Plug Power, First Hydrogen, BP – Here are the opportunities of the new US energy policy

Plug Power - Between green vision and financial reality

Plug Power has positioned itself as a key player in the hydrogen sector, driven by innovative solutions such as PEM fuel cells and modular electrolysers. The latter recently saw a jump in revenue of 117%, supported by the demand for green hydrogen from solar and wind energy. With manufacturing facilities in five US states, the Company is targeting revenues of up to USD 950 million in 2025. In the long term, Plug Power is aiming for USD 3.75 billion by 2030 – an ambitious goal. The Company is also focusing on flexible pricing models: a newly introduced spot price system is designed to make markets more transparent and simplify sales channels.

Recent successes underscore the strategic direction: a 3 GW electrolyser order for an Australian ammonia plant and a USD 1.66 billion government loan guarantee strengthen the balance sheet. The cooperation with Allied Green Ammonia could enable the world's largest green ammonia production. At the same time, the Biden administration is securing funding for hydrogen projects – but the political turnaround under Trump poses risks. His energy agenda focuses on fossil fuels, which calls into question subsidies for green technologies. Plug Power must now prove that growth is possible without government aid.

Despite progress, the financial situation remains tight. Plug Power reported losses again in 2024, caused by high operating costs and inventory. The share price fell to below USD 2 – down 40% in the space of a year. Analysts such as Seaport Global are warning of a further downturn and recently downgraded the stock to "Sell". The dependency on external hydrogen supply is also critical: the Company's plant in Texas is not expected to double production until 2026. For investors, the investment remains a bet on the future: if scaling up is successful, Plug Power could benefit from the energy transition. The stock is currently trading at USD 1.62.

First Hydrogen – SMRs as game-changers

First Hydrogen plans to use small modular nuclear reactors (SMRs) to scale up the production of green hydrogen in Canada and the EU. The technology promises a cost-efficient energy supply that is not dependent on the weather – a decisive advantage over wind and solar power. SMRs require less space, are quickly operational, and can be placed close to decentralized hydrogen refueling stations to reduce transportation costs. CEO Balraj Mann emphasizes: "This is how we create the basis for a stable, emission-free value chain." The Company sees synergies here with global decarbonization targets, particularly in heavy-duty transportation and industry.

The EU and Canada are promoting hydrogen as a key element of the energy transition. The EU plans to produce 10 million tons of green hydrogen annually by 2030, while Canada is positioning itself as a pioneer with projects like the SMR site in Darlington. First Hydrogen benefits from this development: SMR-based plants could not only produce hydrogen, but also feed excess electricity into the grid – an additional benefit for local infrastructures. At the same time, tech giants like Microsoft are pushing for reliable energy sources for AI applications, making SMRs even more attractive. Analysts see a growth area here, with an annual market volume of up to USD 295 billion by 2043.

With low-cost hydrogen from SMRs, the Company could significantly simplify the positioning of its hydrogen-powered light commercial vehicles, which have a range of more than 630 km in tests by external fleet operators. First Hydrogen has planned a factory in Canada that can produce around 25,000 commercial vehicles per year, along with a 35 MW hydrogen plant. With a market capitalization of around CAD 27 million at the current share price of CAD 0.375, the Company has the potential for a revaluation because it is betting on two possible megatrends: hydrogen mobility and SMR energy.

BP - Between quarterly low and strategic realignment

BP reported a significant drop in profits in Q4 2024: Adjusted profits fell to USD 1.2 billion, down around 49% on the previous quarter. Revenue fell by 12.3% to USD 45.75 billion, driven by weak refining margins and seasonally lower sales. Nevertheless, the Company announced a share buyback of USD 1.75 billion – a positive sign for shareholders. The operating cash flow margin remained robust at USD 7.4 billion, though it was lower than the USD 9.4 billion of the previous year. The figures were announced the day after the hedge fund Elliott's entry was announced, which caused the stock to shoot up.

It remains to be seen to what extent Elliott wants to influence the Company's strategy. On February 26, BP will present a "fundamental realignment." CEO Murray Auchincloss announced that the capital allocation will be more focused on profitable oil and gas projects, such as in the Gulf of Mexico or Iraq, while investments in renewable energies will be scaled back. At the same time, the cost-cutting agenda is to be accelerated – structural savings of USD 750 million were already achieved in 2024. BP is aiming to generate a further USD 3 billion in revenue from the sale of shareholdings, including the Gelsenkirchen refinery.

For the current year, BP is forecasting a slight decline in production due to divestments in Egypt and Trinidad, as well as declines in natural reserves. In the refining sector, margins will likely remain low despite lower maintenance activities. The integration of bp bioenergy and TravelCenters of America could have a positive effect, assuming a partial recovery in the biofuel and logistics markets. Analysts criticize the cautious production forecast and higher than expected corporate costs. The stock is currently trading at EUR 5.49 in Xetra trading.

The new US energy policy offers both opportunities and risks for companies. Plug Power has to wait and see whether the loan guarantee from the US Department of Energy will be upheld. A turnaround will likely not be achieved with renewable energies alone. First Hydrogen has recognized the signs of the times and is planning for the future with small modular reactors to produce green hydrogen cost-effectively and thus promote hydrogen mobility. BP, on the other hand, is navigating between plunging profits and strategic realignment, with a focus on profitable oil and gas projects, while investments in renewable energies are being scaled back. It will be interesting to see what the hedge fund will do at BP.