Siemens Energy is on the right track, as the latest figures show. Although the wind subsidiary Gamesa, like before, is registering losses, all other divisions are doing well and are profitable – trend rising. That the stock market also sees it that way is shown by the share price being at times over 14 EUR. You must simply give the integration of Siemens Gamesa time. That won’t happen in weeks, but rather in one to two years. Starting 2026, this unit should be profitable again and by then enable a cost reduction potential of 400 million EUR.
At the same time, the market for offshore wind is growing enormously, and there will be more and more synergies, such as with electrolyzers for offshore hydrogen production, visible. Here, things will grow together that belong together, because renewable wind power should be converted into molecules on site, which are then transported by ship and pipeline to consumers. Whether the onshore wind division – and this is where the problems lie at Gamesa – can and should be maintained as an activity is questionable, if the technical problems cannot be solved sustainably.
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Siemens is divided into many divisions, all of which are growing at different rates and contribute to the success of the conglomerate. The division Gas Services reported a turnover of 10.9 billion EUR at an operating profit of 1.033 billion EUR. The division Grid Technologies has made 7.2 billion EUR turnover at 0.54 billion EUR profit, and Transformation of Industry had 4.4 billion EUR turnover at 0.228 billion EUR profit. Let me make a simple thought experiment here:
What would happen if Siemens Energy would take one of these divisions public as a spin-off (as a company share), like what parent company Siemens did with Siemens Energy? Could perhaps 30 to 40 percent of Gas Services proportionately be worth 2, 3 or 4 billion EUR on the stock market and Siemens Energy allow this equivalent value via an initial public offering (IPO) as an inflow of capital? With this capital, Siemens Energy could then finance strategic acquisitions from its own resources. New business models could be developed in order to bring together the offshore wind division of Siemens Gamesa with the electrolyzer division, with the aim of producing offshore hydrogen. Wouldn’t it even be interesting, to enter into hydrogen production itself with partners and customers and to bring in hardware from Siemens Energy to projects as assets or contributions in kind? All this would open up new and sustainable sales areas for Siemens Energy, is my purely theoretical consideration.
New on the supervisory board: Prof. Veronika Grimm
The appointment of Prof. Veronika Grimm to the supervisory board of Siemens Energy – criticism came from the ranks of the economic experts due to possible conflicts of interest – I think it is expedient, because this is where expertise from the theoretical field flows into the practical work of a company. Grimm with her expertise in the energy sector has a special position in the council of wise men, because she thinks pragmatically and is open to technology, and also esteems hydrogen with the importance that the supermolecule has. From this Siemens Energy can profit. On topics that directly affect Siemens Energy she will not issue an opinion. In advisory bodies like the economic council sit theorists.
Record order intake
The power plant strategy finally adopted by the German government (see p. 26) leaves rooms for a lot of imagination for Siemens Energy, because many a major order for gas turbines could and should land here, as there are only few capable providers like Siemens Energy anyway. It is a good sign that the first quarter of fiscal year 2024 was able to be concluded with a profit before special effects of 208 million EUR. The impressive 24 percent increase in order intake to 15.4 billion EUR in the quarter catapulted this to a record level of over 118 billion EUR and, if it continues like this, is also expected to reach 140 to 150 billion EUR on an annualized basis (estimate).
Summary: Buy and leave alone. As a full-service provider, the conglomerate is in the right and, above all, high-growth markets of energy production, especially in the area of hydrogen, perfectly positioned.
Disclaimer
Each investor must always be aware of their own risk when investing in shares and should consider a sensible risk diversification. The FC companies and shares mentioned here are small and mid cap, i.e. they are not standard stocks and their volatility is also much higher. This report is not meant to be viewed as purchase recommendations, and the author holds no liability for your actions. All information is based on publicly available sources and, as far as assessment is concerned, represents exclusively the personal opinion of the author, who focuses on medium- and long-term valuation and not on short-term profit. The author may be in possession of the shares presented here.
AI and hydrogen are the focus of this year’s Hannover Messe. H2‑international’s trade fair preview is showing what’s new to see at the Hannover Messe and especially Hydrogen + Fuel Cells Europe.
The transformation of industry towards climate neutrality is gaining more and more momentum. Which is why the decarbonization of industry is also at the center of interest at this year’s Hannover Messe. The energy industry has a crucial role to play in this. The transformation is based on two drivers: artificial intelligence (AI) and hydrogen. Because it is clear that a climate-neutral industry without a hydrogen economy is inconceivable.
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Over 500 exhibitors on the topic of hydrogen will be represented at Hannover Messe 2024. Most of them in the context of the Hydrogen + Fuel Cells Europe fair in Hall 13. Also this year’s partner country, Norway, with its motto “Pioneering the Green Industrial Transition,” is putting carbon-neutral production and new digital solutions in focus at its hydrogen pavilion (Stand D30). Likewise under the banner of the hydrogen economy is the Norwegian-German energy conference “Renewable Dialogue – North Sea Energy Hub,” which will take place in the Convention Center April 23, 2024. This conference particularly aims to concretize business models of the H2 economy. Hydrogen is also a central component of the All Electric Society Arena. This arena is directly connected to the ZVEI stand in the middle of Hall 11, Stand B58.
What products, services and business models the hydrogen economy already offers today will be shown by exhibitors of Hydrogen + Fuel Cells Europe. Important players and innovations H2‑international is introducing in this trade fair preview.
Fuel cell technology
Proton Motor Fuel Cell GmbH is presenting at the Hydrogen + Fuel Cells Europe its fuel cell system HyModule S4. It is conceived for stationary applications in residential buildings and small industrial complexes and as an emergency or off-grid power supply. The device offers a lower power range of 4.1 kWel and an output voltage range of 28 to 55 VDC. The H2 supply pressure is 1.5 to 7 bar. The HyModule S4 uses the liquid-cooled FC technology HyStack 200 from Proton Motor and can be used in an ambient temperature of 5 to 40 °C.
Fig. 2: The FC system HyModule S4 for stationary applications, Source: Proton Motor, Proton Motor, Halle 13, Stand E34
The automotive group Honda is coming to Hannover with the prototype of its new fuel cell module. The module is designed for H2 cars, commercial vehicles, construction machinery and stationary power generators. The fuel cell in compact dimensions has a high output power and a fast start-up time, even in environments with low temperatures. For use in heavy-duty commercial vehicles, Honda has already begun, together with Isuzu Motors, to test the fuel cell drive of the next generation. A prototype is already out on public roads. The launch of a series model is planned for 2027.
Fig. 3: The FC module FCS-26 from Honda is also suitable as a clean and quiet emergency power source, Source: Honda Honda, Halle 13, Stand C56
SFC Energy, manufacturer of hydrogen and methanol fuel cells, has expanded the performance class of its mobile solution Efoy H2Genset. The mobile solution is intended as an alternative to conventional diesel generators. It can be used for a multitude of applications, e.g. on construction sites, at events, at festivals and in remote locations with temporary power requirements.
