Nel ASA, dynaCERT, Plug Power - The future of sustainable energy is now!

Nel ASA - Record order intake

One of the most prominent European players, Nel ASA, could benefit from an intensification of the expansion of hydrogen production. The EU has launched a EUR 5.4 billion fund to support hydrogen projects, and as long as energy prices remain high, the situation for the hydrogen market will hardly deteriorate. On the other hand, the former CEO of Nel ASA sold about 75% of his shares last year. That does not exactly show confidence in the Company he led. However, he remains connected to the Company as a member of the supervisory board.

In Q3 2022, Nel ASA's revenue and EBITDA declined due to increased costs and a decline in the refueling segment. Higher start-up costs, more staff and logistics issues were expected to impact margins. The Company's order intake reached a new record of NOK 775 million. On December 20, a subsidiary announced an agreement with an unnamed US energy company to reserve capacity for 16 hydrogen refuelling stations in the United States. The agreement is valued at approximately USD 7 million, and the final order, estimated at around USD 17 million, is expected to be signed in the first half of 2023.

Also in the US, the Company has partnered with General Motors (GM) to further develop and industrialize Nel's PEM electrolyzer platform. This collaboration aims to combine GM's fuel cell expertise with Nel's electrolyzer experience to create more economical sources of green hydrogen. Nel will pay GM for its development work and intellectual property transfer and will pay a royalty upon successful commercialization. The stock is currently priced at NOK 14.28 and has traded between NOK 13.21 and NOK 14.57 since December 20.

dynaCERT - Sales pick up significantly

dynaCERT is a Canadian cleantech company focused on providing carbon emission reduction solutions for the international diesel engine market. Large diesel engines, such as those used in trucks, cause the majority of emissions in transportation. In order to produce fewer emissions, solutions are needed, which are available with dynaCERT's HydraGEN technology. This technology uses electrolysis to generate hydrogen/oxygen gases from distilled water to optimize combustion in the engine. With the Company's HydraLytica vehicle telematics device and software, users can access fuel economy and carbon emissions reduction reports.

Together with VERRA, dynaCERT is working on obtaining CO2 certificates for emission savings in the future. The process is in its final stages. Once CO2 certificates can be issued, fleet operators should be lining up. Following a near standstill in sales during the Corona period, sales figures are now growing. On December 19, the Company reported 137 confirmed orders for its 4 models, with 112 still to be delivered in 2022. In the third quarter, there were only 9 HydraGEN units sold. Now the pilot projects are paying off, due to which follow-up orders could be generated. In the meantime, vehicles from the mining sector, power generators and road trains equipped with diesel engines are also being fitted with the HydraGEN system.

CEO Jim Payne commented, "Our products are designed to improve fuel economy and engine performance while significantly reducing CO2 and greenhouse gas emissions. With these results, our patented HydraGEN and HydraLytica product lines demonstrate how our products can help companies meet their ESG goals while benefiting from our current application process for registration of future globally recognized emissions credits." More on the Company can be found at researchanalyst.com, or watch Jim Payne's presentation from the International Investment Forum on YouTube. The stock is currently trading for CAD 0.18. As a sign of strength, there has been no major selling during the tax-loss season.

Plug Power - Partnership with Nikola

The stock of Plug Power, the largest US hydrogen supplier with an almost complete value chain, took quite a beating in December. At the peak, the minus was over 28%. At the same time, Plug Power announced a collaboration with Nikola. Plug Power will supply a hydrogen liquefaction system with a capacity of 30 tons per day (TPD), expandable up to 150 TPD. In addition, Nikola will receive green hydrogen starting January 1, 2023, with volumes increasing to 125 TPD by the end of 2026.

The contract calls for 80% of the volume to be delivered under a take-or-pay agreement. Nikola plans to produce up to 300 tons of hydrogen per day by 2026 and build up to 60 hydrogen refueling stations. In return, Plug Power will purchase 75 Nikola Tre FCEVs over the next three years, with the first vehicles to be delivered in 2023. The trucks are expected to provide Plug Power's customers with hydrogen while reducing Scope 1 emissions by up to 50%. At first glance, this is a win-win situation for both parties.

Investors saw it differently and sent the stock on a downward slide. On December 28, the low for the year was marked at USD 11.49. Currently, one share costs USD 12.65. If the sales are based on the realization of losses in order to save taxes, there should be a rebound to at least USD 13.95. Starting January 4, the Company will present at the Goldman Energy Conf in Miami. Around February 7, Q4 numbers should be available. Here the Company has to deliver to win back disappointed investors.

Even though there is a lot of funding available for renewable energy, the development of hydrogen technology will take some time. Currently, neither Nel ASA nor Plug Power are making money. The same is true for dynaCERT, but their system is immediately economically viable. If the CO2 certificates come, the HydraGEN system could become a money-printing machine.