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It's good to see the new CEO hitting the ground running. I thought he was slightly abrasive during his first quarterly updates meeting a few months back, but it showed that he's passionate about it and just got a little annoyed that the analysts and some shareholders are being a little too impatient for results.
I've got my fingers crossed for a repeat of 2019-2020 (preferably without a pandemic) as the early projects begin to finalise and we see some big orders come in, and add to that the projects that are running a bit late for their 2025 self-imposed deadlines leading to last minute ordering of electrolysers. Seeing the price shift today on fairly modest order announcements (but long term planning) is very positive.
Still holding.
(January 6, 2023 - Oslo, Norway) Hydrogen technology company Nel and Europe’s largest supplier of renewable energy, Statkraft, newly signed a contract for delivery of 40 MW of electrolyser equipment, and will thus collaborate to create a strong value chain for production of green hydrogen in Norway.
“We are determined that we will contribute towards making Norway a leading producer of renewable hydrogen, and to establish an eco-system of electrolyser and equipment suppliers,” says Nel’s CEO Håkon Volldal and CEO of Statkraft, Christian Rynning-Tønnesen.
The announcement was made in connection with the German Vice Chancellor Robert Habeck’s visit to Nel’s fully automated electrolyser manufacturing facility at Herøya in Norway. The Norwegian Minister of Trade and Industry, Jan Christian Vestre, is also joining the delegation together with his colleague, Minister of Petroleum and Energy, Terje Lien Aasland.
The Ministers are enthusiastic about the two companies’ plans for a green hydrogen value chain in Norway.
“It is encouraging that leading Norwegian players such as Nel and Statkraft are planning value chains for green hydrogen in Norway. This is an important step in the right direction to achieve our ambitions to build a coherent value chain for hydrogen and facilitate the production of hydrogen with no or low emissions to cover the national demand for hydrogen”, says Minister of Petroleum and Energy Terje Aasland.
Statkraft recently placed a purchase order for 40 MW of alkaline electrolyser equipment from Nel. The electrolyser stacks will be produced at Nel’s manufacturing plant at Herøya and used for the production of renewable hydrogen in one of Statkraft’s many hydrogen projects.
As Europe’s largest supplier of renewable energy, Statkraft has the ambition to accelerate its annual development rate to 4 GW of new power production per year and to add 2 GW of renewable hydrogen production by 2030. In Norway Statkraft will strengthen its efforts in developing new renewable power production as well as flexibility within hydropower and wind power both on- and offshore.
“The contract with Nel is the first important step in materializing our ambitious target of 2 GW of green hydrogen and securing production capacity for our diverse pipeline of hydrogen projects,” says Rynning-Tønnesen.
Volldal is very excited to have Statkraft on the customer list.
“Statkraft is Europe’s largest producer of renewable energy and a well reputed and highly knowledgeable renewable energy company with an ambitious growth agenda. We are extremely proud that they have elected us as a supplier of green hydrogen technology,” Volldal says.
“With this and other orders Nel is strengthening its position as a leading supplier and exporter of hydrogen equipment, which is crucial for the green transition in Europe and beyond, and for the development of new green jobs in Norway,” Volldal says.
I would hope that FCEV still holds some advantages over H2 ICE. Definitely lower emissions and, to my mind, better efficiency when coupled with regen into the onboard battery. I think an electric motor is just a better propulsion system for rotary motion. Tesla has certainly proven that last point.
The only advantage H2 ICE seems to have is lower cost of manufacture. But I suspect that is simply one of existing manufacture scale. I wonder if you were manufacturing fuel cells at the same scale as ICE is today, whether you would also be an equivalent cost per vehicle.
https://hydrogen-central.com/porsche-hydrogen-engine-beats-v8s-topauto/
I hope Dennis doesn't feel the need to 'kitchen sink' the report. Things must be really bad if he decides it's necessary to throw out even more bad news. If he checks the share price he should recognise that sentiment is already nearly rock bottom so he should feed us a positive vision of growing sales instead (as long as that's within his control to deliver). All the big hydrogen decisions should be taken by 2025 so all the demonstration plants should be operating before then which in turn means that 2023 and 2024 are critical delivery years for all the FOAK systems we've been fed for the past 4+ years. Somehow it just doesn't feel like that's what we're building up to. I don't really mind if I've got to wait a little bit longer, but just don't sell it all to Linde for £1 though, please.