Fig. 4: Mobile fuel cell device for use on construction sites or at festivals, Source: SFC Energy, SFC Energy, Halle 13, Stand C04
Ballard Power Systems does not have its own presence at this year’s Hannover Messe. However, the company is part of a Canadian delegation participating in a joint presentation of over 300 exhibitors from 25 countries in the field of hydrogen and fuel cell technology. Currently, there are nearly 4,000 trucks and buses worldwide driven with fuel cells from Ballard (see also p. 61). The fuel cells are also used in several hydrogen ships, trains and hydrogen projects with global partners. At the Hannover Messe, Ballard will be temporarily represented in the Canadian pavilion by an expert in fuel cell technology.
Ballard Power, Halle 13, Stand D40
Hydrogen supply
AEG Power Solutions equips hydrogen plants with direct current supply systems. The company’s electrolyzer power supply is designed to provide stable current and power over a wide voltage range. It is suitable for the production of green hydrogen with fluctuating renewable energy sources, as these electrolyzer converters offer high DC dynamics and high efficiency in terms of grid conformity, even in partial load operation. To reduce space requirements, installation time and costs, AEG Power Solutions offers scalable plug & play solutions. These solutions can comprise up to eight DC-3 modules in parallel, which deliver up to 16 MW, 1,500 VDC and 25.6 kADC.
Fig. 5: The plug & play electrolyzer power supply comprises up to eight DC-3 modules, Source: AEG Power Solutions AEG Power Solutions, Halle 13, Stand B45
The company Siqens has developed an electrochemical hydrogen separation technology (EHS). In contrast to the electrolysis of water, the company wants to use it to produce hydrogen from biogas, methanol or methane. According to the manufacturer, the EHS process also allows the separation of hydrogen from natural deposits. Another application is the separation of hydrogen that will be transported via the natural gas grid.
Fig. 6: The EcoCabinet from Siqens, Source: Siqens, Siqens, Halle 2, Stand A42
Fuel cell and electrolyzer components
The new humidifier HumidiPower from Pentair is designed for PEM fuel cells. It acts as a heat and moisture exchanger. According to the manufacturer, the device has a patented, spiral-wound hollow fiber design, to ensure efficient moisture transfer to air and other gases. A low pressure drop should minimize energy consumption. The moisture removed from the exhaust gas of the fuel cell is reused in the purge gas.
Fig. 7: The HumidiPower ensures sufficient moisture in the PEM fuel cell, Source: Pentair, Pentair, Halle 13, Stand F46
Parker Hannifin is showcasing the latest developments in the field of fuel cell technology at its stand. At an interactive table, visitors can take a look inside an electrolyzer receptacle and search for Parker components in it. New is the horizontal gas filter Peach Gemini PuraSep. The filter contains two stages and two drums each. The upper drum is used to separate solids and liquids, while the lower drum collects the liquid. Some of the solids flow into the lower drum below the first stage, but most of the solids collect on the elements and on the bottom of the upper barrel of the first stage. Likewise new is a humidifier for FC vehicles and the H70-08-HRS hoses for H2 applications.
Fig. 8: At an interactive table, visitors can take a look inside an electrolyzer receptacle and search for Parker components in it Source: Parker Hannifin, Parker Hannifin, Halle 13, Stand C55
Fischer Fuel Cell Compressor from Switzerland manufactures air compressors for fuel cell systems. Their special storage technology should then enable high performance and efficiency even when the fuel cell system is operating at high altitudes. Therefore, in addition to the classic FC applications in vehicles, trains, ships or stationary units, the compressors also have a place in aviation. The devices are not only in test mode, but are also in flight operation for several hours at a time. The company has also expanded its annual production capacity to 5,000 units.
Fig. 9: Compressors from Fischer are also suitable for aviation, Source: Fischer Fuel Cell Compressor Fischer Fuel Cell Compressor, Halle 13, Stand E46
Also the Danish specialist for FC compressors Rotrex is presenting a new air compressor. The EK40CT-2429 has an additional turbine/expander unit. This new compressor should be suitable for stationary, maritime and aerial applications with large fuel cell stacks with up to 400‑kW output power.
Fig. 10: The new fuel cell compressor from Rotrex, Source: Rotrex, Rotrex, Halle 13, Stand C15
The Swiss company Celeroton Fuel Cell is developing and producing ultrahigh-speed turbo compressors and drive systems for fuel cell applications. All FC compressors from Celeroton are equipped with their own developed gas bearings that should enable high efficiency, oil-free operation and a long service life. With the CTi-1100, the company presents the second generation of the turbo compressor with integrated inverter for intralogistics, range extenders, stationary systems and drones. Likewise new is the CTi-2001 with integrated 80‑V inverter, conceived for intralogistics and off-road applications.
In addition, Celeroton Fuel Cell is expanding its product palette for applications with high power ranges. The new turbo compressor CTE-4000 in conjunction with the inverter CC-4000 should provide the air supply for fuel cells with a net output of 100 to 200 kW. The new system will be equipped with an optional turbine expander and several aerodynamic variants.
Fig. 11: Turbo compressor with 100 to 200 kW net output, Source: Celeroton Fuel Cell, Celeroton, Halle 13, Stand D49
PDC Machines from the USA produces membrane compression systems and hydrogen compressors. Via the new online portal MyPDCMachines.com, customers can manage a digital operation twin of their installed PDC system. The portal offers access to important information, like the device status, recommended maintenance schedules, operation reports, service history, handbooks and data sheets. In addition, it enables the ordering of replacement parts. New is also a “PDC Toolbox,” which should help customers in the service or maintenance of PDC compressors.
Fig. 12: Access by QR code to the online portal MyPDCMachines, Source: PDC Machines, PDC Machines, Halle 13, Stand E50/2
The gas analysis specialist Archigas from Rüsselsheim is presenting a novel measuring technology for humidity-independent H2 detection. For it, the company, in cooperation with the university Hochschule Rhein-Main, newly implemented the thermal conductivity measurement principle and combined it with semiconductor technology. With under 30 milliseconds, the new sensor from Archigas should exhibit an especially high reaction speed. If condensation comes in contact with the sensors for gas analysis, this usually leads to their immediate destruction. As a consequence, water can appear in the various places of the H2 process chain, security gaps can result and high costs can accrue. The special construction of the measuring module should therefore effectively combat a contact of condensate with the sensory units.
Fig. 13: As hydrogen is highly reactive, a detection over the whole process chain should be followed in real time Source: Archigas, Archigas, Halle 13, Stand C16
Hydrogen refueling pumps
This year, Maximator Hydrogen is introducing its newest generation of hydrogen refueling pumps. The Max Dispenser 1.5 has a multimedia display with touch function, microphone, loudspeaker and NFC reader for direct payment. This enables users to receive precise refueling instructions and see the filling status of their vehicle. At the same time, the display serves as an interface to 24/7 support, which is always available to answer users’ questions.
