Nel ASA, First Hydrogen, Nikola - Fully on schedule

The catalyst for change

The move away from fossil fuels is inevitable, but nothing but hydrogen can replace them on a large scale. Combined with wind or solar power, the price of hydrogen is expected to drop by over 50% in the next 3 years, making it significantly cheaper than diesel. As the cleanest fuel source of the future, major oil and gas companies are also making the biggest transition the world has ever seen - away from petroleum products to carbon capture "blue hydrogen".

First Hydrogen, formerly Pure Extraction, changed its name to reflect the Company's business content better. And the name says it all. A team of executives with globally recognized experience, the Canadians launched with a vision to become the leading designer and manufacturer of zero-emission, long-range hydrogen-powered commercial vehicles in the UK, EU and North America.

The best of the best

The strategy behind it is simple to explain. At First Hydrogen, investors own the opportunity to invest in a clean hydrogen mobility system built from the ground up - without the typical OEM legacy of fossil fuels or previous EV investments. A design and integration strategy and the use of a proven chassis provide First Hydrogen with tremendous production and cost advantages. In addition, two market leaders hugely important to the process were brought on board back in June. Ballard Power, a global provider of innovative clean energy with a hydrogen fuel cell fleet, was tapped for the technology. A definitive agreement was reached for the design with AVL Powertrain UK, the world's largest independent automotive engineering, simulation and testing company.

Now First Hydrogen announced that the initial development of its light commercial vehicles for demonstration purposes for the UK market has been successfully completed. Further development and construction of two hydrogen-powered light commercial vehicles for demonstration purposes is to begin at AVL's facilities in the United Kingdom. Delivery is scheduled for the third quarter of 2022, according to First Hydrogen management.

These vehicles will enable First Hydrogen to demonstrate to potential customers the functional parameters of a zero-emission hydrogen transporter - such as combined range and payload, towing capability, and refueling speed - as well as detail customer requirements and secure custom design orders for the UK, European, and North American markets.

As a second pillar, First Hydrogen will also offer fuel cell-powered CO2 extraction systems to allow users to operate the systems in remote locations where no power grid is available, or power supply is unstable. This previously developed supercritical CO2 extraction system is fully operational and can be monitored and supported remotely through the Company's fully integrated software operating system. The Company, also traded in Frankfurt, currently has a market capitalization of only EUR 42.26 million. Compared to the competition from the USA, there is significant upside potential for First Hydrogen once the prototypes have been successfully built.

Back to normality

After the Norwegian hydrogen specialist Nel ASA shone with record figures last week, sales increased by 55% to EUR 23.63 million. Still, the loss in EBITDA increased from minus EUR 4.34 million to minus EUR 11.64 million due to start-up costs for the new plant in Heroya - calm is returning. After a brilliant 20% rally, the share price of the Norwegian Company shot up to the EUR 1.72 level. Here, however, was a striking resistance, which let the price sink back to EUR 1.59. The share would generate a buy signal if it sustainably broke above the EUR 1.73 mark. In contrast, breaking the EUR 1.50 mark would end the bottoming phase and retest the annual lows.

By 2025, Nel ASA has set a target that 1 kg of green hydrogen should cost USD 1.5. To achieve this, Nel wants to expand the electrolyzer capacity of its plants in Norway. Currently, the capacity is 40 MW per year, thanks to the Notodden plant. But when the large-scale project in Heroya is completed, the total will be 500 MW per year. In addition, there is said to be so much space at Heroya that Nel's electrolyzer capacity in Norway could be increased to 2 GW per year.

Nel ASA CEO Jon André Lokke's statement should have given investors new hope: "We are proud to have produced the first batch of electrodes in our new, fully automated production facility at Herøya in the third quarter, and we are ready to start producing the Nikola and Everfuel orders in the fourth quarter."

Hydrogen is the missing piece of the puzzle in the energy transition. While battery-powered vehicles are relied on for passenger cars, nothing can beat fuel cells for heavy-duty transport. First Hydrogen has made a breakthrough with its partners, and at Nel ASA, the start of the fully automated production plant in the next few months will show where the road leads.