- Hydrogen sector remains in embryonic phase
- First projects beginning to get under way
- Firms still running up large losses
With crude oil and natural gas prices trending higher again investors got a small insight into the world of alternative energy with results from two ‘green’ hydrogen producers, ATOME Energy (ATOM:AIM) and Clean Power Hydrogen (CPH2:AIM).
Both firms recently joined the junior market and both are in the early stages of their development and continuing to invest to grow. That means operating losses and cash consumption, yet they provide an interesting read on the long-term potential for hydrogen.
ATOME, which listed on 30 December last year, posted a loss of $2.2 million for 2021 due to $0.7 million of listing expenses and $1.2 million in transactions relating to its founding shareholders.
The firm has two core projects, in Paraguay and Iceland, each of which will use 350MW of ‘green’ geothermal or hydro electricity to produce hydrogen and ammonia.
Both projects will supply their local end markets as well as being able to export hydrogen.
At the start of May, the firm signed another power purchase agreement for 60MW in Paraguay, meaning it could be generating its first sales by next year, ahead of expectations at the time of its listing.
‘Hydrogen is the worldwide future for heavy road transport like buses and trucks’, said chief executive Olivier Muscat.
‘With its first order for an electrolyser made in March, ATOME expects to sell and deliver its first hydrogen for transport use in Paraguay before the end of the first half next year with already extensive end-market interest in our mobility project together with government support’, he added.
The shares jumped as much as 4% to 128p in early trading.
ONE STEP AT A TIME
Clean Power Hydrogen, which came to the market in February, also posted a small loss for last year due to listing costs and incentive schemes but at the same time it also started to receive its first ‘significant’ orders.
The company makes electrolysers which bypass the need for a membrane and produce ‘green’ hydrogen and medical-grade oxygen.
The development of the hydrogen economy is forecast to lead to a 650-times increase in European demand for electrolysers by 2030, with an electrolysis capacity target equivalent to 40GW, according to the firm.
This will require investment of up to €47 billion towards electrolysers producing 10 million tonnes per year of renewable hydrogen.
Clean Power aims to become a globally-recognised and highly-profitable designer, manufacturer and licensor of its MFE technology and is targeting 4GW production capacity by 2030.
In March, it sold its first 1MW electrolyser to ATOME’s mobility division for use in Paraguay and agreed to explore the potential for a joint venture between the two to set up production of electrolysers ‘in country’ to serve the Latin American market using CPH2’s technology.
It also sold a second 1MW electrolyser to AFCryo, a New Zealand-based maker of cryostats and cryogenic cooling systems.
John Duffy explained to Shares that his aim is to get the company to a positive EBITDA (earnings before interest, taxes, depreciation and amortization) position before taking on major projects.
‘The number of potential projects is enormous and we could be buried in orders’, says Duffy.
‘We want to grow at a sensible, sustainable rate and cultivate customers who have a long runway of growth’, he adds.
Clean Power shares traded 3% lower at 43.1p following the announcement.