Thanks to the built-in tilt detection, the dispenser is set to a safe state in dangerous situations, like for example impact with a vehicle. The H2 inflow is stopped, the relief valve is opened and the dispenser is de-energized. The dispenser can fill cars and heavy-duty vehicles with 700 bar or 350 bar.
Fig. 14: Thanks to the built-in tilt detection, the dispenser is set to a safe state in hazardous situations Source: Maximator Hydrogen, Maximator Hydrogen, Halle 13, Stand C26
Also Linde is introducing a new hydrogen refueling pump at the Hydrogen + Fuel Cells Europe. The HyQ-Dispenser should offer high performance in H2 refueling. It is also said to be energy-efficient, very quiet and optimized for maintenance work.
Fig. 15: Card payment at the new Linde hydrogen refueling pump, Source: Linde, Linde, Halle 13, Stand D55/1
Components for hydrogen refueling pumps
Norgren under its brand Buschjost now offers H2 high-pressure solenoid valves with FM-approved coils for the North American market. The company can now serve customers who are building hydrogen refueling stations or hydrogen storage facilities for Korea, China, Europe or the USA. The valves are designed for a pressure of up to 1,050 bar.
New are also oxygen solenoid valves and regulators that the company has developed specifically in accordance with industrial gas standards for electrolysis applications. In addition, the company offers electric high-pressure proportional regulators for hydrogen refueling pumps.
Fig. 16: High-pressure solenoid valve with FM-approved coils for the North American market Source: Norgren, Norgren, Halle 13, Stand E13
Also Eugen Seitz from Switzerland is coming to Hannover with a new solenoid high-pressure valve for hydrogen applications. The valve has an integrated position indicator, which should ensure optimum system status information.
Fig. 17: The new H2 solenoid high-pressure valve with position indicator, Source: SeitzValve, Eugen Seitz, Halle 13, Stand D50
Bürkert is putting in focus with its trade fair appearance the new coil technology “Kick and Drop.” This technology is said to achieve energy savings of up to 80 percent in valves, 45 K less self-heating and 200 percent more switching pressure compared to conventional coils. The Kick-and-Drop coil is equipped with a double winding of an inrush and holding winding. In Kick-and-Drop electronics, the coil is excited by a high electric impulse. This generates the required inrush power that the valve needs to open. After around 500 milliseconds, the Kick-and-Drop electronics switch to an energy-saving holding mode. With this, the power consumption is drastically reduced.
Fig. 18: Kick-and-Drop coil from Bürkert, Source: Bürkert, Bürkert, Halle 13, Stand C30
Research
The German aerospace center for technical thermodynamics (DLR-Institut für Technische Thermodynamik) will be represented at the Hydrogen + Fuel Cells Europe with its departments for energy system integration and electrochemical energy technology. The institute develops electrochemical reactors based on proton ceramics. Proton ceramic fuel cells are operated at temperatures between 400 and 600 °C. The electrode configuration separates the vapor supply from the hydrogen production and thus prevents a dilution of the two streams. These novel cells are versatile: They can supply electrochemically compressed hydrogen, they can enable the protonation of molecules such as CO or CO2 into valuable raw materials, and they can additionally be used as conventional fuel cells for energy supply.
In the PtX-Wind partial project of H2Mare, the DLR is researching the offshore production of green hydrogen and power-to-X products. At the trade fair, the research institute is also introducing the transportable platform XPlore. This serves to investigate various electrolysis technologies in combination with different synthesis technologies.
Fig. 19: The transportable platform XPlore serves for offshore tests, Source: DLR (based on CAD from TUB-EBMS) DLR, Halle 13, Stand B36
The ZBT in Duisburg (Zentrum für BrennstoffzellenTechnik) is putting its focus on electrolysis and hydrogen derivatives at this year’s trade fair. The research institute is showing a model of an ammonia cracking reactor that was produced using 3D metal printing. A to-scale model of the associated cracker system for mobile applications will also be on display. The system was designed for a sailing yacht and now installed as part of a complete ammonia ship propulsion system in the sports yacht Ammonia Sherpa.
Fig. 20: Ammonia cracker system for use on a sailing yacht, Source: ZBT
The electrolysis division of the ZBT is presenting new precious metal-free membrane electrode units and introducing methods for the quality control of PEM electrolyzers. In the field of material qualification, the ZBT is demonstrating methods for the characterization and detection of damage phenomena on fuel cell components such as membrane electrode units or coatings on bipolar plates. ZBT, Halle 13, Stand E40
Fraunhofer ISE is presenting a laboratory AEM electrolysis cell in Hannover. This is a further development of the PEM electrolysis cell design and will be used for the precise characterization and qualification of various components such as membranes, porous transport layers and catalysts. This happens at pressures of up to around 10 bar, increased current densities of over 5 A/cm² and under precise temperature control by an integrated heater. The institute also offers customers measurement services for PEM and AEM electrolyzers and an analysis of the measurement results, to identify opportunities to improve customer products.
A new design of membrane electrode assemblies (MEAs) for electrolysis and mobile fuel cells, manufactured using screen printing or slot die processes with commercially available materials, is also part of the trade fair presentation.
Fig. 21: New design of the MEA for electrolysis and mobile fuel cells, Source: Fraunhofer ISE Fraunhofer ISE, Halle 13, Stand C41
At this year’s Hannover Messe, Fraunhofer IMM is introducing, at the Fraunhofer joint stand (Fraunhofer-Gemeinschafsstand), a compact system for ammonia splitting. This can be used for the decentralized supply of hydrogen, for example for hydrogen refueling stations. In maritime applications, such a system can supply fuel cells with hydrogen or supply ignitable “split gas” for ship engines.
The theme at the special exhibition area (Sonderausstellungsfläche) of the Hydrogen + Fuel Cells Europe is power-to-gas processes such as methanation in compact, microstructured reactors. In addition, Fraunhofer IMM is introducing reformer systems with which hydrogen carriers, like methanol, ethanol and synthetic hydrocarbons, can be used for hydrogen-based stationary and mobile energy supply. For these reformer systems, the institute is developing catalysts and catalytic coatings for microstructures.
Fig. 22: The ammonia and methanol-based systems for stationary and decentralized energy supply can be seen in Hall 2, Stand B24 Source: Fraunhofer IMM, Fraunhofer-Gemeinschafsstand, Halle 2, Stand B24, Fraunhofer IMM, Halle 13, Stand C47/1, Sonderausstellungsfläche
Machine building
The special machine manufacturer Graebener Maschinentechnik is presenting a press for the production of alkaline electrolyzer stacks. The pre-assembled stack consisting of bipolar plates is first inserted into the machine. There, it is compressed to a defined height until a certain pressure is reached within the stack. This pressure must then be maintained unchanged for several hours. During this time, the stack can be subjected to all the necessary technical tests with the help of other procedures.
