April 6th, 2022 | 10:19 CEST
Ballard Power, dynaCERT, Plug Power - Hydrogen more important than ever before
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"[...] Why should a modular electrolyzer cost more than a motorcycle? [...]" Sebastian-Justus Schmidt, CEO and Founder, Enapter AG
Capping, as soon as possible
Even before the invasion of Ukraine, dependence on Russian oil, gas and coal, and agricultural and other products was well known. Germany is dependent on strong partners for energy. The switch from fossil fuels to renewables such as wind, solar or hydrogen is already a done deal but is likely to take years, if not decades. Now, however, everything has to happen very quickly. Ever tougher sanctions against what was recently the most important exporting country for Germany are causing it to cry out for alternatives.
Hydrogen as a piece of the puzzle
Before the Ukraine conflict, politicians were betting big on hydrogen, especially the Greens. The National Hydrogen Strategy aims to establish climate-friendly hydrogen, especially from renewable energies, and its downstream products as key elements of the energy transition in order to complete decarbonization processes in specific areas. The German government made EUR 8 billion available for selected projects in mid-2021. Governments are also subsidizing promising hydrogen projects internationally. In Canada, the "December 2020" strategy sets out a vision of clean hydrogen meeting 30% of the country's energy needs by 2050.
The long wait for a breakthrough
In Canada, dynaCERT has been producing and marketing a technology for more than 15 years to significantly reduce CO2 emissions without incurring high conversion costs for fleet operators. With the patented electrolysis system "HydraGEN," it is possible to minimize the CO² emissions of large diesel engines by about 19% without loss of power by adding a small amount of hydrogen. This technology has already been used in more than 400 heavy vehicles for test runs. In addition, intelligent software has been developed by dynaCERT that documents and analyzes data such as emission savings and fuel consumption. Based on this data, certificates for the CO² saved can be generated, which can be converted into cash on the energy exchanges - as soon as the process is certified.
Full-year 2021 results were released earlier this week. In this regard, the past year continued to be significantly impacted by the global COVID-19 restrictions and the limitations of the Company's dealers to provide installation services. As a result, revenue for the full year was only CAD 757,002.
Total cash on hand at the end of the year was CAD 8.34 million. dynaCERT had cash outflows from operating cash flow of CAD 8.66 million due to a net loss of CAD 16.32 million impacted by non-cash adjustments of CAD 7.38 million. As a result of the disappointing numbers, the stock plummeted to CAD 0.155 but then stabilized in the CAD 0.16 range on high volume. The stock market value is currently EUR 45.93 million. There is no question that the patented technology is innovative, but market participants are waiting for the breakthrough and the move to commercialization. At the current level, an entry is highly speculative.
Recovery among the big players
From a technical perspective, the charts of the major hydrogen and fuel cell players continue to brighten. Plug Power was able to break out above the resistance at USD 29.78 and now has follow-up potential up to the USD 33.18 area. In the long term, as explained in a report, the industry leader is given great advance praise. After 24 years without a profit, investors should at least be warned if the visions issued do not materialize in full.
In the short term, the technical situation also looks positive for the Canadian counterpart, Ballard Power. With a sustainable breakout from the resistance area at USD 12.96, the way to the next resistance at USD 14.53 would be clear.
Due to the Ukraine conflict, the cries for alternatives to energy production that weaken the dependence on Russia are becoming louder. Hydrogen or fuel cells are the future. The shares of market leaders Ballard Power and Plug Power have trading potential. dynaCERT is stabilizing despite weak numbers and offers a highly speculative entry opportunity.
Conflict of interest
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