The world is on the verge of a historic energy shift, and Canada, with its unprecedented growing sectors like hydrogen, is well-positioned to lead the way.
While Canada has long been a leader in oil and gas production, innovation in fields such as hydrogen will be critical to the country’s energy leadership in the future.
Basic Facts
Canada has committed to a 30 percent reduction in greenhouse gas (GHG) emissions by 2030. Furthermore, the federal government is working on a strategy to attain net-zero emissions by 2050. Although this aim is lofty, it provides Canada’s creative industries with a unique opportunity to take the lead.
As Canada makes its way through the energy transition, the hydrogen industry is emerging as a critical component in meeting these emissions targets.
Historical Perspective
The hydrogen economy was first advocated in the 1970s, with hydrogen being considered a replacement for carbon-based fossil fuels.
It envisioned a system in which the economy relied solely on hydrogen as an energy carrier, eliminating the usage of fossil fuels, lowering CO2 emissions, and ensuring energy independence. The commercialization of consumer fuel cell vehicles and the construction of fueling infrastructure focused on development.
Now that the hydrogen economy concept is being implemented, this business can drastically reduce greenhouse gas emissions while creating high-wage jobs and improving air quality.
What to Know About Hydrogen
Hydrogen is just as deadly as any other combustible fuel. On the other hand, its distinctive traits should be considered a plus. Because hydrogen is lighter than air, it disperses quickly in the event of a leak. As a result, the risk of buildup and igniting is reduced. In addition, because hydrogen does not contain carbon, its flames produce little radiant heat. As a result, hydrogen is far safer for users and first responders in the case of an accident than conventional hydrocarbon fuels (such as gasoline).
Hydrogen Gas Stocks in Canada
Canada is not just one of the world’s major hydrogen producers, but it also creates novel end-use applications and technologies for industry with domestic and international enterprises.
On a smaller scale, several businesses are stepping up to the plate. Listed below are some of them:
Ballard Power (TSX:BLDP)
Ballard Power is the most well-known (TSX:BLDP). The firm is a leader in the field of hydrogen fuel cells. It has shipped over 850MW of (Polymer Electrolyte Membrane) PEM fuel cell devices and has signed partnerships with some major automakers. It’s worth noting that Ballard’s product is financially feasible.
However, as with any new technology, acceptance has been delayed since the corporation concentrates its efforts in areas where fuel cell technology is advantageous.
Ballard is widely regarded as one of the top fuel cell firms globally, with cutting-edge technology and proven applications. Regrettably, the stock has not been a market leader. The company’s stock price skyrocketed in the early 2000s before plunging to the ground and doing nothing for a decade.
Ballard’s stock price soared to multi-year highs in early 2021 as interest in the hydrogen business peaked. Then the bottom came out, and its stock price plummeted by 60% in the first half of 2021. Stock trades Premium subscribers are advised to be careful about Ballard on several occasions. The fundamental technology is good, but the stock price has gotten out of hand.
Ballard’s corporate offices are in Vancouver, British Columbia, Canada. Ballard has made it our aim to create innovative clean energy solutions inspired by our natural surroundings and the local community’s commitment to environmental protection. The Canadian facilities are devoted to their core fuel cell competencies, including the manufacture of membrane electrode assemblies, the integration and testing of fuel cell stacks, the assembly and testing of motive modules, and the support of other products required through engineering services contracts.
Algonquin Power & Utilities (TSX:AQN)
Another gas stock that is recommendable to investors right now is Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN). For weeks, this stock has appeared to be a good buy.
As of the closing on November 10, shares of this energy stock had fallen 13% in 2021. Algonquin has a portfolio of regulated and non-regulated generating, distribution, and utility assets that it owns and operates.
Algonquin had sales and adjusted EBITDA growth of 54 percent and 39 percent, respectively, in the second quarter of 2021. In addition, it benefited from recent acquisitions and expanded its Midwest presence.
The price-to-earnings (P/E) ratio of this company is reasonable.
It pays a $0.171 per share quarterly dividend. That’s a respectable 4.8 percent return.
Loop Energy (TSX:LPEN)
Loop Energy (TSX:LPEN) is a newly listed business, having debuted on the Toronto Stock Exchange on February 25, 2021.
Loop designs PEM fuel cell systems for the electrification of commercial vehicles. The IPO’s demand was substantial, and it priced at the high end of forecasts – $16.00 per share, with a high of $17.44 on the first day of trading.