The stack press for electrolyzers has a force of 800 metric tons and can accommodate stacks with a maximum height of around 3 m, a maximum diameter of 1.60 m and a weight of up to 12 tonnes. In order to be able to guarantee assembly work with maximum safety during operation, a hydraulic drive was deliberately dispensed with. Instead, the stack is compressed inside the press using six servomotor-driven spindle units. These are operated in synchronization mode and should therefore enable particularly homogeneous compression of the stack.
Fig. 23: The new stack press for electrolyzers, Source: Graebener Maschinentechnik, Graebener Maschinentechnik, Halle 13, Stand E42
The laser welding specialist AWL-Techniek Holding from the Netherlands develops laser welding equipment and complete production lines for bipolar plates. According to the manufacturer, the new laser micro-welding cell can achieve a focus of 0.052 mm and therefore weld at high speed. This enables the sophisticated welding of the wafer-thin bipolar plates.
Fig. 24: In the Experience Center, AWL has set up a test facility that also enables automated quality control of the bipolar plates Source: AWL, AWL-Techniek, Halle 13, Stand F49
The Belgian company Borit specializes in forming, cutting, welding and sealing technologies required for the production of metal bipolar plates for fuel cells and interconnects for electrolyzers. The trend with bipolar plates, according to Borit, is ever thinner materials on the order of 50 to 100 micrometers, in order to save weight. Borit develops the right technologies for such materials.
Fig. 25: Bipolar plates from Borit, Source: Borit, Borit, Halle 13, Stand C19
Maceas, a 100-percent subsidiary of Worthmann Maschinenbau, focuses on helium leak testing in vacuum and under atmosphere as well as ultrasound gas bubble detection in water bath. The company is active in the areas of hydrogen, electrolysis, fuel cells and battery components as well as heat storage technology. In Hannover, the company is showing a new fully automated helium vacuum tightness testing system for metallic and graphitic bipolar plates.
Fig. 26: New system from Maceas for leak testing of bipolar plates, Source: Maceas GmbH, Maceas, Halle 13, Stand E53/1
Catalysts and membranes
Pajarito Powder has built a new production facility for catalysts in fuel cell and electrolyzer stacks at its headquarters in Albuquerque, New Mexico, USA. The company uses platinum-group metals in its catalysts to achieve high performance and good stability and durability. With the new production facility, Pajarito Powder has tripled the production volume for FC catalyst material and doubled its in-house production of catalysts for the generation of green hydrogen.
Fig. 27: New production plant for significantly higher capacity, Source: Pajarito Powder, Pajarito Powder, Halle 13, Stand A40
The Chinese manufacturer Anhui Contango New Energy Technology is showing in Hannover a large-format catalyst-coated membrane (CCM) on various PEM variants. The CCM should have a high current density and a low iridium and platinum content. Contango supplied around 20 MW of CCMs to large Chinese water electrolyzers last year. According to the provider, the product is also interesting for European customers.
Anhui Contango New Energy Technology, Halle 13, Stand A21
Carbon Energy Technology from China produces composite membranes. The company’s new product consists of an organic polymer, ceramic powder and a carrier material. The membranes are available in thicknesses of 200 and 500 µm. They are used for the alkaline electrolysis of water, as they can efficiently separate hydrogen and oxygen and allow the electrolyte to pass through.
Carbon Energy, Halle 13, Stand A42
System integrators, operators and consultants
H2Apex with headquarters in Rostock/Laage is based on three pillars: The company is active as a system integrator for turnkey hydrogen projects and mobility solutions. In addition, the company produces green hydrogen. The third pillar is the development and production of compressed gas storage systems for the temporary storage of hydrogen.
Fig. 28: Container with H2 compressed gas storage tanks, Source: H2Apex, H2Apex, Halle 13, Stand E49
The hydrogen core grid should be in operation by 2032. For this, natural gas pipelines are to be converted to hydrogen and new hydrogen pipelines are also to appear. German natural gas grid operator Ontras is contributing its starting grid H2-Startnetz to the project. Among other things, it consists of the two IPCEI projects “Green Octopus Mitteldeutschland” and “Doing hydrogen.” With it, Ontras wants to lay the foundation for efficient and safe hydrogen transport in its grid area. The eastern German company is connecting via its infrastructure the whole German with the European network – the European Hydrogen Backbone. Via this, hydrogen produced in Scandinavia is to make its way to Germany.
Fig. 29: The Ontras H2-Startnetz consists of the projects “Green Octopus Mitteldeutschland” and “Doing hydrogen” Source: Ontras, Ontras, Halle 13, Stand D10
Siemens has expertise in the entire H2 value chain. The company makes this expertise available to OEM manufacturers, general contractors and plant operators as well as governments and municipalities in the implementation of hydrogen projects. This starts with financing and continues with the concept design and construction through to the operation of hydrogen generation plants and PtX projects. Siemens sees its strengths in the areas of digitalization, automation and electrification.
Siemens, Halle 13, Stand C36
The consulting firm PGUB Management Consultants is being represented in Hannover at the joint stand Hzwo-Gemeinschaftsstand Sachsen. PGUB advises the Swedish fuel cell manufacturer FCT Sweden. Under the name Protonik GmbH, starting April, an independent hydrogen consulting company is to be active. This is likewise to be found at the Gemeinschaftsstand Sachsen and also at the stand for the energy agency of the state of Hessen (hessische Landesenergieagentur, LEA).
A good 450 participants gathered at the specialist conference H2 Forum in Berlin February 19 and 20 to discuss innovative H2 technologies, strategies for the market ramp-up and the necessary regulatory framework conditions. A further 1,000 participants were connected online, even despite the considerable time difference in countries such as India and the USA.
The event was opened via a video by Kadri Simson, EU Commissioner for Energy. The two-day program was held under the motto “Empowering the future of hydrogen,” where this year’s focus was on the production of the green gas by electrolysis and its transport in Germany and Europe. At the H2 Forum were, among others, representatives from E.on, Enapter, EWE, Linde, FNB Gas and the H2Global Foundation. They discussed the role of hydrogen in the defossilization of the economic systems. Philipp Steinberg of the German economy ministry outlined the various phases of the development of the hydrogen core grid in Germany.
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Feelings of optimism and assurance were tangible throughout the high-ceilinged rooms of the Estrel Congress Center (ECC) as players from politics, industry and the energy sector talked about ambitious H2 projects at home and abroad. Inspiring as well was the approval by the EU Commission a few days before of a series of IPCEI projects, thus ending for some participating companies years of waiting. Additionally, the carbon contracts for difference and the auctions of the European Hydrogen Bank are giving hope to business representatives.
