Contact

Plug – Forecasts relinquished again

Plug – Forecasts relinquished again

Plug Power sees itself as a generalist: from H2 production to liquefaction technologies, own electrolyzer production, construction of H2 refueling trailers and stations, and the manufacture of FC stacks for motor vehicles and forklifts. That is the one side of the coin. On the other side, there are various gigafactories that are being built with considerable investment, and require time until sales and profits are generated. In the transition period, high losses will be reported, which can partly be explained with the establishment and expansion of the company. A look at the liquidity alone shows that Plug may have to issue further shares this year in order to finance the company’s ambitious targets, as in addition to capital investment in factories, the large number of strategic acquisitions also cost money.

A sharply rising share of the liquidity – nearly 900 million USD – is not freely available but classified as “restricted” and thus frozen as collateral. On the other hand, Plug certainly has other ways of obtaining new liquidity. I am thinking of sale-leaseback agreements, but also of government support programs and loans under the Inflation Reduction Act. The issuance of a green bond as a convertible bond is also well conceivable.

Advertisements

Figures for the first quarter

Plug Power has presented quarterly figures that contradict the often very full-bodied statements of the executive board. A 210 million USD turnover in Quarter 1 sounds good in comparison to the same period last year. At the same time, however, the loss increased to over 200 million USD, which corresponded to a minus of 0.35 USD per share (GAAP). The wording of the publications gives me the feeling that they want to teach investors in small doses that the short term goals have to be cut back on.

Advertisements

Nevertheless, Plug will continue on its way in hydrogen and develop great potential here, as they are working on a variety of production facilities for stacks, electrolyzers and even hydrogen. My criticism is that Plug is working on too many construction sites at the same time, so capital is being stretched thin and therefore makes additional capital increases or procurement measures likely.

A number of forecasts have already had to be conceded, just as many an order has been canceled and some orders were not able to be collected in the end. Even the recently received orders for three electrolysis plants in Europe (among others, for a steelworks in Bremen with Apex Energy) does not change the overall picture. In the case of various strategic acquisitions, a certain period of integration is required before a positive contribution margin can be achieved.

In addition, Plug’s relationship with companies like Walmart and Amazon, for whom it retrofits forklifts, is still too one-sided. But this is a temporary negative for me, as Plug is also supplying the liquid hydrogen here and will probably continue sale until the time it can produce the hydrogen itself and earn real money from it. I think – not claim – that it’s the two big customers Amazon and Walmart that could have hedged their very high book profits with the exercise of over 100 million stock warrants through the short sale of shares, since Plug’s short interest lies at over 100 million shares. This combination of customer relationship simultaneously mixed with incentives through warrants for Plug shares raises some questions, including about the tax handling, as Plug continually records charges based on the fair value movement of the warrants on the quarterly financial reports.

Summary

Still not a buy. Alternatives are offered by companies or company shares like Bloom Energy, as their outlooks are clearer and more predictably implemented. Until Plug delivers figures that correspond to expectations could be a while still. Many other forecasts that have been given up on substantiate my critical stance. My forecast that the stock market value of Plug could match that of Bloom is coming increasingly into visibility: Plug was valued at over 15 billion USD and now around 5 billion USD, while Bloom from over 4 billion USD has also slid deeper to a 2.7 billion USD valuation, but in view of the expected figures, has the chance, based on the revenue multiple and the forecasted turnover of 1.5 billion USD in 2023, to become higher valuated than Plug. Meanwhile, Plug expects a 2023 turnover of 1.2 to 1.4 billion USD. It’s a bet.

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.

Written by Author Sven Jösting, June 9th, 2023

How rust can advance H2 technology

How rust can advance H2 technology

When iron rusts, it takes up oxygen. If this does not come from the air but from water vapor, hydrogen is left behind. This effect could become the basis for a new energy storage technology. Several research groups and companies are already working on bringing such a storage method based on ordinary iron to market. It would bind hydrogen and release it again at the desired time – and avoid the need for gas storage in the usual sense.

