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Highlights
- AFC Energy inked a supply and collaboration agreement for a hydrogen fuel cell with Urban-Air Port Limited.
- Recently, ITM Power acquired a site for its second UK Giga factory in Tinsley, Sheffield, in collaboration with the University of Sheffield for £13.4 million.
- HydrogenOne Capital Growth inked definitive agreements for an equity investment of £20 million (€24 million) in Sunfire GmbH, an electrolyser producer.
Rising natural gas prices are driving up demand for clean hydrogen. The production of hydrogen by the splitting of the water molecule using electricity generated from renewable sources is about 10% cheaper in Britain than using power generated from natural gas, according to an analysis conducted by the Independent Commodity Intelligence Services (ICIS).
Hydrogen is regarded as a green source of energy as its production does not release carbon emissions, unlike natural gas. Due to the rise in commodity prices in 2021, green hydrogen is currently a cheaper alternative to fossil fuels and can be used in building heating systems and heavy machinery.
In the UK, a large majority of the hydrogen was generated from natural gas. However, rising natural gas costs are expected to change the equation. Green hydrogen prices are expected to fall further with declining technology prices and as more wind power plants become operational. Here is a detailed review of the investment prospect in three ‘green’ hydrogen stocks – AFC Energy, ITM Power and HydrogenOne.
(Data source: Refinitiv)
AFC Energy Plc (LON: AFC)
AFC Energy is an AIM-listed provider of hydrogen power generation technologies. The company inked a supply and collaboration agreement for hydrogen fuel cell with Urban-Air Port Limited, a company engaged in designing, developing and operating innovative ground infrastructure.
In August, AFC Energy inked a partnership with ABB, a provider of electrification and digitalisation technologies, to deliver its first hydrogen fuel cell system.
AFC Energy recorded revenue of £0.15 million for the six months period ended 30 April 2021. Its current order book includes more than 50 fuel cell deployment enquiries.
The shares of AFC Energy closed at GBX 59.00, down by 5.14% on Thursday, 11 November 2021. In the last one year, the shares of the company returned 210.53% to shareholders, and the market cap of the company stands at £456.85 million.
ITM Power Plc (LON: ITM)
ITM Power is engaged in manufacturing integrated hydrogen energy and storage solutions. Recently, ITM Power acquired a site for its second UK Giga factory in Tinsley, Sheffield, in collaboration with the University of Sheffield for £13.4 million. The new Sheffield factory would be engaged in manufacturing renewable hydrogen production equipment and is expected to cost £50 million - £55 million.
ITM Power’s total revenue and project grant funding were £5.1 million for the year ended 30 April 2021, representing a year-on-year decline of 6% from £5.4 million in 2020. Its loss from operations for 2021 was £26.7 million compared to £29.4 million loss in 2020.
The shares of ITM Power Plc closed at GBX 495.80, down by 4.84% on Thursday, 11 November 2021. In the last one year, the shares of the company returned 71.56% to shareholders, and the market cap of the company stands at £3,194.55 million.
HydrogenOne Capital Growth Plc (LON:HGEN)
HydrogenOne Capital Growth is the UK’s first hydrogen fund, which offers investment opportunities for companies engaged in clean hydrogen and related technologies. Last month, HydrogenOne Capital Growth inked definitive agreements for an equity investment of £20 million (€24 million) in Sunfire GmbH, an electrolyser producer.
Since its launch in July this year, HydrogenOne has invested in 19 global hydrogen sector listed equities, with an average market cap of £2.2 billion and an initial investment of £9.6 million. These companies are strategic players operating in the fuel cell, electrolysis, and clean hydrogen sectors.
The shares of HydrogenOne closed at GBX 120.20 on Thursday, 11 November 2021. The market cap of the company stands at £129.03 million.