Backing the piece of the puzzle that makes the serious money is tricky to get right...just ask IBM.
The UK government has a particularly bad record with choosing which technology to back. That bodes well for us assuming they've got it wrong again. But even if it is a hydrogen future, there's still choices to be made among backing the electricity generation, the electrolyser manufacture, the system construction, the hydrogen distribution chain, fuel cells, etc. It's almost never in the hardware, so expecting ITM to make us rich may be a tough ask. I suspect Plug Power have the better approach as they're in nearly every link of the chain...still it's not doing much for their share price right now either. 2023 should be an interesting year to join a few more dots. Maybe by the end we'll be able to make out what the picture is supposed to be. Happy to wait and see.
The reason I think it is not linear is like this example.
If from a nominal wind generating power of 10GW you found you had excess generation capability of 1GW (9GW used and 1GW excess), then you doubled the available wind generation you'd now have 19GW excess having just added 10GW to an already overcapacity period. So the excess hasn't just doubled to 2GW.
Sorry I added some confusion there. I didn't mean linear wind speed generation, I meant is it linear excess versus added capacity. i.e. If you double the number of wind turbines do you end up with double the excess?
I've been wondering for a while how to model the excess. I'd be surprised if it's as simple as linear. I've shared it before but, in case you missed it, this is the wind constraints table I use to gauge current excess generation.
https://www.ref.org.uk/constraints/indexbymth.php
I've wondered if we can relate that back to the generation demand from gridwatch and build a model of excess.
True Arthur. Operation during excess generation is definitely the point, but I'm sceptical that operating solely during those periods, which is what the article suggested, can ever be commercially cost effective. Operating outside of those periods is not green hydrogen, but they should maybe add another colour definition or simply call it grey. Their offtake customer is already using grey hydrogen so does it really matter that they get a bit of grey from this electrolyser source as well? They will still know exactly how much of it is green to calculate their decarbonising footprint.
It may be that I'm completely wrong and that the cheapest way to run this plant is 'only' during excess generation when you may even be getting paid to take their electricity so you've got no input costs either. I wonder though whether their estimate of having excess generation 64% of the time is a little over-optimistic.
This sort of thing drives me absoltuely mad. How on earth is this supposed to ever be commercially viable if it's only ever allowed to generate during periods of excess renewable generation? If it were allowed to turn on for longer that would also help drive the demand for even more renewables generation. They should either be allowed to purchase renewable supply from non-local sources or provide pro rata funding for additional solar/wind farms (even if they are not local either). If they don't, then electrolysers are simply being set up to fail as they can't generate enough hydrogen to justify their cost. This whole system is just backwards.
We've all felt this coming for quite a while. Now it'll be other countries that drive this forward and eventually demonstrate what our blinkered government are missing. Then we can simply follow as usual and import from the successful foreign companies. The history of the UK will repeat itself once again. So depressing.
https://www.theregister.com/2022/12/20/uk_hydrogen_report/
If you're right then you might have to act fast on trading release day because that sort of statement tends to have a knee-jerk large fall due to the 'kitchen sink' as you put it. But given the obvious positive spin he'd be forecasting for his own tenure the price can often end the day in positive territory as buyers look forwards rather than backwards. Nobody knows, so just play it as you see it.
My concern over a Linde man being put in charge is that it feels like a move towards full Linde integration and therefore a Linde buyout (perhaps that's even why Graham is stepping aside). I've discussed before that technically it doesn't make much sense for Linde to buy it all, but sense doesn't always play a part in company buyout plans. If that were to happen I'd hope that Snam would push for a price that at least gets their investment back (235p). Personally I think that anything under 400p would be undervaluing the position that current investors hold. I don't think ITM is going bust so it doesn't need 'rescuing'. A forced buyout at anything under 400p would simply rob current investors of the future they currently hold.
bilbs is right, but don't understand the ability of the current generation to leave the following generations with an almighty mess to clean up. Today's promises resulting in gigatonnes of leaking CO2 and a net zero dream left in tatters as a result of today's politicians believing another pack of lies from 'big oil'.