by Anette Weingärtner | Jan 20, 2025 | Germany, Networks, News
European multi-gas network is launched
In the EU project SHIMMER, the German institute for materials research and testing BAM is working on a comprehensive knowledge database. There, important information on standards for safe materials and components as well as on the European gas infrastructure is to be made available. SHIMMER will be led by the Norwegian research organization SINTEF. The project brings together twelve European institutions, including national institutes and gas network operators from the countries Spain, Italy, Norway, Poland, Belgium, the Netherlands and Germany.
The injection of hydrogen (H₂) into existing gas networks brings with it both technical and regulatory challenges. They particularly concern the material integrity of pipelines and the harmonization of legal requirements. The project SHIMMER (Safe Hydrogen Injection Modelling and Management for European Gas Network Resilience) involves improving understanding for the integration of hydrogen into the existing gas infrastructure and with that support overall the market ramp-up of safe hydrogen technologies. The research project already started in September 2023 and will end in August 2026. Financing comes from the EU program “Horizon Europe – Clean Hydrogen Partnership.”
Functionality and security of the gas network
Already the title Safe Hydrogen Injection Modelling and Management for European Gas Network Resilience indicates the objectives associated with the project: For a planned higher injection of hydrogen into the existing gas network, reliable models or simulation tools and secure management systems is to be provided, to ensure the reliability and robustness of the European gas network.
“Injecting H₂ into the existing gas network in higher proportions or in higher concentrations is associated with technical challenges, because the infrastructure was not originally designed for this. Therefore, tools, test methods and simulation programs for planning and operation as well as an overview of the existing infrastructure must be created, to guarantee the security of the network and its functionality,” explains the project manager Dr.-Ing. Oded Sobol from the Bundesanstalt für Materialforschung und –prüfung (BAM).
As part of the stated overarching objective, additional specific goals are being pursued, such as mapping and providing an overview of the existing infrastructure with regard to materials, components, technologies used and the suitability of these for H2. This data will be part of a public knowledge database, through which users should receive early information about the suitability of the infrastructure. In addition, suitable material testing procedures as well as tools or methods for inspecting and detecting leaks should be developed.
It also involves creating simulation tools, for example for planning or simulating gas quality with varying feed-in and varying consumption based on rate and concentration. The gas composition of the project partners is also a question for the researchers. A certain gas quality is to be ensured by the project, and strategies for the injection of H₂ into the gas grid are to be developed. Last but not least, planned is to create guidelines for risk management and to develop simulation studies for running through various scenarios.
For the project partners, these topics are not new, though. The gas network operators have firmly anchored H₂ injection into their strategy and future plans. And the research companies involved have already gained experience with the topic in their respective specialist areas.
Preceding projects to be taken into account
Thus, in SHIMMER, data from participating industry partners – mainly European long-distance grid and distribution network operators – will be collected. The SyWest report – tests of representative material samples from pipes in the German gas grid – will be made use of in the project. “There will possibly be a correlation to the VerifHy database (www.verifhy.de), in which pipeline manufacturers have altogether provided information on the H2 readiness of their products,” explains the project manager Dr. Heiner Schümann from SINTEF Industry.
Other projects that are being examined for results that can be used for the database include:
- the EU project HIGGS (list of suitability of TSO pipe material – incomplete)
- the British project HyDeploy (field tests with 20% H2 injection in the UK)
- the EU projects THyGA (test end consumption devices and their suitability for H2–natural gas mix, such as heat pumps, water boilers and ovens, CHP – combined heat to power, distributors, etc.), CEN H2 PNR (literature research for many critical areas, including gas quality and steel pipes) and CANDHy (compatibility for non-metallic materials).
The possibility of collaboration is being discussed with those involved in these projects.
Fig. 2: European projects
Five work packages
In terms of content, the project consists of five work packages, which are to be carried out simultaneously. “There are dependencies on different tasks within the work packages, however, that must be taken into account when planning the schedule,” says Schümann.
The first work package, led by SINTEF, bears the title “Projektmanagement und Koordination (Project Management and Coordination).” “The aim here is to ensure that the project is carried out on schedule with the given resources and the expected quality,” says Schümann.
