Member Info for toneman

I'm not a big fan of Kwasi Kwarteng, but this is a subset of what he had to say on hydrogen a few days ago.

"Further strategies for sectors of the economy will be set out over the next year. This will include publication of our heat and building strategy, ahead of COP26, to set out our long-term approach to reducing emissions from all buildings in this country. It also includes our hydrogen strategy, which is backed by a £240 million net zero hydrogen fund investment, to support—I stress this point—both green hydrogen produced by electrolysers, and blue hydrogen enabled by carbon capture and storage."

"The heat and buildings strategy was always due in 2021; I know that because I commissioned it when I was the Energy Minister. I hope it will be published shortly. We also have a hydrogen strategy. He mentioned that our £240 million hydrogen fund was little compared to other countries, but private sector investment has been very successful in the deployment of offshore wind. The reason we have a commanding position—the No. 1 position—in offshore wind deployment is not because of the Government writing cheques; it is because the Government created incentives for the private sector to invest. That will be exactly the way in which we will scale up the hydrogen economy."

"The hydrogen strategy should be coming out in the summer. It is a twin-track strategy, as I described it as Energy Minister. We are committed to the production of both green, electrolyser-produced hydrogen and blue hydrogen, which comes from carbon capture."

"That leads me to the hon. Gentleman’s second point. He will know that there are a number of attractive sites for carbon capture here in the UK. We have set out our road map for two clusters by 2025 and two more by 2030, and we are in the process of deciding how to proceed on that. He can rest assured that Acorn is a very attractive project; it is something that I have looked at, and I am sure we will have some more information on that."

"The hon. Gentleman will know about the offshore wind opportunities in Northern Ireland, I am particularly excited about the Toggle showing location ofColumn 565opportunities for hydrogen, and he will also know about the operation of Wrightbus and its efforts to bring hydrogen into the transportation system. There are exciting opportunities for Northern Ireland in relation to the net zero 10-point plan and I would be happy to discuss them with the hon. Gentleman."

"My right hon. Friend will know that in the United Kingdom we have an extremely diverse range of buildings and dwellings, which means that a one-size-fits-all policy just does not work for energy in the UK. There are lots of ways in which we can decarbonise buildings, which is exactly what will be spelled out in the heat and building strategy and—to a lesser degree, but more focused on hydrogen—in the hydrogen strategy."

beardozer, actually there's plenty of them, but a limiting factor could still be in our ability to isolate them at a commercial price. Either way I'm with you on the hydrogen future.

That's right Boaty. All that 40GW does is get us is close to today's electricity demand. Once you factor in all the non-electricity energy demand then there's still a lot more solar, wind and tidal to install. That's why for a hydrogen economy to take off we have to be unafraid to import as well. Australia, North Africa and the Middle East are going to have to be huge producers.

No problem Boaty. The first thing would be to stop converting everything into seconds. All that's telling you is how many GW running for 1 second would produce the same amount of energy as 1GWh, which is why it's such a bit number.

i.e. what you said at the top of your post was really that 3600GW running for 1 second produced the same amount of energy as 1GWh. Instead just think that 1GW running for 1 hour is 1GWh.

That might be all you need to get your head around it.

Boaty, I think your numbers are a bit wrong, although your scale isn't far off.
1GW running for 1 hour is 1GWh.
1GW running all year is therefore 8760GWh. (=8.76TWh).
So 228GW running all year is approximately 2000TWh.

Manufacturing 228GW in 2 years is 114 factories.
Manufacturing 228GW in 10 years is 23 factories.
Manufacturing 228GW in 20 years is 11.5 factories.

The side issue is that the electrolyser power is the power consumed which is not the same as the energy you'd get from the hydrogen produced. Coincidentally adding up all the various inefficiencies would probably get us closer to your own figures, but there's something wrong with the way you are thinking about energy and power that you ought to resolve.

Try one of these taskmaster, unless it's a tri-pointed star in which case I didn't look for one of those and don't know what they're called.

https://cpc.farnell.com/wera/05138260001/367bo-torx-tamperproof-10x80mm/dp/TL08592?st=torx%20tamper

Link to the original telegraph article as well.

https://www.telegraph.co.uk/business/2021/05/16/jcb-digs-green-future-hydrogen-engines/?li_source=LI&li_medium=liftigniter-rhr

I suspect this will turn out to be another high pressure alkaline electrolyser. That seems to be the mode of choice for new starts. I think it's slightly smaller footprint and slightly better efficiency than the original electrolysers. Honestly I don't know how that stacks up against PEM in terms of competition, but if hydrogen continues to develop as a viable energy solution then the market is big enough for all these players.