Spain: Megawatt-electrolysis in practice
For example, Özlem Tosun, project manager for green hydrogen at Iberdrola Deutschland, reported on the experience with a 20‑MW electrolysis plant, making it currently the largest in Europe. “I hope it doesn’t stay that way,” she added, in view of the necessary market ramp-up for green hydrogen. The Spanish energy corporation, known in the country primarily as an operator of wind farms in the Baltic Sea, started operation of the plant in Puertollano, May 2022 in the presence of the King of Spain. The city with nearly 50,000 inhabitants is located about 250 kilometers south of Madrid. The electricity for the hydrogen production comes from a 100‑MW photovoltaic park a few kilometers away and flows via an underground cable into the production hall, in which 16 electrolyzers of 1.25 MW each perform their work. These produce annually up to 3,000 tonnes of green hydrogen, which is temporarily stored in tower-high pressure tanks at 60 bar. The electrolysis plant is located next to the fertilizer factory of Fertiberia and currently covers ten percent of their hydrogen requirement, which according to Iberdrola saves 48,000 metric tons of CO2.
“But this is just the beginning,” stressed Tosun. “In the coming years, Iberdrola wants to increase the production more than tenfold – to 40,000 tonnes by 2027.” The demand is there, since otherwise Fertiberia is using for its ammonia synthesis gray hydrogen obtained from natural gas. That no comparable plant for the production of green hydrogen on an industrial scale is yet in operation is also due to the fact that the whole thing is not as simple as it sounds in the big plans and letters of intent. “It didn’t go smoothly from the start,” admitted Özlem Tosun. “On the contrary – we had a lot of problems. But we also learned a lot and were able to improve a lot as a result. Not only technically, but also economically.” One of the most important points was to optimize the efficiency of electricity use. Contributing to this was that the performance and efficiency of the electrolyzers were able to be increased further and further.
Overall, the practical experience in Puertollano was important “to be able to scale the system.” As far as the large-scale production of climate-neutral energy sources is concerned, the multinational energy company not only sees itself as a pioneer, but is also optimistic about the future. Because Spain first wants to become independent of fossil fuel imports and then be able to export renewable energies. So it’s no wonder that Germany is for Iberdrola “a key market,” as Tosun says, “especially for green hydrogen.”
Lack of regulation as a stumbling block
How the development of a German and European hydrogen industry can be accelerated was one of many other topics discussed at the conference. It is important to break down barriers – for example lack of regulation and infrastructure – it was said in a panel discussion. Such hurdles, the speakers agreed, were in addition to the high costs for H2 production, like before, the crucial reasons why not a small number of companies, despite the positive feasibility studies, are still waiting with the final investment decision. The following figures show just how wide the gap is between aspiration and reality when it comes to the gas of the future: In recent years, the German government has raised the target for domestic production of green hydrogen from the original three gigawatts to ten gigawatts, yet so far not more than 62 MW of generation capacity has been installed. That there is a long way to go, but which can go faster, further practical examples have shown.
“Never waste a green electron again!”
“Did you know that with the wind power that was curtailed in the first half of 2022 alone 1.5 million households in Europe could have been supplied with electricity for a year?“ (The figure refers to average households with a consumption of 3,500 kWh per year.) That was one of several questions with which Alexander Voigt, managing director of HH2E, began his speech. “What could we do with all the green electrons that are not being generated only because the power grid cannot absorb them?” His answer, of course: Hydrogen! But also high-performance battery storage, to be able to offer energy for stabilization of the power grid. That’s how he explained the business model of the planned HH2E factory in Lubmin, Germany. It will use surplus electricity to “reliably and cost-effectively produce green hydrogen.” In addition will come CO2-free heating and, if required, the conversion of the “green molecules” back into electricity.
Alexander Voigt, CEO von HH2E, nutzt künftig Überschussstrom in Lubmin (Foto: Monika Rößiger), Source: Monika Rößiger
With this, the plant could contribute to the decarbonization of industry in Germany and, at the same time, support the energy supply. The final investment decision will be made shortly, according to Voigt, and then the way would be clear for the start of construction. In the year 2026, according to the plan, energy generation is to start: around 100 megawatts of total capacity in the first expansion stage, divided between a 56‑MW electrolyzer and a 40‑MW battery storage system. The electricity for electrolysis is coming from offshore wind farms in the Baltic Sea. Initially, the operators expect to produce around 7,200 tonnes of green hydrogen per year. The production capacity of the plant is scalable up to one gigawatt. Lubmin, once a transshipment point for Russian natural gas, will then become a center for green hydrogen. This can be fed into the existing natural gas grid that extends from the northeast of Germany to the southwest near Stuttgart.
In total, more than 40 companies from the entire H2 value chain presented their solutions and products in the high glass hall next to the conference hall in the Estrel Congress Center. The organizational framework of the H2 Forum was right: There was time to connect during the coffee breaks, lunch and supper. Lively discussions took place at all the tables and stands. That more politicians were present this time than at previous events was, according to Laura Pawlik, Sales Manager of the organizer IPM, particularly emphasized in the feedback from the participants. And also that the representatives from politics and administration were definitely open to further funding.
The date for the next conference has already been set: March 4 and 5, 2025, again in the ECC in Berlin. Focal points will be in addition to politics also the regulatory progress in Germany and Europe.
The major international gas companies such as Linde, Air Liquide and Air Products have always been active in the field of hydrogen, but so far with the industrially demanded “gray” hydrogen based on natural gas. In addition, the hydrogen molecule is essential for many derivatives and chemical compounds. The trend is now increasingly moving towards green, so regeneratively produced, hydrogen. And also and directly here the three companies mentioned are positioning themselves, by establishing very large electrolysis production capacities worldwide and entering into strategic alliances in countries that are ideal for it, because the conditions there (high solar radiation, wind power and hydropower, and water, especially seawater) could not be more perfect.
The main focus there is on blue hydrogen, which can be produced cost-effectively by reforming natural gas and which, through storage (CCS & CCUS) but also through industrial use of carbon, has a lower carbon footprint. On top of this is the very weighty argument that they can additionally benefit from various subsidy programs, be it in the EU or in the USA with the Inflation Reduction Act.
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On the stock market, some of these bright prospects have already been reflected in the share price performance and valuation, but there are differences that could be made use of, since Air Products & Chemicals, in contrast to Air Liquide and Linde, has not yet really participated in the run. Hence the recommendation to bet on the latecomer:
Company Valuation Turnover PE ratio 24 Dividend yield Linde 185 billion USD 36 billion USD 37 0.9 percent
Air Liquide 99 billion USD 33 billion USD 33 1.8 percent
Air Products 52 billion USD 12,7 billion USD 24 3 percent
Air Products & Chemicals
The company is relying heavily on hydrogen and ammonia, to serve long-haul traffic with the latter. In Hamburg, it has joined forces with the globally active petroleum and chemical trading company Mabanaft (subsidiary of the Marquardt & Bahls Group, which operates a global storage facility for all types of petroleum products, including kerosene for aircraft, and its own network of refueling stations) and is planning an ammonia processing plant (cracking) with an investment of over one billion euros in the port Hamburger Hafen. But first it’ll entail blue hydrogen, which is to find its way to Europe, and from countries such as Saudi Arabia, where they are working together on the project Neom Green Hydrogen and where Air Products & Chemicals was able to land an order volume of 6.7 billion USD.