The second work package “Gasinfrastruktur und Betriebsbedingungen (Gas Infrastructure and Operational Conditions)” is under the direction of BAM. “Our task is to obtain information about the existing European gas infrastructure in relation to metallic materials (pipes). For this, we’re using existing data from other projects as well as from the literature and are also collecting new information from our partners,” says Sobol. In addition, they are obtaining information about operating conditions. Applicable standards and laws will also be viewed, compiled and checked for agreement. “Ultimately, we want to organize all information into a user-friendly database and make it publicly accessible,” says Sobol.
The third work package is entitled “Integritätsmanagement und Sicherheit (Integrity Management and Safety)” and falls under the responsibility of the Spanish research center TECNALIA. The aim here is to check the suitability of common material and compatibility test procedures for the planned higher H2 feed-in. In addition, a GAP analysis is carried out from the perspective of the need for adaptation, changes or new procedures and regulations. Also guidelines for inspection methods for pipes will be worked out and recommendations for leak test methods conceived. Ultimately, it is about making recommendations for risk analysis regarding leaks and developing tools for this.
In the fourth work package “Sicherung des Durchflusses (Flow Assurance),” led by the Dutch organization for applied scientific research TNO, realistic test procedures will be described and existing simulation programs evaluated for their suitability. In addition, a selection of suitable programs are to be improved and adapted so that corresponding scenarios can be played out. Finally, suitable technologies for the measuring and monitoring of gas quality will be evaluated.
In the fifth and final work package “Verbreitung, Kommunikation und Verwertung (Dissemination, Communication and Exploitation),” led by the European gas research company GERG, the dissemination of the results will be ensured, meaning that they reach the right end users, decision-making bodies and stakeholders. GERG is responsible for the publication of articles in magazines and other public media as well as for the organization of conferences. Furthermore, their task is to communicate with interest groups during the project phase in order to obtain feedback and necessary information.
In their work, the researchers within the consortium face a number of challenges: “First of all, the confidentiality of information from industrial partners should be mentioned. At the same time, we intend to publish as much as possible,” says Sobol. In addition, the designation of materials, for example steel qualities, is not 100% standardized and different materials with sometimes different names are used across Europe. The environment (gas quality, climate) to which the different materials are exposed also differs. In addition, the industrial partners pursued different interests with regard to the scenarios for simulation studies. A consensus on the blend of H₂ (2, 5 or 20 %) does not exist either. “In our project, seven countries are represented. The problem is also how we should cover the information from the rest of the European countries,” says Schümann.
Publication of the interim results is imminent
The first results are already available. “We are currently awaiting approval and clearance from the European Commission, however. These will then be accessible online and will also be linked on our website” says Schümann. The publishing of the database on the project website (https://shimmerproject.eu/) as well as other scientific publications is projected to happen, according to Sobol, by the end of the project.
Industry and legislation benefit
After the project is completed in August 2026, most results, including the database, should be publicly accessible. Benefitting from this could, on the one hand, be industry: Planning for H2 injection will be simplified. Network operators, suppliers and manufacturers of pipes and equipment save time and money. On the other hand, legislative bodies can adapt their guidelines. “Today there are neither harmonized requirements nor feed-in limits nor regulations for testing and suitability procedures for H2 feed-in for Europe. The results of this project will be a basis for such a standardization process,” says Schümann.
https://shimmerproject.eu
by Hydrogeit | Jan 17, 2025 | Germany, Market, News
Big plans and professional marketing – HH2E’s appearance was downright impressive, but on November 8, 2024, the Hamburg-based start-up filed for insolvency on its own initiative. The reason for this was probably that the British majority shareholder Foresight Group did not want to finance the planned large-scale H2 project in Mecklenburg-Vorpommern after all.
Plans included the construction of electrolyzers near Leipzig and in Lubmin. On the Baltic Sea, there was talk of building a 100-MW plant (1,000 MW by 2030) on the site of the former nuclear power plant and investing over €45 million. Although the planning for this is continuing for the time being, there is currently no investor, according to the latest reports.