Boaty, I will say one thing about your figures, production capacity and demand, I'm always cautious about the idea of an 'immediate transition' (as you put it). If you set about to change the whole energy picture in, say, 5 years instead of 30 years then yes you would need your 624 gigafactories (or at least some big number), but what do you do with all that production capacity after that 5 year period? Yes, you've completely transitioned the world to green energy and green hydrogen, but these things should have a 30 year lifespan so now you've got all this capacity and no market. Net result is simply shutting all the factories down and laying everyone off. I don't see that as a good long term business strategy (some may disagree - it would be a hell of a 5 years).

Instead I would consider the longer term market where there is some new build, some replacement, some spares, some repairs. I believe that will be achieved in ITM's case with about 5GW production capacity and that same 5GW production capacity will get us where we need to be in 30 years rather than 5. It happens to be close to the path we're already on. I know it doesn't achieve net zero by 2025, but that's why 2050 is a better target...it's just more sustainable and should prevent a boom and bust scenario.

Mid-morning Plug Power announced it's completed its restatement of accounting periods affecting '18, '19 and '20.

"As expected, the adjustments did not impact the Company’s cash position, business operations or economics of commercial arrangements. In addition, there is no change to gross billings. The impact of the adjustments is described in detail in the 2020 Annual Report."

I think that has given us (ITM) a little boost as it ought to be good news for Plug Power and maybe knock on effect on the sector's recently depressed share prices. Plug itself seems really undervalued right now with a market cap of around $11bn whilst they've got $5bn in cash balance. I'd be surprised if the rest of the business only carries a valuation of $6bn.

https://www.ir.plugpower.com/Press-Releases/Press-Release-Details/2021/Plug-Power-Completes-Restatement-of-Previously-Issued-Financial-Statements-and-Files-2020-Annual-Report/default.aspx

Bilbs, agree about the planning delays. I feel the same watching the APPG meetings and various inquiries that get set up. It comes across that the people involved seem to think that the inquiry itself is the important bit rather than the decision. And consequentially the longer the inquiry lasts the better it must be. Totally the wrong mindset.

In the APPG on Hydrogen it's already been made quite clear by the majority of those giving evidence that there is unlikely a one-size-fits-all or silver bullet, and that a broad spectrum of solutions is probably best, yet the meetings go on as if trying to find the one answer we've all been waiting for. In addition nearly every time the request is "can we just have a decision or a policy from government quickly", and yet here we are still waiting. It really is quite feeble. If businesses made decisions that slowly we'd never get anything at all done.

Thanks taskmaster. I'll keep an eye on it.

I found another interesting one this morning "Treeapp" on Android and iPhone. Answer a couple of questions from the app's sponsors and they fund a tree. You get to do it once a day, so one tree a day for just a few seconds of your time. Planted my first today. Not an endorsement as I've only used it once so don't know if there are any adverse side effects, but I hope not. Anyone interested can check it out here and find the app on your app store.

https://www.thetreeapp.org/

Thanks NLLeeroy, the mobile number contact on the web page was a bit of a concern for me too. So today I checked up with Companies House and all the records seem in order there. I also contacted one of the partners they claim to use for tree planting and they confirmed their involvement as well. So thanks for your useful nudge. I'm now confident they are a legitimate, albeit young, company. I've decided I'll support them with my donations.

It's been a month since the last review of the HDRO ETF portfolio of hydrogen stocks.

In the past month there have been no new entrants and none ejected. Every single stock has had its number of shares increased by 20.5%. So roughly $5m added to the portfolio, yet the overall market value has declined by $800k due to the heavy decline in the majority of these stock's share prices. The only two price risers in the portfolio are Linde and Air Liquide.

The portfolio stands at a market cap of $25m.

The largest holding by value is unchanged, Plug Power. Its decline and Linde's rise places Linde second on the table, now only just behind Plug.

34472 shares of ITM have been added taking the total ITM holding to 202523 shares (about £719k). Equates to an additional investment of circa £140k (assuming around £4 per share paid).

