June 22, 2023 • Paul Rodden • Season: 2023 • Episode: 224
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In episode 224, Nikola puts on the short squeeze. And Italy is welcoming in some hydrogen power plants. All of this on today's hydrogen podcast.
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Nikola puts on the short squeeze. And Italy is welcoming in some hydrogen power plants. 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 an article in bloomberg.com, Subrat Patnaik and Carmen Reinicke write, Nikola's short sellers take a hit on EV's makers recent rally, Nikola Corp shares surged this week and a rally that's eating into paper profits for traders betting against the electric vehicle maker and setting them up for a short squeeze. Short sellers lost more than $80 million in paper profits this week. According to data from s3 partners LLC. Traders began betting against Nikola are now up only 55 million in 2023. Even though shares retreated Friday following 15% short sellers could still get burned. Earlier gains in the trading session follow the electric truck makers ousted founder Trevor Milton call for leadership change a statement that Nikola said was quote, in direct violation of the agreements he made when he left, the stock is down at 99% from its 2020 peak, the stock popped as much as 8% and after hours trading Friday when the company said it would eliminate about 10% of its workforce and an effort to cut costs.
And a quote from Ihor Dusaniwsky Managing Director of predictive analytics at s3 said we are seeing the start of a short covering squeeze and expect more shorts to trim their short exposure in Nikola and realize some of the profits they earned earlier in the year. Nikola earned ESeries highest short squeeze score of 100 on Thursday, shorting Nikola has become increasingly expensive as shares left to borrow dwindle, setting traders up for a squeeze an event that occurs when traders rush to exit their contrarian positions by buying back the stock they've shorted. The phenomenon often drives stock prices up putting more pressure on short sellers looking to cut their losses. options traders have also shifted from bearish to bullish trading calls for Nikola up at a record pace this week. Implied volatility on three month options jumped to the highest level since July of 2020. And the skew which measures the relative value of calls versus puts flipped from 14 points in favor of puts at the end of May to around even on Friday, signaling greater demand for bets on that shares will rise. Retail trading appears to have juiced most of Nikola's gains this week on Thursday alone net retail buying and Nikola reached $4 million, a record inflow after about two years of negligible trading according to data from Vanda research.
The rally indicates that quote, speculation is running rampant again. This according to Matthew Maley, Chief Market Strategist at Miller Tabak + Co, it shows that the stock market is getting frothy again. On a short term bias he said the gains have also helped drive Nikolas shares above the key $1 level, which allows the stock to comply with a NASDAQ rule requiring listed securities to maintain a minimum closing price of $1 per share. A flurry of recent news has boosted electric vehicle and technology stocks this month. Coherent corporation which recently unveiled its new laser processing heads for EV manufacturing is also rallying and on track to rise for a fifth consecutive session. The stock jumped 7% on Friday to extend its weekly gains to 41%. This week, it's best in 23 years. And electric vehicle Tesla, meanwhile, snapped its record 13 Straight sessions of gains earlier this week. Amid the hawkish stance taken by the Federal Reserve and market technicals. The winning streak had added more than $240 billion to its market valuation. Okay, so not great news for short sellers looking to profit from Nikolas struggles.
Now this isn't an uncommon practice short selling, and I know several people who do very well at it, but this is an industry that I would avoid doing such a thing at this time. Mainly I'm referring to the hydrogen industry but this can also play into the EV market as well. Hydrogen stocks are still way too volatile to predict a short and that's shown by Nicola these stocks can vary wildly from day to day. And while I fully understand the motive to short Nikola after all the stock is down 99% Over the last three years, they're making solid choices now in better business decisions. Now as time moves on and the volatility of the hydrogen market calms down, I think shorts and puts for hydrogen stocks will become more common, as these stocks move more in line with larger indexes. Next, on a press release on June 16, Edison inaugurated the most efficient thermal electric power plant in Italy, an industrial excellence to support the country's energy transition. The new plant of Marghera Levante is the first latest generation thermoelectric power plant in Italy and among the most efficient in the world. Thanks to the GT 36 turbine, it is able to reduce specific emissions of nitrogen oxides by up to 70% and carbon emissions by up to 30%. Compared to the current average of the Italian thermal electric fleet, the new turbine is also technologically ready for the use of hydrogen mixed with natural gas.