HH2E CEO Alexander Voigt told Mitteldeutsche Zeitung: “We remain committed to maintaining continuity and stability in our operations while we work on a long-term solution. I am convinced that we will soon find a strategic partner who shares our passion for green energy and can support the vision of HH2E AG.” Voigt founded the solar company Solon in 1996 and is considered a pioneer in renewable energy.
The planned HH2E project Thierbach near Borna in Sachsen, which is to include a further 100-MW electrolyzer on the site of the demolished lignite-fired power plant, is initially only indirectly affected as HH2E-Thierbach-GmbH is a wholly owned subsidiary of the Hamburg company founded in 2021, but remains solvent itself. As part of this Net Zero LEJ project, Leipzig/Halle Airport is to be supplied with green fuel together with DHL.
Götz Ahmelmann, Director of Leipzig/Halle Airport, explained: “As a company, we are convinced of the environmental and economic importance of the industrial production of sustainable aviation fuel (SAF).” In his opinion, however, the conditions for the production of sustainable aviation fuels on an industrial scale “remain excellent.” “With strong partners and extensive areas, supported by an important customer such as DHL, which is committed to climate-neutral flying, we are ideally positioned.”
In insolvency proceedings instigated on the company’s own initiative, the company management can continue to run the business if there are justified hopes of being able to restructure the company. A trustee appointed by the court monitors the process. There is justified hope that the insolvency will enable the company to shed previous constraints and gain more room for maneuver through new collaborations.
by Lewitz | Jan 17, 2025 | Germany, Market, News
The German fuel cell manufacturer Proton Motor has announced the provisional end of its production activities at the end of 2024 if no new investor is found. Despite diligent efforts to save the Bavarian company, it announced in mid-September that the employees of the Puchheim branch would have their employment contracts terminated at the end of the planned period in order to ensure an orderly winding down of business activities.
Proton Motor is part of the British company Proton Motor Power Systems PLC, whose Board of Directors came to the conclusion in November 2024 that “the orderly shutting down of the company” was the “most appropriate course of action.” Although alternative sources of funding were still being sought to keep the company in operation in 2025, no viable solution had been identified by the end of November. Proton Motor Power Systems shares have lost around 85 percent of their value in the space of a year.
At the end of August 2024, the main investor announced that it would be withdrawing from the financing by the end of 2024. Although outstanding customer orders would be fulfilled as far as possible, new contracts could only be concluded once financing and the future direction of the company had been clarified.
In the summer of 2024, Manfred Limbrunner, the Director of Communications, who has since been made redundant, announced that his company was planning to move to Fürstenfeldbruck by mid-2025, where a factory was to be built in which up to 5,000 fuel cell systems and 30,000 stacks could be produced automatically every year.
by Hydrogeit | Jan 15, 2025 | Development, Germany, Market, News
Nordrhein-Westfalen is further expanding its capacities in the H2 research sector. In September 2024, the expanded HyTechLab4NRW in Duisburg went into operation. Since then, the site of the Center for Fuel Cell Technology has provided even better conditions for research into fuel cells and electrolyzers thanks to its improved infrastructure.
As part of extensive renovation work, the HyTechLab4NRW, which opened in 2019, was brought up to the latest state of the art and better equipped, particularly in terms of media supply, so that larger systems can now also be tested. ZBT Operations Manager Bernd Oberschachtsiek was visibly relieved: “Our temporary facility was the ugliest container in the world. Now we finally have a fully equipped laboratory that is not only technically up to date, but is also visually impressive.”
ZBT CEO Dr. Peter Beckhaus explained: “Today we are talking about fuel cell drives for ships, aircraft and trucks, with outputs ranging from 300 kW to the megawatt range. We have now created the right infrastructure to further research these applications.” Silke Krebs, State Secretary in the NRW Ministry of Economic Affairs, explained: “Hydrogen is a growth market and is of central importance for NRW in particular as an industrial location. We need new technologies and research to shape this future.” Prof. Astrid Westendorf, Vice-Rector for Research at the University of Duisburg-Essen, added: ”This is a real gain for our research infrastructure.”
