April 25, 2022 • Paul Rodden • Season: 2022 • Episode: 109
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In episode 109, Plug power makes one of their biggest announcements to date and Business Insider shares their thoughts on the hydrogen economy. All of this on today's hydrogen podcast.
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Plug power makes one of their biggest announcements to date and Business Insider shares their thoughts on the hydrogen economy. All of 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.
In a press release on April 19, Plug supplies Walmart with green hydrogen to fuel retailers fleet of material handling lift trucks, liquid green hydrogen to fuel up to 9500 lift trucks across Walmart distribution and fulfillment centers supporting the retailer's goal of zero emissions future by 2040. In the press release, it says plug power a leading provider of turnkey hydrogen solutions for the Global Green hydrogen economy announced on April 19, an agreement with Walmart for an option to deliver up to 20 tons of liquid green hydrogen to power material handling lift trucks across Walmart distribution and fulfillment centers in the United States. marking an additional step the retailer is taking to incorporate alternative zero carbon energy sources throughout Walmart's supply chain. This is one of the first green hydrogen supply contracts for plug validating the company's multi year investment in its green hydrogen network.
In a quote from Andy Marsh, the CEO of Plug, Walmart has been an early adopter of innovative hydrogen and fuel cell technology for over a decade, and our hydrogen powered solutions offer a tool to enhance productivity improvements for Walmart's operations. Now our green hydrogen solutions will provide Walmart with the ability to achieve significant carbon reduction. We are honored to expand our relationship with Walmart and realize our shared vision for a green hydrogen future. Now for a quick recap on green hydrogen. It's produced through electrolysis of water with electricity generated from zero carbon sources, and only oxygen is emitted during the process making it a clean, secure and affordable energy solution. Through plugs investment and its vertically integrated green hydrogen ecosystem. The company will deliver green hydrogen to Walmart facilities using a fleet of liquid transport plug has put into service using capabilities gained from its recent acquisition of applied cryo technologies. Walmart has worked with plug to adopt and expand hydrogen fuel cells throughout its facilities for over a decade, beginning with a 50 fleet pilot in 2012. And expanding to a fleet of 9500 and growing now the retailer is continuing to decarbonize its operations by striving to incorporate the use of green hydrogen throughout its facilities in an effort to pursue lift truck operations that are efficient, clean, quiet, and most importantly, more sustainable. And in a quote from Jeff Smith, the Senior Director of supply chain maintenance services, hydrogen is critical to helping us power a more sustainable supply chain and plug power's hydrogen solutions allow us to continue making progress sourcing green hydrogen can help bring Walmart closer to reaching our goal of zero emissions by 2040. Over the last several years plug has executed on a vision for a network of green hydrogen production facilities across the globe to meet demand for decarbonisation of the economy and address the urgent challenge of climate change.
The company is targeting 70 tons per day of green hydrogen production by the end of this year, and remains on track for 500 tons per day of production in North America by 2025 and 1000 tons per day on a global basis by 2028. Alright, so another big congratulations to plug power unsealing a huge deal with Walmart. And it was a move that investors seem to like as right after that announcement was made their stock shot up 10%. But to be honest, it's deals like these that I'm expecting to see more and more of as the hydrogen economy and the hydrogen market move from technological advances to actually finding off takers and establishing offtake agreements to start distributing the hydrogen that's being made. And I really wouldn't be too surprised to see this transition to Walmart's fleet of semi trucks in the next three to five years. Next, in an article from business insider.com Luke Lango from Investorplace writes, hydrogen stocks will produce the next Tesla and its $11 trillion revolution. In the article Luke writes, here's a little riddle for you this Tuesday morning, was super useful set to grow 8,000% Over the next decade, and can solve the world's current energy crisis. The answer is hydrogen. He continues by saying that each new technology has its quote unquote moment when it proves itself and goes on to change the world for computers in the 1980s when Microsoft and Apple made it CPUs that could fit on a desk for the internet.
That was In the 90s, when Amazon and eBay showed the world that it could build useful applications on the web, and for EVs, that was in the late 2010s, when Tesla started producing more affordable model threes. Currently, we're amid a global energy crisis. And it can't be fixed by hydrocarbons, nor solar nor wind. And so he asks what can fix the problem? Over the next few years hydrogen will solve it, as it does will witness the emergence of an $11 trillion hydrogen economy. And we'll see the next Tesla and hydrogen stocks. He continues by saying that in transportation markets, more energy density, which is what hydrogen is as the most energy dense element in the universe, that means hydrogen fuel cells have longer driving ranges, and faster refueling times than batteries. In stationary markets. It means they have more consistent and robust power output. And in all markets, it means hydrogen fuel cells are much lighter and more transportable. He says Make no mistake, hydrogen has some enormous value adds in the clean energy world. And once it becomes viable and cost effective, the companies producing hydrogen will be among the most important in the energy world, and hydrogen stocks will be some of the best performing tech stocks of the 2020s. But why now? Why over the last 50 years that hydrogen has tried to take charge.
Why now? Is it time to invest in hydrogen? He says For starters, there are favorable politics in the 70s No one cared about decarbonisation. Now nearly every country and company in the world has a net zero emissions target by 20 3040, or 50. And the Russia Ukraine war only underscores the need to disband reliance on Russian oil. It's pushing countries across the globe to establish energy independence via clean energy sources. The costs of hydrogen have plummeted also with advanced technology and economies of scale, hydrogen fuel cell costs have dropped 60% Over the last 10 years. Deloitte expects these costs to drop below electric battery and combustion engine costs within another few years. The technology has also dramatically improved technological breakthroughs and falling renewable energy costs have led to a new era of scalable green hydrogen production. Now hydrogen can be produced from renewable energy sources like wind and solar cost effectively, it's no longer reliant on natural gas, which was historically used to produce most of the hydrogen.
In other words, while the periodic table hasn't changed over the past 50 years, everything else has. And for the first time ever, the growth drivers for hydrogen have shown up at the same time. And so with all the hurdles of the past removed, the hydrogen economy will tip into its long overdue renaissance in the 2020s. And this will create what Morgan Stanley sees as an $11 trillion hydrogen market in the coming decades. Now concluding the article, Luke says the history of hydrogen as a viable clean energy source is riddled with empty promises and broken dreams. But this time is different. Finally, hydrogen is ready to reshape the world's energy landscape with an ultra affordable, energy dense, reliable and transportable clean energy. It's emerging when every country in the world looks to achieve energy independence. And consequently, it's the only energy source that's able to do so in a cost effective way. Alright, so a great article and good insights about the hydrogen economy in the next few decades.
Now, I've talked to stocks quite a bit lately, primarily because I think much like the previous press release that I just read about plug power, you're going to start seeing more and more of these smaller niche hydrogen companies making deals with larger players in the world, such as Walmart. And so the more deals like that are made, I think, you'll start seeing more and more bumps and stock prices for hydrogen companies, I also think you're going to start seeing a lot more hydrogen producing companies getting listed in the stock market. And really what all this is showing me is that when everyone thought that an infrastructure setup had to be built out, for the hydrogen economy to get a foothold, this really is starting to show that that's not the case. And what it really seems like more is that all of the different facets of the hydrogen economy are coming together to form that singularity that will really boost the hydrogen economy into the mainstream.
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