And so on June 16, Edison inaugurated in Porto Maghera, the most efficient thermal electric power plant in Italy and among the most efficient in the world, the first latest generation facility of its kind, contributing to the country's energy transition, an important milestone for the security of the Italian energy system, ensuring a highly flexible low carbon production that balances the intermittent nature of renewable sources, thus contributing to the achievement of the country's decarbonisation targets set by the PN IEC. The new plant Marghera is a revamping of an existing thermoelectric power plant, built in 1964 and constantly renewed in terms of technology. So much so that in 1992, it became the first natural gas combined cycle in Italy. Construction work took four years to complete employing up to 1000 workers during peak times, and 250 suppliers for total investment of around 400 million euros. The plant has an installed capacity of 780 megawatts and an energy efficiency of 63%. The highest output currently available, able to ensure a reduction of specific emissions of nitrogen oxides by up to 70% and of carbon emissions by up to 30% compared to the current average of the Italian thermal electric Park, satisfying the equivalent annual needs about 2 million families.
And a quote from Nicola Monti, Edison CEO. We are proud to be the first once again to lead innovation in Italy, thanks to a latest generation plant that is highly strategic for the flexibility and adequacy of the national electricity system, a goal we set as a responsible operator leader in the country's energy transition. Edison has in its DNA the ability to innovate, as reflected in its 140 years of industrial leadership. And today, we celebrate this important milestone thanks to the synergies with Veneto, a highly dynamic region and our partnership with an Italian excellence such as Ansaldo Energia. Our group has an investment plan amounting to 10 billion euros between now and 2030 dedicated to the energy transition, half of which for the growth of renewable energy and the new planet Marghera is a tangible proof of how different technologies can work towards the common goal of decarbonisation to ensure security of energy supply and economic sustainability.
And an a quote from Marco Stangalino, Executive Vice President and head of Edison power asset division, the construction of the new power plant in Marghera met a major challenge in particularly complex years, first due to COVID 19 pandemic and then to the high volatility of the markets. And in spite of everything we have continued to work with determination, aware that the new Marghera Levante plant is a strategic asset for the country to enable grid balancing and at the same time to accelerate the development of new installations for renewables to which we are also committed with ambitious growth targets. Edison's new 780 megawatt natural gas combined cycle of Marghera Levante consists of a 515 megawatt class H turbine from Ansaldo Energia and technologically ready for the use of up to 50% Hydrogen mixed with natural gas, a heat recovery steam generator with a catalytic system for the reduction of nitrogen oxides inside and a 265 megawatt steam turbine. The revamp involved dismantling gas turbines TG three and TG four which have been installed since 1992.
Heat recovery steam generators GVR three and four steam turbine TV one and steam generator B2 the plant structure itself was also rationalized reducing the number of chimneys from five to three with an improvised visual impact as a result, when the new production setup became fully operational, the 2001 TG five and TV two generating sets, which ensure the continuity of steam supplied to the plants of the Marghera industrial area and the electricity to the national grid during the construction phase, were kept in reserve as backup in the event of plant and maintenance Marghera Levonte plant now fully operational currently employs approximately 40 people, including the operation and maintenance team, and other corporate staff. Okay, so why am I covering this plant on today's show? Well, here in the US, it's still special to hear about newer power plants getting funding or being constructed, that have the ability to utilize hydrogen with a natural gas mix, it's much more uncommon to hear of such things in Europe. That's why this plant announcement is such a big deal. Now, what I would like to know is when they're planning to incorporate hydrogen into that natural gas turbine mixture, as well as what percent of that mix will be hydrogen. But aside from that, what I find most interesting about this announcement is the inclusion of the NoX reduction percentage now as we know, nox's resulting gas from burning hydrogen, so to see that they not only acknowledge that, but also comment on their estimated capture rate, to me is a positive sign. And I look forward to seeing more of these plants getting announced in the near future, as more energy grids, both here in the US and in Europe are getting tested harder every year.
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