A look at the charts shows that Air Products & Chemicals is not far from last year’s lows, whereas Linde and Air Liquide have reached new highs. As a group, these shares will continue on their path, but, as a latecomer, the share of Air Products & Chemicals appears the most favorably valued. The quarterly dividend was recently increased to 1.77 USD per share. First price target: 300 USD.
Disclaimer
Each investor must always be aware of their own risk when investing in shares and should consider a sensible risk diversification. The FC companies and shares mentioned here are small and mid cap, i.e. they are not standard stocks and their volatility is also much higher. This report is not meant to be viewed as purchase recommendations, and the author holds no liability for your actions. All information is based on publicly available sources and, as far as assessment is concerned, represents exclusively the personal opinion of the author, who focuses on medium- and long-term valuation and not on short-term profit. The author may be in possession of the shares presented here.
Things had quietened down on the Bonhoff front. But then new information surfaced in February 2024 which prompted German transportation minister Volker Wissing to take action. On Feb. 15, he released Klaus Bonhoff, head of the policy issues department, from his duties with immediate effect and also moved a divisional head. The reason behind the decision lies in a discrepancy uncovered during an internal review undertaken by the transportation ministry, also known as the BMDV. The affair gained added force when German news magazine Der Spiegel reported on Feb. 20 that Wissing had stopped “completely the approval of hydrogen funding.” Yet in reality funding is not being axed. The ministry is merely carrying out reassessments that could lead to a delay.
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But one thing at a time. In this article we’ll attempt to shed light on who did what to whom as well as how and when it all happened.
It started back in summer 2023 when German business paper Handelsblatt published an article about a questionable friends and lobbying network. The suspicion of nepotism that was raised on various sides was based on the alleged existence of an overly cozy network of contacts linking a number of different political and industry figures. Bonhoff was reproached for his reported friendship with Werner Diwald, chairman of the German hydrogen association, and its president, Oliver Weinmann, both of whom he allegedly joined on a ski trip. What’s more, it was claimed that Bonhoff helped the German hydrogen association, abbreviated to DWV, to gain funding in 2021.
Stefan Schnorr, state secretary at the German transportation ministry, was tasked with clarifying the facts and, according to Der Spiegel, gave the all-clear a few weeks later, stating there was “No trace of favoritism.” At the same time, Bonhoff received broad support, particularly from the hydrogen sector.
Everything bubbled up again in early 2024 when Der Spiegel quoted parts of an email exchange between Bonhoff and Diwald (see freedom of information website www.fragdenstaat.de). This apparently substantiated a high degree of closeness and familiarity between the two men.
Inconsistencies and contradictions
In fact, what the disclosed emails show is that certain wishes and views regarding funding measures had been articulated on the part of the DWV. For example, Werner Diwald wrote in September 2021: “In view of the upcoming elections it would certainly be good for grant approval to be given before the end of this legislative period.” (Der Spiegel, Feb. 6, 2024)
This prompted Bonhoff to forward the email to the appropriate specialist department at the transportation ministry where he inquired after the state of affairs, according to the statement he gave to H2-international. As Der Spiegel and Tagesspiegel Background, another German publication, both reported, he also “orally supported” the project. However, given this expression of support was previously denied, this admission could now cause no end of trouble for the ministry.
LobbyControl then took it as proof that favoritism was indeed at play. On Feb. 16, 2024, the online platform stated that days before the ministry had conceded there were “inconsistencies and contradictions” in the allocation of funding and that is why minister Wissing relieved department head Klaus Bonhoff from his duties.
“The necessary relationship of trust between the minister and the head of department no longer exists.”
Stefan Schnorr, state secretary at the German transportation ministry, in the Frankfurter Allgemeine Zeitung (FAZ)
Furthermore, LobbyControl criticizes what it sees as the inadequacy of compliance rules at the transportation ministry and Bonhoff’s lack of a clear-cut separation between his personal and official contacts when it comes to grant allocation.
Overly cozy network?
Klaus Bonhoff, who is also known as “Mister Hydrogen” due to his extensive experience in leadership roles in the H2 and fuel cell sector, had previously worked for many years on fuel cell cars at Daimler before becoming managing director of Germany’s National Organisation Hydrogen and Fuel Cell Technology, or NOW, in 2008 (see HZwei, April 2011 & H2-international, October 2019). From there he transferred to his post at the German transportation ministry. His successor at NOW since May 2020 has been Kurt-Christoph von Knobelsdorff (see H2-international, February 2021).
Thanks to his considerable expertise, he was a popular and long-standing contributor at numerous industry events since he was well known as an adept public speaker with a skill for highly diplomatic and precise wording. It’s understandable that the DWV in particular wanted to get close to him given that the association comprises many major German industrial corporations from the H2 community and Bonhoff, in his role as NOW spokesman, was the main point of contact for funding applications in the hydrogen sector. However, the responsibility for awarding funds, both then and now, lies with the project management agency Jülich (PtJ).
The DWV’s role
Over the years, the DWV has developed – especially under the leadership of Werner Diwald – from a highly committed body of motivated idealists to an industrial lobbying group. Because of this change, some of the original members who prefer an idealistic approach have turned their back on the association in the past few years. Some of them have urged repeatedly for less dependency on industry and greater levels of transparency. Most recently, Johannes Töpler, who was a long-serving chairman of the DWV, resigned from his post as the DWV’s education officer at the turn of the year. Among the reasons for his resignation was that he no longer thought education and training, a crucial area in his view, was receiving the appropriate attention and appreciation it deserved within the work of the association.
In terms of legal form, the DWV is officially a registered association. Over the years, Diwald has worked to set up various expert commissions to which participating companies pay high-level contributions. This enables the DWV to represent their interests, including on the political stage in Berlin and Brussels. As such, political evenings and business talks are organized on a regular basis where political and industry representatives can meet, as commonly occurs in associations nowadays. One of these expert commissions, HyMobility, was awarded millions of euros in funding in 2021 via the PtJ, i.e., from the transportation ministry’s budget, something which Bonhoff is now being reproached for.
The ministry confirmed to H2-international: “The HyMobility innovation cluster is supported by the Federal Ministry of Transport and Digital Infrastructure as part of the national hydrogen and fuel cell innovation program. The grant is up to €1,438,600. The calculation is based on actual expenditure up to the maximum grant level. […] The HyMobility cluster is financed through grants, contributions for cluster membership, and a proportion of the membership contributions of the DWV. […] The funding project facilitates cluster management, cluster coordination, the support and guidance of the expert commission’s work as well as the preparation of findings from the expert commission and from the expert committees and the provision of recommended courses of action to meet further development needs. In addition, the funding covers the venues for cluster meetings, the creation of studies and analyses as well as technical and legal reports. […] The funding is allocated for specific purposes.”
HyMobility’s aims, according to its project outline, include: “Involvement in the formulation of relevant policy and legal conditions at a national and European level for the market preparation and introduction of low-carbon mobility based on renewable hydrogen. […] the creation and strengthening of understanding for and trust in innovative and low-emission vehicle technology based on renewable hydrogen within transport and national and European politics.”
