece and is down 14% year to date, the discount on the stock is a good opportunity to buy. If investors can look beyond the losses this stock has immense potential to move upward in the coming years. Next on the list is plug power. There are multiple segments regarding plug power. While several investors think it has the potential to generate significant returns. Many just cringe at the mention of this company. It is one of the top hydrogen stocks to buy for retirement. A leader in the hydrogen fuel industry Plug Power has a market for hydrogen fuel cell technology which can build 60,000 fuel cell systems for the E mobility market.
With over 180 hydrogen fueling stations. The company aims to produce 500 tons of green hydrogen in 24 hours in North America. The company isn’t just limited to the US. It also has several contracts in Europe. Linde has been public for the last 25 years and investors who held the stock for the long term did take home some big gains, plugs stock is exchanging hands at 9.88 today and is down 18% year to date. On the other hand, the stock has generated over 380% returns in the past five years. One thing to remember about plug stock is that as a long term winner, the company saw 49% year over year growth in revenue in recent quarter and then revised the outlook downward to a range of 1.2 to 1.4 billion plug power has been unprofitable for years, and the author doubts that we’ll be able to report a profit this year.
When it comes to plug power it is natural to have doubts. It has diluted stocks significantly and hasn’t been able to generate a profit in many years. But if you believe in the future of green energy, particularly green hydrogen, it is one stock to consider. The company has a lot to prove and you will need a lot of patience but the patient’s could pay off in the long run. And last on this list is Linde, a global leader in one of the top industrial gas companies Lindy offers a range of hydrogen related products. It builds electrolytes that develop products to allow vehicles to run on hydrogen. The company is the largest liquid hydrogen producer in the US and is steadily increasing production capacity. This is a stable name in the hydrogen sector but the stock is priced at a premium currently exchanging hands at $370. The stock is up 16% year to date. While the stock is already high priced, there is still scope for growth, the strong financials and impressive history make Linde one of the best hydrogen stocks for the long term. And the first quarter the company saw a 16% rise in operating profit to $2 billion year over year and the diluted EPS came in at $3.42. After reporting solid financials, the management raise the top end guidance and now expects an EPS in the range of 340 to 350.
The company has a divided yield of 1.3% and recently announced a dividend of $1.28. Several reasons to make Linde one of the best hydrogen stocks for retirement. Linde has contracts with several organizations and will continue to generate a steady revenue stream. It has signed an agreement with Exxon Mobil for carbon dioxide takeoff, and has a contract to supply green hydrogen to Evonik in Singapore, and will also be supplied to the world’s first hydrogen ferry in Norway. Linde is a credible name in the industry and one of the top hydrogen stocks to own. Now, as much as I would love to take credit for this analysis that goes to Vandita Jadeja, who is a CPA and freelance financial copywriter, and who I think absolutely nails it on these three companies. Now, we recently had Bloom on the show to discuss the revolutionary developments in the electrolyzer space. And if you haven’t had an opportunity yet to listen to Ravi dive into their tech, I highly recommend you do so. And several months ago, we had Andy Marsh on the show who’s the CEO of plug power.
Now while I very much understand the frustrations investors have with plug, I believe they’re becoming much more focused on generating revenue by doubling down on their strength, including working with Amazon on providing fuel cell forklifts to new Amazon developments. Now Linde is the heavy hitter in this list. And I’ve made some great contacts there and can say that the Exxon Mobil deal was massive. And they’re looking to go into even bigger projects in the hydrogen space, and will have an extremely powerful impact on the hydrogen market in the US and Europe.
Alright, that’s it for me, everyone. If you have a second, I would really appreciate it. If you could leave a good review on whatever platform it is that you listen to Apple podcast, Spotify, Google, YouTube, whatever it is, that would be a tremendous help to the show. And as always, if you ever have any feedback, you’re welcome to email me directly at info@thehydrogenpodcast.com. Hey, this is Paul. I hope you liked this podcast. If you did and want to hear more. I’d appreciate it if you would either subscribe to this channel on YouTube, or connect with your favorite platform through my website at www.thehydrogenpodcast.com. Thanks for listening. I very much appreciate it. Have a great day.
