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Highlights
- The use of hydrogen is expected to lower the number of wind turbines required in the country in 2050 by 75%.
- Recently, Ceres Power Holdings received £23 million funding from the UK Department for Transport and Innovate UK for aiding 55 projects for developing zero-emission vessels.
- ITM Power’s sales revenue increased by 30% year-on-year to £4.3 million in FY 2021 compared to £3.3 million in 2020.
According to the Energy Networks Association, the UK could use the electricity generated by solar and wind farms during the summer to generate hydrogen, which can be used to address the increased demand during the winter months. Oil and gas fields can be used to store hydrogen that businesses and households would require throughout the winter months. Green hydrogen can serve as a source of clean energy that can offer protection from fluctuations in the international energy markets.
The use of hydrogen is expected to lower the number of wind turbines required in the country in 2050 by 75%. An estimated 60 to 80 gigawatt hours of hydrogen could be generated by the wind and solar farms during summers, an equivalent of nearly 25 nuclear power plants. Some of the noteworthy producers of electricity from hydrogen in the UK include AFC Energy, Ceres Power and ITM Power.
(Data source: EODHD/Others)
Let us explore the investment opportunity in the above mentioned three hydrogen stocks.
AFC Energy Plc (LON:AFC)
AFC Energy is a company engaged in developing alkaline fuel cells which uses hydrogen for electricity generation. Last month, the company inked a hydrogen-fuel-cell supply-and-collaboration contract with Urban-Air Port Ltd.
The shares of AFC Energy are trading at GBX 45.55, down by 0.98% as of 10:21 AM BST on 12 October 2021.
For the half-year ended 30 April 2021, AFC Energy’s revenues stood at £0.15 million. The company had a book of more than 50 qualified fuel cell deployment enquiries as of 30 April 2021.
In the last one year, the shares of AFC Energy gave a return of 153.0% to shareholders, and its market cap currently stands at £338.23 million as of 12 October 2021.
Ceres Power Holdings Plc (LON:CWR)
Ceres Power Holdings is a specialist fuel cell technology firm. The company’s patented Ceres SteelCell™ is fuel flexible technology and is expected to run on fuels such as hydrogen and biogas. In September 2021, Ceres Power Holdings received £23 million funding from the UK Department for Transport and Innovate UK for aiding 55 projects for developing zero-emission vessels by 2025.
The shares of Ceres Power Holdings are trading at GBX 998.5, up by 1.26% as of 11:15 AM BST on 12 October 2021.
For the half-year ended 30 June 2021, Ceres Power’s revenue and other income rose by 96% to £17.4 million compared to £8.9 million in H1 2020. The company’s order book was £42.0 million and pipeline of £43.8 million as of 30 June 2021.
In the last one year, the shares of Ceres Power Holdings gave a return of 37.5% to shareholders, and its market cap currently stands at £1,852.32 million as of 12 October 2021.
ITM Power Plc (LON:ITM)
ITM Power is engaged in designing, manufacturing and selling hydrogen energy systems for energy transportation, storage, and industrial sectors in the Germany, Europe, the US and UK. It provides hydrogen gas for clean fuel, power-to-gas, and industrial hydrogen applications.
The shares of ITM Power are trading at GBX 409.72, up by 5.76% as of 10:59 AM BST on 12 October 2021.
ITM Power’s sales revenue increased by 30% year-on-year to £4.3 million in FY 2021 compared to £3.3 million in 2020. The company’s loss from operations was £26.7 million compared to a loss of £29.4 million in 2020.
In the last one year, the shares of ITM Power gave a return of 26.1% to shareholders, and its market cap currently stands at £2,142.06 million as of 12 October 2021.