The loading and unloading of the storage medium is nothing other than the rusting of iron and its reversal as needed. To load the energy storage, hydrogen is streamed through pellets of rusted iron – or in chemical terms, of iron oxide. In doing so, the hydrogen pulls the oxygen out of the pellets and binds it to itself. The result is pure, metallic iron pellets and water vapor.

Advertisements

The energy of the hydrogen is essentially bound in the pellets. In this form, it can be easily stored or transported over large distances without the need for considerable safety precautions. To extract the energy again, steam is streamed through the iron pellets. The oxygen from the water vapor binds itself to the iron, and gaseous hydrogen remains.

The trick with the rust has several charms. Iron is highly abundant on earth, does not cost much, and can be transported and stored without much precaution. And the technology has another advantage still. Strictly speaking, the storage mediums made of iron do not contain any hydrogen at all, but merely absorb its energy content. During reloading of the medium, hydrogen is turned back into water. So the steam can therefore be, at least to some extent, recycled. This is particularly important in locations where water is a scarce resource, for example in desert regions where hydrogen is to be produced for Europe on a large scale in the future.

Advertisements

Iron storage in standard container

Like many energy transition technologies, the iron–steam process is not new. Howard Lane had already developed it in 1804. In the 1970s, an industrial plant in Magdeburg was already producing about 20,000 m3 hydrogen per hour this way. But for the modern applications, it needs a few adjustments to meet current requirements.

The startup Ambartec, in which the energy corporation Wintershall Dea has also invested, wants to use the process for hydrogen transport, among other things. For this, Ambartec intends to store iron pellets in 20-foot containers, which can be moved through all the normal shipping modes – from trucks for regional production to overseas transport by freighter. “For the process, a challenge is to condition the iron pellets such that they do not break into dust after only a few cycles or sinter onto the surface,” says Matthias Rudloff from Ambartec.

That has now been achieved by the company, according to its own statement. The demo pellet unit in Freiberg, about 40 kilometers away from the company headquarters in Dresden, has already stably gone through several hundred cycles. The next scaling stage is to come in May; another at the end of 2023. Ambartec wants to deliver the first small number of units to customers starting in 2024.

Besides the iron granules themselves, Ambartec has also worked on the controlling of the process. To provide the proper pressure and temperature gradients, a separate loading or unloading unit is used. “For the hydrogen unloading, steam that is produced in industrial plants could be integrated. The pressure in this is an important aspect, as the steam pressure essentially determines the hydrogen pressure,” says Rudloff.

The released hydrogen is saturated with steam, but otherwise relatively pure. Uses for the hydrogen-producing iron pellets Rudloff sees not only in freight transport but, in combination with an electrolysis and electricity regeneration unit, also as electrical energy storage for stationary applications and sea travel.

Ambartec storage system in numbers

Current scaling: 100 liters

Target size: 40-foot container

Density of iron pellets: 2.5 kg/L

Energy density (vol.): 0.4 kWh/L

Energy density (grav.): 1 kWh/kg

University research

A research team coordinated by Universität Duisburg-Essen is also dedicated to making use of the iron–steam process for hydrogen transport. Its partners are Technische Universität Clausthal and Leibniz IWT in Bremen, as well as Thyssenkrupp Steel Europe AG and the SMS group GmbH as associated industrial companies. The project Me2H2 Eisen-Dampf-Prozess is being supported by the German education and research ministry with 1.3 million euros over three years. A large part of the project will be dealing with the fundamentals like for example exploring suitable alloys. The project has just started, so there are no results to report yet.

Use in industry and trains

Another player is Wolf Energetik GmbH, which focuses primarily on the integration into large industrial processes. “We need energy storage on the dimension of coal piles or large oil tanks,” says Claudia Hain, who founded the company together with the eponymous Bodo Wolf as early as 2013. In this, Wolf Energetik is building on technology from the 1970s. “We did not need to develop the apparatus from scratch, but only to qualify it for new applications,” she says.