In connection with this, the DWV confirmed to H2-international that the goals of the expert commissions are to “attract attention for the particular topic, raise awareness, bring together stakeholders from the relevant areas and sectors, prepare joint positions and recommend courses of action to policymakers.
LobbyControl makes the following criticism in relation to this: “It is unusual and questionable that an industrial lobbying association such as the DWV should receive a state subsidy for work that it would carry out regardless: maintaining networks and lobbying.”
“The HyMobility project is supported by the Federal Ministry of Transport and Digital Infrastructure through a total of EUR 1.8 million in funding as part of the national hydrogen and fuel cell innovation program. The funding guidelines are coordinated by NOW GmbH and executed by the project management agency Jülich (PtJ).”
https://dwv-hymobility.de/organisation/
Bonhoff told H2-international: “HyMobility is funded in the same way that the environment ministry funds the HySteel project which was approved prior to HyMobility.” Tagesspiegel Background reported on this very subject on Feb. 7, 2024: “The ministry [German environment ministry; editor’s note] is satisfied with the project. ‘Such networking is effective and successful, is conducive to the sharing of best practice and the establishment of horizontal and vertical partnerships in research, testing and production.’”
Among the 22 members of HyMobility are NOW and H2 Mobility Deutschland. H2 Mobility is a consortium of various automotive, industrial gas and petroleum companies plus an investment fund focused on the construction of hydrogen refueling stations in Germany. Practically every station that is built and managed by this Berlin-based company is subsidized to the tune of nearly 50 percent from European funds or the funds of German central or regional government. One of the three directors is Lorenz Jung (see H2-international, October 2023), who took up the role in April 2023. According to information from LobbyControl, he is the son-in-law of Oliver Weinmann. Jung, whose wife (Weinmann’s daughter) works at NOW in the communications department, has been a manager at the company virtually since its inception.
The roles of Weinmann and Diwald
Weinmann is a founder and board member of what was then the German hydrogen and fuel cell association (see HZwei, October 2010). Born in Hamburg, he had initially worked for city’s electricity company (Hamburgische Electricitäts-Werke or HEW) which was taken over by Swedish corporation Vattenfall Europe when it became the majority shareholder in 2001. Weinmann held the position of managing director at Vattenfall Europe Innovation GmbH from 2010 to July 2023, followed by head of innovation management at Vattenfall Europe AG. From 2020 onward he has also worked in a voluntary capacity as the president of the DWV. In addition, he is chairman of the NOW advisory council, vice chairman of the hydrogen body Wasserstoffgesellschaft Hamburg and holds or has held – according to his own HyAdvice website through which he offers freelance consulting services on matters including funding – further leadership positions at various organizations, among them Hydrogen Europe and the Energy Storage Systems Association or BVES.
Oliver Weinmann at a parliamentary evening in Berlin in 2022
Similar to the way Weinmann operates with his HyAdvice consulting business, Diwald offers his services through PtXSolutions, formerly known as ENCON.Europe. The company is the vehicle through which the DWV chairman provides consultation as a sideline to institutions such as the DWV, Encon Energy EOOD (ENCON subsidiary), Enertrag (former employer), NOW, Performing Energy (DWV think tank) and Vattenfall Europe Innovation. Originally, ENCON.Europe had undertaken some work for the DWV (see H2-international, October 2020). According to a statement by Diwald, ENCON.Europe at the time played a considerable part in increasing the visibility of the DWV without itself appearing in the limelight. He says the company positioned the DWV and the Performing Energy expert commission exclusively as brands in the political sphere and negotiated in the interests of the association. From 2017, the company’s staff included Dennitsa Nozharova, Werner Diwald’s wife, who at the same time also worked for the DWV and is also involved in Encon Energy EOOD.
Fig. 3: Werner Diwald has been DWV chairman since 2014
Performing Energy was the first expert commission that the DWV initiated in 2015 on the back of Warner Diwald’s efforts; Diwald himself had previously created this alliance for wind-based hydrogen systems in 2011 and taken up the position of its speaker (see HZwei, January 2012). Participating organizations include Enertrag and Vattenfall as well as other companies which are also involved in other groups within the network.
Werner Diwald addressed the situation regarding some association members by stating in an email seen by H2-international: “The media’s assumptions about a possible breach by the DWV of compliance rules in relation to the funding application made by the HyMobility innovation cluster are unfounded. […] There was no improper influence exerted by the DWV. The DWV does not accept funding to carry out its statutory activities. […] By virtue of the funding of the HyMobility innovation cluster by the BMDV, the DWV has clearly not placed itself in a position of dependence on the government.”
Furthermore, the DWV has yet to issue a public statement, with the exception of a communication disseminated to association members (as seen by H2-international). The message sent, at the end of February 2024, outlined that “initial measures” have been “immediately introduced” that “go beyond the content of the DWV’s ‘Code of Compliance’ in order to make a comprehensive review of the situation.” It goes on to say that the DWV executive committee has “immediately commissioned a comprehensive review of the DWV’s compliance rules and of external and internal processes and procedures in the context of funding applications and funding allocations.” This is to be carried out by Berlin law office Redeker Sellner Dahs.
H2 funding frozen?
The saga then reached its peak after Der Spiegel reported that the transportation minister had allegedly frozen all funding for H2 projects. According to the article, no more funding is to be approved for the sector for the time being and no further agreements are to be concluded. Even amendment notices will require approval at state secretary level, it said.
However, a press spokeswoman for the ministry clarified the issue at a press conference on Feb. 21, 2024, by stating that the ministry had “not stopped hydrogen funding per se” but is carrying out more thorough assessments of funding applications. These “are currently focused on the approvals procedure for the DWV’s HyMobility funding project.” Should relevant evidence be produced during the investigation, further funding projects will also be examined more closely if necessary.
The reason for this tightened approach seems to be the Brunner affair. It relates, among other things, to the email exchange that took place via a personal GMX account through which Klaus Bonhoff and others communicated with Bavarian businessman Tobias Brunner, managing director of Cryomotive and Hynergy and a key figure in establishing the hydrogen technology application center WTAZ in Pfeffenhausen. LobbyControl disapproves of this “use of a private email account for official communication” since it meant this email exchange was not known to the ministry’s internal review department and therefore could not be taken into consideration in its final report. In all, there are 14 gigabytes of data that require sifting, which explains why there is a delay in the processing of further approvals.
Bloom Energy is planning a cooperation with Shell to use its SOEC technology for the large-scale production of hydrogen. Bloom points out that they’ve already performed very successful series of tests with the Ames Research Center of NASA in Mountain View: 2.4 metric tons of H2 per day were able to be produced there – best performance in terms of energy input in relation to hydrogen output and thus far superior to PEM and alkaline electrolysis.
