Paul Rodden • Season: 2023 • Episode: 268
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In episode 268, BBVA invests big in Hy24. I’ll go over this big news and give my thoughts on today’s hydrogen podcast.
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BBVA invests big in Hy24. I’ll go over this big news and give my thoughts 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.
Before I get into today’s topics, as you know, COP 28. has started and there are a flurry of hydrogen conversations going on. Now, I’ve been lucky to get a sneak peek at one piece of news that I find very interesting. Now due to the embargoed nature of the news. I can’t discuss it right now, but will on the next show. It’s an integral piece of the future of electrolytic hydrogen and the electrolytic hydrogen economy and something that I expect to be adopted globally in certain areas looking to grow their electrolytic hydrogen platform. I’ll also put up the press release on LinkedIn tomorrow, after the embargo drops, but make sure to listen in on the next podcast when I give my insights on what this news means around the world. Now, onto today’s topics.
First up today from BBVA.com On December 1, Hy24. Our aim is for hydrogen to become the most promising asset class of the decade. They say Producing hydrogen from renewable energy is a key challenge on the path to decarbonization and asset managers such as Hy24 are confident that this technology will reach maturity within the decade. BBVA has invested ten million in one of Hy24’s funds, which uses its capital to finance large-scale clean hydrogen infrastructure projects. Notably, it is the world’s largest clean hydrogen fund. The aim is to stop using fossil fuels and move the world with renewable energy. Decarbonization is one of the great challenges of the 21st century and the biggest challenge in addressing climate change. To make this happen, many agents have set their sights on hydrogen, an element from which energy can be obtained without emitting greenhouse gases (GHGs) when it is produced through electrolysis process that leaves behind only one form of “waste”: water.
One of these hydrogen trailblazers is Hy24, deploying today the world’s largest clean hydrogen infrastructure fund — in whose BBVA has invested—and which is gathering an ecosystem of industrial and financial leading players. Its main objective is to expand the global hydrogen economy through investment opportunities linked to the Sustainable Development Goals (SDGs). They say the challenge in making hydrogen a genuinely sustainable option lies in how to produce it efficiently with renewable energy. When done successfully, the resulting product is known as green hydrogen. Over the past two years, Hy24 has built up a reputation as a benchmark in the hydrogen ecosystem: through its Clean hydrogen Infrastructure Fund, the company is investing in the most promising large-scale clean hydrogen infrastructure projects all around the world. And a quote from Oihane Martínez Balagué, Investment Vice President at Hy24 “One of the greatest assets of the joint venture comprising Ardian (Europe’s largest private investment house) and FiveT Hydrogen (a clean hydrogen investment pureplay) is its team, which boasts an impressive track record in infrastructure fund management, with experience and expertise in the hydrogen sector.
On the investment side, Hy24 has based its approach on the co-investment which is enabling the creation of synergies and is unlocking new opportunities.” The fund invests in the entire clean hydrogen value chain, from upstream projects like green hydrogen production, to downstream applications like captive fleet and refueling stations. In the middle of this process we have midstream, which focuses on distribution and supply chain. Hy24’s ambition includes as well the scaling up of the hydrogen technologies like the electrolyzers. Oihane further says “The Fund has entered some of the most promising entrepreneurial adventures in Europe, Australia, and Middle East, to support projects which will be among the largest one in the world with gigawatts of competitive renewable capacity deployment to decarbonize hard-to-abate established industries thanks to clean hydrogen and its derivatives.”
Over the past two years, Hy24 has found that there are many opportunities to be had in the upstream segment. The mobility sector is still relatively immature, so investments there are expected to grow over the next decade. JHy24 is currently deploying its 2 billion euros infrastructure fund and has already made seven corporate investments into Hy2Gen, Enagas Renovable, H2 Mobility, Everfuel, H2 Green Steel, InterContinental Energy and Elyse Energy. Again, according to Oihane, “We don’t have a boilerplate project—each one is different—, although we generally try to make sure they have an industrial large scale potential.” She continues by saying “In our project with Enagás in Spain, in which we invested in the summer of 2022, our shared goal is to achieve 6.1 gigawatts of electrolysis and 8.4 gigawatts of renewable power. We are also pursuing biomethane projects. Partnering up with Enagás gives us a clear edge that few other players can offer.
At Hy24 we also know that Spain is a key country. In Europe, the Iberian Peninsula and the Nordic countries offer the greatest potential in unlocking the value of renewable energies.” So what about the pros and cons of hydrogen? Accelerating decarbonization is essential and we need to achieve this over the current decade. Hy24 is quick to point out that fossil fuels still account for the majority of primary energy supply and for 84% of global emissions. Their ongoing use continues to increase greenhouse gas emissions, which in turn accelerate climate change. If nothing changes and greenhouse gas emissions do not abate, the next few years will see a rise of 1.5 degrees Celsius compared to the pre-industrial era (1850–1900), i.e. the upper limit set by the Intergovernmental Panel on Climate Change (IPCC) if we are to avoid the worst consequences of climate change.
To prevent this from happening, countries around the world have been busy developing emission reduction plans in which new forms of energy generation play a leading role. However, significant challenges still remain, such as multiplying investment in renewable energies or electrifying sectors such as transportation and industry. Again, according to Martínez Balagué again, “The countries with the greatest renewable energy generation capacity are not the ones that consume the most energy. Moreover, the hours of solar power generation tend not to coincide with hours of peak consumption.” She continues by saying “Hydrogen allows us to reduce this volatility, as it can be transported efficiently and also used in sectors such as industry and shipping. Thus, it can help take some of the strain off the electricity grid, which is stretched to breaking point,” And of course an investment is needed to achieve all this. An investment to make green hydrogen competitive, to develop the necessary technology and to deploy infrastructures that will allow it to unlock the clean hydrogen economy.
She also says “We are now the largest hydrogen fund worldwide, and we have a clear calling to develop the ecosystem, make it more mature and embrace the challenges that are now emerging.” Okay, so some relatively heavy investment news coming from one of the most respected banks around the world. BBVA investing 10 million euros and one of Hy24 funds. Now this release doesn’t specify which fund BBVA is investing in. But I’d be surprised if this investment doesn’t show a significant return potential. If you don’t know what Hy24 is, it’s a JV or joint venture between Europe’s largest private investment house Ardian and the world’s first pure play clean hydrogen investment manager FiveT Hydrogen Ardian manages or advises $156 billion globally and FiveT Hydrogen was created to enable the foundation of the hydrogen economy.
Hy24 has been making some great strategic investments over the last two years recently, with Intercontinental energy and Elise energy targeting green hydrogen and E fuels development respectively, as well as their investment into h2 Green steel, which has raised about a billion and a half euros in equity to fund the world’s first Giga scale electrolyzer for large Scale green steel development. So this JV has been making some very big and very critical investments in hydrogen projects. And now with BBVA coming on as another financial backer, this just gives the hydrogen economy more financial leverage to push large scale projects from conception through fid and into production.
All right, 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 will be a tremendous help to the show. And as always, if you ever have any feedback, you’re welcome to email me directly at email@example.com. So until next time, keep your eyes up and honor one another.
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.