18. November 2021 | 10:50 CET
Nel, ITM Power, dynaCERT: Hydrogen shares unstoppable
Since the beginning of October, hydrogen stocks have been celebrating a terrific comeback. The sector has clearly left behind the strong correction since February 2021. Even the climate conference without concrete results cannot stop the rally. Even the steel and industrial group Thyssenkrupp is reportedly toying with the idea of listing its hydrogen electrolyzer business on the stock market. Because one thing is clear: More and more countries are relying on hydrogen for a successful energy turnaround. In Europe alone, electrolysis capacities for "green hydrogen" are to be multiplied to 40 gigawatts by 2030. The US investment bank Jefferies is correspondingly optimistic about the potential of hydrogen companies. The market will continue to grow significantly. The analysts' favorite is ITM Power, but Nel is also recommended. The same could soon apply to dynaCERT.
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ISIN: NEL ASA NK-_20 | NO0010081235 , ITM POWER PLC LS-_05 | GB00B0130H42 , DYNACERT INC. | CA26780A1084
"[...] We are committed to stay as the number one Canadian and global leader in the Hydrogen-On-Demand diesel technology [...]" Jim Payne, CEO, dynaCERT Inc.
Will dynaCERT soon be playing in the concert of the big players?
With a market capitalization of around EUR 80 million, dynaCERT is still swimming under the radar of Jefferies and many investors. However, this could soon change because the Canadian company is winning orders and forging new partnerships. Among other things, Sofina Foods has ordered an additional 16 HydraGEN units from dynaCERT through its partner KarbonKleen Inc to use its patented technology to improve the efficiency of diesel engines and reduce their emissions. To officially measure the CO2 savings and document them for the responsible environmental authority, a suitable telematics software, HydraLytica, is supplied by dynaCERT.
Thus dynaCERT profits from the topic of CO2 reduction and certification. The report from Verra, an international institute for the management of greenhouse gas programs, fits in with this. According to this report, dynaCERT has overcome an important hurdle in the approval process with its technology. Monika Wojcik of Environmental Partners of the UK and advisor to dynaCERT on carbon credits, commented, "Approval of the new methodology could play an important role for the voluntary carbon market, which could grow from USD 300 million to more than USD 550 billion to meet the demand for carbon neutrality in the near future. In the transportation sector, which is not yet represented in the carbon market, the introduction of dynaCERT's HydraGEN Units is a milestone in carbon reduction, as monetization via certificates can soon be supported for customers." After initially nearly doubling to EUR 0.28 within a few days, dynaCERT shares have since consolidated back to EUR 0.20. However, if the positive news continues, the stock could move back towards its all-time high at EUR 0.80.
ITM Power: Jefferies' top pick in the hydrogen sector
The CO2 price is an important driver for the expansion of hydrogen capacities. There is still a long way to reach the targeted 40 gigawatts of electrolysis capacity for "green hydrogen" in Europe by 2030. According to a recent study, hydrogen should initially be reserved for applications in industry, long-distance flights and shipping. That is because direct electrification with electricity from renewable sources is not possible there. The recommendation is made by the experts of the federally funded Copernicus project Ariadne. They say that production capacities for "green hydrogen" would have to grow by about 70% per year between 2023 and 2030 to meet even 1% of final energy demand in the EU by 2030. Such growth would be extreme, and the demand for electrolysis plants is correspondingly high. ITM Power is benefiting from this. The British company is the top pick in Jefferies' hydrogen study.
Nel: Hydrogen shares with momentum again
Jefferies also recommends Nel. The Norwegian company is working flat out to further reduce the cost of producing "green hydrogen." It will also be necessary for hydrogen to become competitive and establish itself as an energy alternative. Nel aims to produce hydrogen at less than USD 1.50 per KG and thus be competitive with fossil fuels. The plant in Heroya, Norway, will be the first to achieve this goal. In the future, more than 500 megawatts are to be produced there in an automated process. In addition, expansion to 2 gigawatts is possible to exploit even greater economies of scale. Deliveries to customers Everfuel and Nikola are scheduled to start in the fourth quarter of the current year.
The production costs for hydrogen must come down. There is no doubt about that. At the same time, the price of CO2 must rise. Industry giants like Nel and ITM Power are benefiting from this, as is newcomer dynaCERT.