AI's energy hunger and decarbonization: How Siemens Energy, CHAR Technologies, and Plug Power are positioning themselves to profit

Siemens Energy – How a corporation is shaping the energy transition

The energy transition is in full swing and represents a considerable investment cycle. One company that is centrally positioned in this process is Siemens Energy. Unlike many of its competitors, the corporation is not acting from a defensive stance, but is instead taking advantage of a clear market opportunity. Global electricity demand is rising structurally, driven by electrification, e-mobility, and the massive expansion of data centers. This is where Siemens Energy comes in with two strong pillars. On the one hand, with flexible gas-fired power plants, which are indispensable as a stabilizing bridge technology. On the other hand, with grid technology to integrate growing amounts of green electricity and replace dilapidated infrastructure.

The operational performance speaks for itself. The order books are full, ensuring long-term visibility. Demand for gas turbines is particularly robust, driven not least by the need for reliable power supplies for data centers. In the grid business, delivery times for large transformers have increased significantly, a clear sign of a tight market. This order backlog is beginning to be reflected in margins, which have risen noticeably in both core areas. The Group is now investing specifically in capacity expansions in order to meet the strong demand.

For investors, the strategy is clearly geared toward sustainable growth. Siemens Energy pragmatically supports decarbonization by enabling the direct phase-out of coal with efficient gas solutions, while at the same time creating the backbone for the transport of renewable energy with its grid technology. The planned capacity expansions are aimed precisely at these two levers. The growth is financially supported by strong cash flow, which also leaves room for capital returns to shareholders. The path from a restructuring case to a sought-after enabler of the energy transition seems to have been consistently pursued. The share is currently available for EUR 128.25.

CHAR Technologies – Cleantech company starts production

Things are getting concrete for investors in the cleantech sector. The focus is increasingly shifting from technological promises to operational implementation. One company that is now making this transition is CHAR Technologies. Its business model uses special high-temperature pyrolysis to convert hard-to-recycle wood residues into two marketable products: solid biocarbon for heavy industry and renewable gas or green hydrogen. The approach simultaneously addresses a waste disposal problem and generates revenue from industrial decarbonization. The decisive step is imminent.

The Company's first commercial plant in Thorold, Canada, is now entering the commissioning phase. Production of biochar with an annual capacity of 5,000 tons is scheduled to start there in January 2026. This milestone marks the long-awaited transition from project developer to operating company and will generate initial recurring revenues from the core business. Parallel to the start in Thorold, the Company is working on expanding its portfolio. A second, larger project at Lake Nipigon is being systematically advanced with the aim of starting the construction phase in 2026. Another interesting aspect is a second area of application for the core technology. A six-month demonstration project for the destruction of PFAS chemicals in sewage sludge in Baltimore was recently completed. The performance data is currently being evaluated and could open up a new, regulation-driven business area. Scaling is being carried out strategically through partnerships. The cooperation with the BMI Group, a specialist in industrial plants, has recently been expanded.

In addition to jointly financing the Thorold plant, the partners are now considering developing a clean energy initiative at the Espanola site. This model of risk and capital sharing enables faster growth without placing an excessive burden on the company's own balance sheet. For investors, the story now boils down to operational excellence. The technology has been developed, the first customers, such as steel companies, are on board, and political support in the form of subsidies is in place. The coming months will show how much profit the plants can generate. Exciting times lie ahead. The stock is currently trading at CAD 0.345, already breaking through its 2025 high for the year.

Plug Power – Consolidation is gaining momentum

Plug Power's financial history is showing the first signs of improvement. The Company significantly reduced its operating cash consumption in the last quarter, driven by stricter pricing and an internal efficiency program. Additional liquidity from a capital increase and upcoming proceeds from electricity rights are expected to give the Company a respite of around two years. This eases the acute liquidity crisis and changes the narrative from a permanent struggle for survival to an orderly consolidation course. For large customers, this stabilization is an important signal of confidence.

While the financial situation is stabilizing, the road to profitability remains rocky. One source of hope is the electrolyser business, which promises high contribution margins. However, its current scope is far from sufficient to offset the group's overall losses. Slight improvements are also evident in other segments, such as the traditional industrial truck business, but there is still a long way to go before the Company breaks even. Profitability depends on whether growth in the more profitable divisions can be achieved at the same time as significant efficiency gains in cost-intensive areas such as services and fuel production.

Despite the progress made, Plug Power remains a high-risk investment. Gross margins remain strongly negative, driven by inefficient hydrogen production and old, unfavorable service contracts. Although the current valuation is below previous highs, it still appears high for a company that continues to incur significant losses and consume capital. It already seems to price in further margin improvement and successful implementation of the strategy over the next 12-18 months. The share price is currently trading at around USD 2.37.

The surge in AI-driven power demand and decarbonization is opening long-term growth opportunities for fundamental solution providers. Siemens Energy, as an established industrial company with full order books for grid expansion and gas-fired power plants, is benefiting from stable demand. With the commissioning of its first commercial plant, CHAR Technologies is transitioning from project developer to operating cleantech producer. Plug Power, meanwhile, must now navigate the rocky path to profitability in the hydrogen economy despite short-term financial relief.