The first ZBT Hydrogen Days on February 4 and 5 will provide an opportunity to view the improved facilities.
by Monika Roessiger | Jan 15, 2025 | Germany, Market, News
To strengthen its “role in the global hydrogen economy,” Enertrag, a developer and producer of renewable energies, opened its Hamburg office in fall 2024. At the new branch, Enertrag wants to contribute to the decarbonization of the logistics and shipping industry. And: “We want to supply not only the shipping industry, but also numerous other industries with green hydrogen,” announced CEO Gunar Hering in front of more than 80 invited guests at the official opening of the new premises. These occupy the top floor of the historic Laeiszhof, a magnificent, richly decorated clinker brick building in the center of the Hanseatic city.
As the center of wind energy in Germany, Hamburg will also be an important location for the hydrogen industry in the future. This is demonstrated by the construction work underway since last year for the 100-megawatt electrolyzer in Moorburg and for the Hanseatic city’s H2 industrial network (see H2-international, May 2024). The port therefore offers “ideal conditions to act as a hub for the import and export of hydrogen and its derivatives,” continued CEO Hering. In close cooperation with the shipping company F. Laeisz, the H2Global Foundation and other neighbors in the Laeiszhof, Enertrag wants to advance the infrastructure for the trade and use of green hydrogen.
Nikolaus Schües, CEO of the F. Laeisz Group, which operates its own ships for the transportation of ammonia, emphasized the importance of maritime logistics for the energy transition. The development of a sustainable and competitive energy supply can only succeed through cross-sector cooperation, he said, adding that “Shipping is an important link in this, not only as a transporter, but also as a user of hydrogen-based energy sources.” The traditional shipping company, which celebrated its 200th anniversary in spring 2024 and used to transport saltpeter, bananas and wheat, among other things, is focusing on green methanol and green ammonia for the future. And is planning to convert parts of its fleet to these energy sources.
CEO Gunar Hering with Finance Senator Andreas Dressel and ship owner Nikolaus W. Schües (from left)
Enertrag, in turn, takes care of the production and availability of hydrogen derivatives. The CEO of the company, which has more than 1,100 employees on four continents, refers to the many years of experience in the production of green hydrogen, for example at the Uckermark combined-cycle power plant, which Enertrag has been operating since 2011.
Hamburg’s Finance Senator Andreas Dressel was delighted by the arrival of the business in the city. In a greeting to the future neighbors, who reside just a short walk away from City Hall, he said: ”Our city offers good framework conditions and investment opportunities, especially in the area of large-scale hydrogen projects.” In this respect, he continued, Enertrag is an asset for Hamburg in terms of advancing the ramp-up of the hydrogen economy here and in Germany.
by Jörg Weber | Jan 13, 2025 | Germany, Market, News, Stock market
Share analysis by Jörg Weber, ECOreporter
The great excitement surrounding hydrogen seems to be over for the time being: Most H2 shares have been on a downward trend for some time. This seems paradoxical, as climate change is accelerating and time is running out to slow it down. This makes a consistent energy transition all the more necessary, and that includes the hydrogen sector. However, energy policy is currently running with the handbrake on when it comes to renewable energies. Meanwhile, the companies that earn their money with fossil fuels are securing their sinecures.
Hydrogen produced in an environmentally friendly way still has enormous potential when it comes to making industrial processes climate-neutral. Low-emission steel cooking is just as possible with it as the production of fertilizers or the decarbonization of transport. Although the latter applies less to cars, it applies all the more to the heavy goods transport sector, i.e. trucks, trains and ships. But there are problems everywhere. Even at steel producer Thyssenkrupp, which advertises: “We also only cook with hydrogen.” However, less and less steel is currently being produced in the Ruhr region, and Thyssenkrupp is facing a huge wave of redundancies. This will also slow down efforts to produce green steel using hydrogen.
It remains exciting
The political hydrogen targets are – still – ambitious, and the corresponding budgets are large: The German government wants to invest 9 billion euros with its National Hydrogen Strategy, and Germany is set to become number one in the world hydrogen industry. The EU and the USA are also planning to invest billions in green hydrogen. However, it is uncertain whether the plans will be realized, as changes of government and changes in the entire political landscape can lead to a U-turn. Donald Trump is planning huge tax breaks for companies, while Germany has been discussing its budget for months – both of which could lead to start-up funding for green hydrogen industries being cut.