Bloom Energy reports for the fourth quarter of 2023 a turnover of 357 million USD, although they expected 450 to 500 million USD. That makes it 1.33 billion USD for the entire year 2023, when it was to be 1.4 to 1.5 billion USD. The non-GAAP profit margin is expected to be 28 percent in 2024. However: 160 million USD of the missing turnover is on account of a billion-dollar framework agreement with the South Korean SK Group, which is also the largest single shareholder in Bloom. Annual targets for projects and the associated revenues (orders) were defined here, which came out 160 million USD less than expected in year 2023.
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These revenues will only be realized with a delay, namely starting 2024. Now, there is a new contract that runs on a quarterly basis and therefore – according to the chief financial officer – is much more calculable, as minimum sales per quarter have been defined. That the stock market is disappointed by the development in 2023 is obvious. On top of that, the growth in the first half of year 2024 will come out lower than expected, until things really get going again in the second half of the year. For 2024, a turnover target of 1.4 to 1.6 billion USD has now been set – it originally should have been over 1.8 billion USD. But – and this is positive – the non-GAAP profit is expected to lie between 75 and 100 million USD this year. Negative is that CFO Greg Cameron is leaving the company for personal reasons. This is truly a cocktail of “short-term” negative news, which may soon be forgotten in view of the prospects.
“Our full expectation for Bloom is that it will leave 2024 with a bunch of commercial momentum, both in winning deals as well as delivering on systems.”
Leaving CFO Greg Cameron
There is an orders on hand of 12 billion USD (backlog: 3 billion USD in hardware and 9 billion USD in long-term service contracts). The company with its Energy Servers is very well positioned and has a leading position in high-temperature electrolyzers, which will come onto the market in 2025 – initially with a capacity of 2 GW per year and a strong sales growth, likewise starting 2025.
Test series, including in the Idaho National Lab, were extremely positive, it was stated at the press conference on company figures. Nearly 750 million USD cash in the bank is a healthy self-financing cushion. Not until August 2025 must 250 million USD in debt be cleared. With higher share prices, it should not be a problem then to issue new shares and replace foreign capital with own capital. More important is the look at the company’s profit: That came out very well, with a plus of 27.4 million USD as non-GAAP profit in the fourth quarter 2023.
The goal is clearly defined: In 2024, the profit margin is to be increased through cost management, higher margins in the service area and price discipline. Material costs are set to fall significantly this year to avoid supply chain problems. The production facility in Fremont, California has a capacity of 700 MW per year, which can easily be doubled. In addition, new business models (energy on demand 24/7 and heat & power) and many innovations will characterize the new fiscal year. Clear is that AI as well as the increasing electrification will not allow, like before, an energy demand of around AI and increasing electrification will not allow energy demand to rise by 0.5 percent per year, like before, but by a factor of ten, according to CEO KR Sridhar. The missing grid expansion will therefore promote island solutions, like what Bloom offers.
In the USA alone, 90,000 miles of high-voltage power lines would have to be built to transport the required energy. In 2022, it was just 700 miles in the USA. The risk of power outages and a lack of energy availability thus increases considerably. This applies not only to the USA, but also to many industrialized nations. Whereas in the past it was often about the price of energy, now it is about the availability and security of supply, since a loss of power can lead to enormous damages.
All this plays into the hands of Bloom Energy, said Sridhar. The demand for stand-alone solutions, for example for data centers, is enormous. Talks are being held with all important and leading companies in the industry. The talk is now always of gigawatts and no long of megawatts. Many an AI company has already received a message from its energy or electricity supplier that the desired amount of energy cannot be produced. In addition to these so-termed greenfield data centers, which basically form from scratch, are coming newly planned microchip production facilities, charging stations for commercial vehicles and logistics centers.
Here, Bloom is counting on its rapid project implementation (“rapid deployment capability”) and flexibility. Numerous orders are expected here by 2024. Furthermore, waste heat from data centers via net-zero stream and net-zero cooling will be used for process heat and be a CO2-free waste product. With these solutions, Bloom can support energy suppliers by providing energy flexibly, cleanly (50 percent CO2 reduction), 50 percent more cheaply and five times faster than ramping up gas turbines. Thus Bloom is also becoming a partner to energy suppliers.
Dr. Ravi Prasher was able to be gained as the new chief technical officer (CTO). He is, among other things, a member of the prestigious association National Academy of Engineering. He is to turn business opportunities into concrete orders. He comes, like so many board members at Bloom, from General Electric (GE), where he worked for 20 years. He sees the high-temperature fuel cells of Bloom as a game changer, with which no SOX, no NOX and no CO2 emissions are produced during the combustion of hydrogen. Bloom could, according to Prasher, solve all the problems that many industries have with their energy use. In addition, Bloom’s electrolysis technology is the most efficient on the market.
General remarks
To various special analysts of notable banks Bloom has pointed out that some projects are delayed, as potential customers often need more time than planned to develop the spaces for data centers (approval procedure) or to clarify financing issues. This does not directly have anything to do with Bloom, but must be taken into account in the schedule. In addition, more attention will be paid to customer payment management. Accordingly, the second half of the year will be significantly more robust than the first half, it was said: 60 versus 40 percent in the second half of the year.
Potential not yet priced in
Starting 2025, the new market for high-temperature electrolyzers will generate further growth potential. Among other things, this technology will be used in four of the seven planned Energy Hubs of the Biden administration. As the outlooks are good and Bloom offers the right technologies for safe, clean and available decentralized energy solutions, the stock market will not be able to avoid anticipating all this in the share price. This will also result in a number of major orders this year, which, however, will only be included in the balance sheet from 2025 onwards due to the timing of implementation. For analysts, this is then the basis for upgrading the share – from “hold” to “buy” or “strong buy.” The current price weakness will soon pass and will be forgotten if Bloom – and this is expected – can book corresponding orders this year. The potential of shares from the electrolyzer sector will come on top of this.
Strongly depressed prices are clear buy prices
With a stock market valuation of only 2 billion USD an undervaluing has been reached that could even make Bloom a candidate for takeover. GE or Siemens Energy should take a close look at the company, as the SK Group has done: participation and joint project development. It would be better if the stock market were to correctly assess the prospects and quickly forget the current undervaluation. Year 2024 will be a transition year with weaker growth, but this will be followed by many years of very strong growth, which can be inferred from many of the statements made at the press conference for the fourth quarter of 2023 and the year as a whole. Important is above all that Bloom is well on the way to becoming profitable. For 2024, the previous CFO was targeting a non-GAAP profit of 75 to 100 million USD.
Disclaimer
Each investor must always be aware of their own risk when investing in shares and should consider a sensible risk diversification. The FC companies and shares mentioned here are small and mid cap, i.e. they are not standard stocks and their volatility is also much higher. This report is not meant to be viewed as purchase recommendations, and the author holds no liability for your actions. All information is based on publicly available sources and, as far as assessment is concerned, represents exclusively the personal opinion of the author, who focuses on medium- and long-term valuation and not on short-term profit. The author may be in possession of the shares presented here.
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