Hydrogen has been touted as an answer to grid challenges, but there are concerns about the feasibility and cost of scaling projects, which has weighed on hydrogen ETFs over the past year. Here is a collection of green hydrogen stocks to watch following a spate of positive updates.
- ITM Power’s turnaround strategy seems to be paying off as it more than halves its losses.
- Plug Power has shipped its first batch of liquid green hydrogen to customers including Amazon and Walmart.
- Ballard Power Systems has demonstrated how hydrogen can power Microsoft’s data centres.
The Turnaround Strategy Stock
ITM Power’s [ITMPF] half-year results released on 31 January show that its turnaround strategy seems to be working. Adjusted EBITDA loss more than halved year-over-year from £54.1m to £21m, while revenue more than quadrupled from £2m in H1 2023 to £8.9m. CEO Dennis Schulz said in a statement that the company has “successfully addressed the most pressing issues to right the ship”, although he added that “the electrolyser market is still immature”. Investors responded positively to the results, with the share price rising 27.6% in intraday trading.
The Manufacturing Partnership Stock
Ceres Power [CPWHF] announced last month that it had inked a deal with Delta Electronics [2308:TW]. The manufacturing agreement will see Delta utilise Ceres’ solid oxide fuel cell and solid oxide electrolysis cell technologies to produce clean energy. “Green hydrogen has a key role to play in delivering a more secure and sustainable future energy system, and today we take this first step towards what promises to be a strong collaboration with Delta to accelerate the industry globally,” said Ceres CEO Phil Caldwell in a press release.
The Hydrogen Shipment Stock
Plug Power [PLUG] has shipped its first batch of liquid green hydrogen to customers including Amazon [AMZN] and Walmart [WMT], an achievement described by CEO Andy Marsh as “a critical milestone for the green hydrogen economy”. The Plug Power share price surged 26% in the two sessions leading up to 1 February, the day the news was announced, but remains under pressure due to the stock’s high short interest, which stood at nearly 30% as of 18 January — short sellers have been betting against the company after it raised concerns about its liquidity in November. The Plug Power share price fell to its lowest level in four years the day after it announced it would be selling up to $1bn worth of its shares to B Riley Securities [RILY] on 17 January.
The Clean Propulsion Fuel Stock
AFC Energy [AFGYF] announced last month that it had received £676,500 in funding to design and trial ammonia cracking technology out at sea — an engine will run on a mix of hydrogen-rich cracked gas and ammonia. If successful, the technology could become the “preferred zero-carbon propulsion fuel” for maritime vessels, according to a regulatory release. “We believe the adoption of ammonia as a decarbonisation maritime fuel is yet another international market for our highly efficient ammonia cracker reactor,” commented CEO Adam Bond.
Ballard Power Systems
The Data Centre Power Stock
Ballard Power Systems [BLDP] and Caterpillar [CAT] have successfully demonstrated how hydrogen fuel cell technology can be used to power Microsoft [MSFT] data centres. The test is part of a three-year project between the parties announced in November 2021. Ballard’s Chief Commercial Officer David Mucciacciaro said in a statement last month that the demonstration is “an important proof point of the reliability and durability of Ballard's fuel cells in providing zero-emission backup power for data centres”.
Another Way to Invest in Hydrogen
The Global X Hydrogen ETF
The Global X Hydrogen ETF [HYDR] holds all five stocks as of 2 February. Industrials account for 79.3% of the portfolio, while consumer discretionary and materials have weightings of 15.9% and 4.8%, respectively. The fund is down 55.2% in the past year through 5 February and down 36.6% in the past six months.
The Invesco Global Clean Energy ETF [PBD] holds Ballard, Ceres, ITM and Plug. As of 2 February, industrials account for 47% of the portfolio, while utilities and information technology have been allocated 23.5% and 16.5%, respectively; consumer discretionary, materials, energy and financials have single-digit weightings. The fund is down 33.3% in the past year and down 25.4% in the past six months.