The excitement surrounding the potential energy source of the future has cooled considerably in recent years. Growth stocks, which include H2 shares, have a hard time in turbulent times like these anyway because they find it more difficult to obtain loans – and at worse conditions. Professional investors in particular often look for established and supposedly safer stocks. Especially as the real H2 revolution is still a long time coming; demand remains weak and most companies are presenting fluctuating figures. As a result, some shares have lost more than 90 percent of their value since the great hydrogen buzz in 2021.
Investors often think they can only make one mistake with a technology that seems to be on the verge of a breakthrough: not jumping on the bandwagon. In the past, however, it has often been shown that selecting the right securities is particularly important when it comes to future technologies. It is impossible to reliably predict which companies will ultimately be among the winners in the hydrogen market. Shares in companies that are exclusively active in the hydrogen economy are often more of a bet than a strategic investment. An exception in the sector are companies that also focus on hydrogen, but not exclusively. There are established and profitable examples of this. Two of them are presented here first: Linde and Air Liquide.
Linde
Linde, the world’s largest industrial gases group, also did good business in 2024. On the stock market, the international group has mostly been on the up for years. In the third quarter of 2024, Linde increased its turnover by two percent year-on-year to USD 8.4 billion. Net profit remained stable at just under 1.6 billion dollars. A higher profit was prevented by the Group’s current cost-cutting measures, which, together with other extraordinary expenses, resulted in one-off costs in the last quarter. “As expected, the weak economic development continued in the third quarter, especially in the industrial end markets,” said Linde CEO Sanjiv Lamba. “We do not currently expect the economic environment to improve in the short term. However, we have taken measures to mitigate the economic headwinds.”
Linde has slightly lowered its forecast for the full year 2024: Earnings per share adjusted for special items are now expected to be between USD 15.40 and USD 15.50, eight to nine percent higher than in the previous year. Linde shares can still be considered an attractive investment. The Group has an excellent market position, is very well financed and generates robust profits even in downturns. However, the expected price/earnings ratio of 32 for 2024 remains high, and is only slightly more moderate at 28 for 2025. Investors who are currently planning to enter the market may need a lot of patience. Defensive investors should wait for a price setback before buying.
Linde is an ECOreporter favorite share and, according to its own information, the world’s largest hydrogen producer. Linde is continuously expanding this segment. The Group has initiated sustainable hydrogen projects on several continents. At the beginning of 2024, Linde announced a project in Eemshaven, the Netherlands, in cooperation with the Norwegian natural gas group Equinor. Linde will increase the quarterly dividend by nine percent to USD 1.39 (EUR 1.29) per share. This will be the 31st consecutive year of dividend increases.
Air Liquide
French Linde competitor Air Liquide is also involved in numerous green hydrogen projects, for example in its home country and in Shanghai, China. At the beginning of 2024, Air Liquide announced a joint venture with the oil company Total to build more than 100 hydrogen refueling stations in Europe over the next ten years. Around 20 stations in France, the Netherlands, Belgium, Luxembourg and Germany are to be put into operation as early as 2024.
The Air Liquide share price has performed well over the last five years. The share reached a high of almost EUR 180 in May 2024, falling to below EUR 160 by the end of November. The expected price/earnings ratio for 2024 is 27. Air Liquide is in a robust position, but ECOreporter considers Linde’s sustainability targets to be more ambitious. According to an assessment by the renowned and independent Science Based Targets initiative (SBTi), the sustainability targets of both Linde and Air Liquide are compatible with the goal of global warming of no more than 1.5 degrees.
Bloom Energy – Interesting despite risks
From October to the end of November 2024, the shares of the US company Bloom Energy shot up from under EUR 10 to over EUR 26. The reason: the company was able to secure the world’s largest order for solid oxide fuel cells to date. The energy supplier American Electric Power (AEP) has ordered up to 1 gigawatt (GW) of fuel cells. They are intended to supply data centers for artificial intelligence (AI) with electricity. According to Bloom Energy, the agreement comprises an initial order of 100 megawatts (MW), with further deliveries planned starting 2025. The fuel cells are to be installed directly at the customers’ sites and supply electricity with one third lower CO2 emissions compared to the current supply.