She sees an ideal electrical storage application of a closed-loop material process with a high-temperature electrolysis and fuel cell in which both heat and steam are reused again and again. Up to 80 percent storage efficiency would be possible this way, Hain is convinced. Instead of supplying turnkey plants for this themselves, Wolf Energetik wants to be a “technology giver” for industrial plant builders.

Another possible application of the patented technology would be the intermediate storage of hydrogen and the subsequent production of synthesis gas for industrial uses. The Mabanaft Group, which comes from the oil industry and is now working on e-fuel production in Chile and Norway, has already joined as a partner. “Also industrial companies based in Germany that require hydrogen on a continuous basis could use our storage technology to safeguard themselves against supply interruptions,” according to Hain.

In addition, Wolf Energetik is working on a mobile storage for use in trains. The preliminary work has started. A train as a model for the integration has already been selected. In Freiberg, middle of this year, a stationary pilot version is to appear as part of the project Future H Drive in which the storage unit and the reverse fuel cell are combined into a single system that could conceivably be installed in the vehicle. The goal of a subsequent project is then to actually integrate the technology into a train. Partner in this is the holding Deutsche Eisenbahn Service AG.

Author: Eva Augsten

Hydrogen for the energy transition

Hydrogen for the energy transition

The increase of renewable electricity production and the resulting surplus lead us to ask: How toimprove energy efficiency through the use of hydrogen? This 2nd edition of Power-to-Gas covers the global energy issues (generation, distribution, consumption, markets), the production of hydrogen via electrolysis, its transportation and storage or conversion in another form. It takes account of the new energy challenges facing the world and the development of experimentations by adding new projects and realisations.

The author Méziane Boudellal analyses hydrogen production and hydrogen-based fuels. He discusses energy consumption, markets, and transport and presents case studies from around the world with updated energy data throughout. Also included is a reformulated chapter on “Hydrogen Economy and Energy Transition”.

Advertisements

Boudellal has has a PhD in physical chemistry. He was a researcher in Germany in the chemical and electronic sector, then in France in the automotive sector. He is also the author of French books about Smart Home, Combined Heat and Power and Micro Cogeneration as well as Fuel Cells.

The paperback book, which was published in black & white in March 2023, consists of 252 pages and includes 192 pictures as well as 39 tables.

Advertisements

Source:
Boudellal, Méziane; Power-to-Gas – Renwable Hydrogen Economy for the Energy Transition, De Gruyter, ISBN 978-3-11-078180-9

Photovoltaic firms discover hydrogen

Photovoltaic firms discover hydrogen

The MVPS 40: a 40-ft station with two electrolyzer converters (EC-UP) – up to 8 MVA output, © SMA Sunbelt Energy GmbH

40-ft station with two electrolyzer converters (EC-UP), © SMA Sunbelt Energy GmbH

For an electrolyzer to work with electricity from the grid, it needs a rectifier. The rectifiers work, in essence, like a photovoltaic inverter – but the other way around. Several companies from the solar industry are now active in this area. Positive side effect: Your technology is inherently network friendly. (more…)

Significant quantities of hydrogen from abroad

Significant quantities of hydrogen from abroad

Thorsten Kasten, © DWV

© DWV

Membership of the German hydrogen and fuel cell association DWV is going up and up. Not only that, the difficult energy policy situation at the moment means the association is gaining in importance too. For several years the DWV has been evolving into a central industry association alongside the German gas and water industries association DVGW. In order to further improve cooperation between the two organizations, in spring 2021 the DWV executive committee selected Thorsten Kasten, at the DVGW’s suggestion, to become its second chairman (see H2-international, August 2021). H2-international spoke to Kasten during the Hannover Messe about his first year at the DWV and to Tilman Wilhelm, who from April this year has headed up the regulatory policy, press and public relations work of the DVGW, about the challenges in the energy space. (more…)