Articles like that Motley Fool one picked up by Yahoo are pretty comical. Their bull case simply regurgitating some market growth estimates and not even converting that into an estimate of future market cap. Their bear case is only based on current production levels and then a statement that the market cap is 'too high' and therefore must be expensive. Again, no attempt to indicate what the market cap in a bear-case future might be. If they don't know where the spread of the market cap is heading in either case then how on earth do they judge whether it is currently too expensive. Utter nonsense.

So here's my bull case...market needs 1TW of electrolysers by 2050. ITM gets 10% share of production. Once ITM has 5GW of factory production established it will have produced its share, 100GW of total demand, by 2050. From 2050 onwards as new demand slows but replacement market strengthens ITMs 5GW factories remain in full capacity output, but no further expansion is necessary. Market cap £25m, 14x today's valuation.

Here's my bear case...market only demands 25% of current industrial hydrogen to go green by 2050 which is around 120GW of electrolysers. If ITM get 10% market share that's only 12GW. Current factory remains under-utilised at half capacity with no demand for expansion. Stable production and market prices settle at modest profitability giving a steady market cap of £2m. Approximately the same as today's valuation.

Here's my catastrophic case...market decides green hydrogen has no future and companies like ITM are essentially bust. Market cap £0m.

So if even the bear case is slightly higher than today's valuation, how can it be considered too expensive?

Thanks taskmaster, those links are great. I've added the ecosia extension to my browser. So simple. Can't switch my mobile, but I might be able to persuade my wife at her next end of contract. Amazing the things you discover here.

Thanks Bilbs. Your analysis aligns pretty well with my own. They seem to have thought about the long term protection of what's being planted, although whether that stands the test of time I'm not sure I'll ever find out. Your figures are about right, £1 in less well off nations and anything from £3 to £10 here at home. Your 'Kiva' suggestion is very interesting.

I'll discuss it in detail with my better half this evening. I imagine we may even end up with a mixed approach. If it's just a numbers game then £1 per tree makes the target easier to hit, but mustn't forget about the natural world at home too.

Although reducing my current carbon footprint, where I feel I can, I can't undo all those international flights, diesel miles, years of electricity from coal and huddling around that North Sea gas flame for warmth. So I've been on those online carbon footprint calculators to work out what I've been responsible for...ouch!

The easiest available 'giving back' solution seems to be trees, with carbon offsetting, so I've been looking at the various online alternatives. The one I like the best so far is "Just One Tree". I like the fact that, as well as aiming to reverse deforestation, they haven't forgotten about the oceans.

Before I finalise my decision to support this organisation over, say, Forest Carbon, National Trust or Woodland Trust, I wanted to know what others think about this or similar schemes.

https://www.justonetree.life/

I'd argue that 2008 was worse for a few reasons. Firstly the banks effectively 'lost' the money they thought they had. Secondly, before the crash the government believed that the banks had the money too and so increased the public sector to bring it into line with what they thought the private sector had. Turns out the private sector didn't have it and the banks collapsed leaving a massive tax hole and an overinflated public sector with no private money to pay for it. When the government isn't trusted to borrow (because the GDP has collapsed) and there's no banking sector to get tax revenue from you're pretty much left with no choice but austerity (whether that works or not), or inflation, or both.

This time the banks still have a lot of their money (possibly even more than normal), and a lot of people still have their money and a job and are keen to get back to work. There are some sectors very badly hit and I hope they can find a way to recover. So we're in a much safer position than 2008 as long as business is allowed to return to normal, the public sector shouldn't be under threat, the debt doesn't actually need to be paid off in a hurry so there's no need for austerity or massive tax hikes (perhaps modest ones). We just need to be allowed back to normal and create new jobs for those who were unfortunate to lose theirs as a result of the pandemic.

My apologies for the oversimplification and for offending anyone. You are entitled to disagree with my version of economics.

Fira, not quite May 2020, that only just reached 300. Granted June 2020 peaked around today's level but that was again immediately before the usual set of lousy numbers. But since then we've had Snam come on board, an increase in the Shell Refhyne project, confirmed orders from Linde, and a massive cash boost enough to build another factory when the time is right. Judging an appropriate share price for all that is obviously what is taxing investors at the moment, but as a result of Morgan Stanley's adjustment of their 'happy place' people seem to have forgotten that even they had an anticipated revenue growth forecast of something like 70% a year. If the future market for green hydrogen does actually play out well, then ITM and others shouldn't stay down at these levels for long. It's not as if all the chips are on the table yet either. I'm sure each of the companies in the sector are, even now, arranging further joint ventures and massive project opportunities.