According to the company, Bloom Energy’s solid oxide fuel cells can run on 100 percent hydrogen or any mixture of hydrogen and natural gas. Connected together to form power plants, the technology can supply entire building complexes with electricity. Solid oxide fuel cells are therefore not necessarily a clean solution – they are only clean when they are fueled with green hydrogen. Bloom Energy itself emphasizes that the carbon footprint is already significantly better when operating with natural gas than with conventional fossil fuel power plants.
Analysts reacted enthusiastically to the news. Experts from the US investment bank Piper Sandler described the deal as “groundbreaking” for Bloom Energy. The contract could generate sales of up to USD 3 billion for the Group and at the same time open the door to further cooperation with other energy suppliers. Above all, however, the order proves that Bloom Energy is indeed capable of supplying large data centers with its technology.
Bloom Energy is one of the more interesting companies in the H2 sector. While companies such as Ballard Power, Plug Power and Nel have not yet been able to keep their full-bodied promises, are incurring ever greater losses and are often left out of major contracts, Bloom is growing and is apparently also being considered for large projects. This year, the Group wants to be in the black operationally. In 2025, a net profit is to be achieved for the first time.
However, cautious investors should wait and see how Bloom’s business develops and whether it will actually be in the black in the foreseeable future. The rise in Bloom Energy’s share price is probably also related to the fact that the order touches on the topic of artificial intelligence.
Bloom Energy has also been building hydrogen generators (electrolyzers) since 2022. The Group generated revenue of more than USD 1 billion for the first time in 2022 and USD 1.3 billion in 2023. Bloom could reach the profit zone for the first time in the 2024 financial year.
Enapter – Risky
Things are looking worse for the Hamburg-based hydrogen company Enapter: It expects less turnover for 2024 than initially hoped. Significant revenue is expected to be postponed until next year. However, Enapter is optimistic about its medium-term prospects. Enapter is small: Turnover for the current financial year is expected to be between EUR 22 and 24 million. The company had previously expected sales of EUR 34 million. The management’s forecast for earnings before interest, taxes, depreciation and amortization (EBITDA) remains unchanged at EUR 7 to 8 million. According to Enapter, the forecast is based on a current order backlog of around EUR 50 million. Due to delays in the production of 1‑MW electrolyzers and postponements of customer projects, Enapter expects that “significant parts of sales” will not be realized until 2025.
Fig. 2: The hall in Saerbeck stands, but was never occupied by Enapter (photo from Nov. 2022)
Enapter changed its strategy in 2024. Originally, the company wanted to set up mass production in Saerbeck near Münster in Nordrhein-Westfalen. However, the plans for the Enapter Campus research and production center were abandoned at the beginning of June 2024. In future, the Group will focus on the production of stacks – the core components of an electrolyzer. The complete electrolyzers with the Enapter brand name will now be built by Wolong in China as part of a joint venture.
Enapter also wants to offer its stacks to other customers. At the end of October 2024, the company received its first order from the Dutch energy group Adsensys, which wants to build electrolyzers with Enapter technology. Adsensys is also acquiring a software license from Enapter. According to Enapter CEO Dr Jürgen Laakmann, the successor to company founder Sebastian-Justus Schmidt, the company is “very confident that further core partnerships can be concluded in 2025 and that extensive major orders in Asia, Europe and the USA can be realized.”
The prospects for Enapter shares are difficult to assess. The share has always been a bet – but according to ECOreporter, it has become much less attractive since the campus project was canceled. Enapter admits that there is currently not enough demand to set up mass production for its electrolyzers. In addition, the company is still deep in the red. It is therefore not advisable to get aboard for the time being.
SFC Energy – Small and quite solid
Fuel cell manufacturer SFC Energy from Brunnthal near Munich has increased its sales and margins in the first three quarters of 2024. The company considers itself strategically very well positioned and is raising its earnings forecast slightly. From January to September, SFC Energy generated sales of EUR 105 million, an increase of around 20 percent compared to the previous year. According to the company, it benefited in particular from the strong demand for fuel cells for industrial applications and a significant expansion of the project business.
Business grew most strongly in Asia, where turnover increased by almost 70%. Earnings before interest and taxes (EBIT) climbed by 60% year-on-year to EUR 7.2 million. Net profit increased by almost 35% to EUR 8.7 million in the first three quarters. In the third quarter, however, profit fell by 27% to EUR 2.3 million.
SFC Energy has opened its largest factory to date in Romania and acquired businesses from Ballard Power, setting the stage for further growth.
Nevertheless, the poor earnings performance in the third quarter is cause for concern. Nevertheless, SFC Energy has successfully occupied a niche with its technology. The fuel cells are primarily used for stationary power supply – either when there is no access to the power grid or as a replacement for diesel emergency generators. SFC has achieved what many other hydrogen companies are far from: The company is making a profit.
The expected price/earnings ratio of the SFC Energy share remains high at 27 for 2024 and could be a moderate 18 in 2025 thanks to the prospect of further increases in profits. And that would be an astonishingly low value for a growth sector. Despite the business successes, however, the SFC Energy share has also suffered from the correction on the hydrogen market in the last three years, and the price has fluctuated strongly since 2021. The share is only an option for investors with a heightened risk awareness. It is not suitable for defensive investors.
Fig. 3: At the new headquarters of the international supplier of electrolysis technology Thyssenkrupp Nucera in Dortmund, 560 new jobs will be created
Thyssenkrupp Nucera on the decline
The Dortmund-based hydrogen company Thyssenkrupp Nucera is a giant compared to SFC Energy: In the third quarter of its 2023/2024 financial year alone (April to June), it generated sales of over a quarter of a billion euros – more than expected. However, earnings before interest and taxes (EBIT) fell from EUR 7 million in the previous year to just EUR 1 million. Overall, annual turnover is likely to be between 800 and 900 million euros. Alkaline water electrolysis (AWE) is expected to generate EUR 500 to 550 million of this. According to the Group, EBIT is expected to be “in the negative mid double-digit million euro range.”
The company is suffering from delays to new projects on the customer side. Since its IPO in July 2023, the share price has fallen significantly, with the average share price falling sharply. Nucera therefore remains a high-risk investment. Sustainable investors may also be concerned about the Group’s participation in the NEOM project in Saudi Arabia. This is a futuristic city that is being built in the desert in north-western Saudi Arabia and is often criticized internationally.
Conclusion
H2 shares remain speculative investments. The gas companies Linde and Air Liquide in particular, whose businesses are not dependent on hydrogen, offer reliable entry opportunities. Among the speculative stocks, Bloom Energy and SFC Energy are making significant progress – SFC is already in the black and Bloom Energy could achieve this in the current financial year. Nevertheless, the risks here remain high.
You should keep an eye on the shares of Thyssenkrupp Nucera and Enapter. However, these shares are currently still more of a bet than an investment. Former industry favorites such as Plug Power, Ballard Power and Nel have failed to live up to expectations, resulting in significant price falls. Here too, a bet seems less attractive at present.
Even very risk-averse investors should consider a hydrogen fund or ETF if they want to make a bet on hydrogen in order to at least diversify their investment somewhat. And the following applies to all H2 stocks except Linde and Air Liquide: Only invest money in the H2 market that you can fully afford to lose. The unexpected can happen at any time – and you have to be able to cope with losses if you invest here.
The author of this article is Jörg Weber, founder and editor-in-chief of ECOreporter.de. The internet publication has been reporting exclusively on sustainable investments for 25 years. ECOreporter is financed by subscriptions from readers and is therefore independent of advertising revenue and the like. ECOreporter tests sustainable funds, ETFs, banks, bonds, participation rights and others and analyzes sustainable shares. Specific advice and warnings show readers where they can invest their money wisely.
When investing in shares, every investor should always be aware of their own risk assessment and think about spreading the risk sensibly. This analysis does not constitute a recommendation to buy.