Fortunately for management, the IPO occurred when investor demand for hydrogen stocks was at an all-time high. Unfortunately for investors, those who purchased during the initial stages of the company’s listing are likely to be sitting on significant losses.
Loop Energy’s stock price has plummeted since its IPO, losing 56 percent of its value. While the downward trend is concerning, it is due to a bad industry mood.
However, as previously said, the markets turned against the industry, and valuations plummeted across the board.
Its primary concentration is on commercial applications, such as light commercial vehicles, transit buses, medium and heavy-duty trucks, maritime, train, mining trucks, material handling vehicles, and stationary power.
Loop Energy is still in the early stages of development. It has only recently begun selling its products and hopes to generate $13.9 million in revenue by 2022, up from only $353 thousand in 2020. It predicts that until 2030, it can reach a long-term CAGR of around 40%.
That’s an incredible rate of growth. However, it remains to be seen whether it can reach this degree of growth, and as a freshly listed company, management has yet to establish its capacity to execute.
Harvest Clean Energy (TSE:HCLN)
Harvest Clean Energy (TSE:HCLN) is one of the newest to hit the market. It invests in a portfolio of the 40 largest Clean Energy Issuers from the Clean Energy Investable Universe.
It has a fund, which is unique in that all 40 positions are equally weighted. That means each stake will make up about 2.5 percent of the whole portfolio. However, the 2.5 percent weighting may not be perfect because the fund is rebalanced semi-annually, as a lot can happen in six months.
With management costs of 0.40 percent, this is a low-fee product. HCLN has $66.1 million in assets under management as of June 30, 2021. It’s a well-diversified portfolio, with 14.7 percent and 30.9 percent of assets coming from Canada and the United States, respectively, with the remainder coming from across the world.
The fund is also interested in renewable energy & clean technologies solutions from start to finish. The ETF has battery and equipment storage assets, and hydrogen and fuel cell equipment areas demonstrate this. Investors can take advantage of this.
Freehold Royalties (TSX:FRU)
Freehold Royalties is one of the best long-term energy stocks. Canadian investors may buy for various reasons (TSX:FRU). Freehold holds land in Canada and the United States that it leases to energy companies for a fee.
Freehold collects royalties from hundreds of enterprises, making this a low-risk business strategy. So, while it’s still vulnerable to commodity prices, it’s a long-term investment you can feel good about.
The stock is also practically debt-free, making it a very safe investment.
Advantages of Hydrogen Gas Stocks & Why to Invest in It
- The benefits of low-carbon energy are revolutionary: a performance that meets your needs, zero emissions at the point of use, and simple solutions to integrate and scale.
- While in operation, our hydrogen fuel cells and battery-powered solutions emit no carbon dioxide or greenhouse emissions, making them environmentally friendly options.
- Hydrogen fuel cells directly convert energy, making them a cost-effective choice to compete with fossil-fuel-powered alternatives.
- All-electric vehicles feature maintenance-free motors with no oil changes, smog checks, or spark plug replacements, reducing downtime and increasing efficiency.
- Because battery power is silent, job sites can operate in the early mornings and evenings while neighbours enjoy a reduction in motor noise.
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HDR provides contact to companies focused on the mining and producing lithium, the world’s lightest metal, lithium compounds and lithium components. Lithium is essential for lithium-ion batteries that play a crucial role in electric vehicles and renewable energy storage.
The growth of these industries and their dependence on batteries is driven by the unprecedented demand for lithium caused by the expansion of lithium mines. Hydr is active worldwide in industrial and emerging hydrogen fuel cells, hydrogen technology, appliance production, storage, and transport. Global Market Insights Inc. predicts that by 2027 the booming hydrogen market is expected to exceed $300 billion. The growing focus on clean energy in emerging markets and the increasing use of hydrogen for new applications have improved the industry prospects.
Hydrogen lowers compression costs and makes use in small and large applications such as power supply and fuel cells affordable. Hydrogen can also help reduce carbon emissions because we can use it for transport and electricity generation, two critical areas for current renewable energy plans, and applications such as heating and industrial purposes such as cement and steel production.
Our topic, “Hydrogen Economy Shares,” includes shares of US-listed companies that sell hydrogen fuel cells and related renewable energy plants that supply hydrogen gas. Since late 2019, it has been a solid 17.3%, compared to a yield of 3.2% for the S & P 500, but it has underperformed this year, falling 4% relative to the index, which has gained 4% for this year. Nevertheless, the stock has gained 26% since the beginning of January.
Let’s talk about green hydrogen before we get into stock selection. First, in an article written by David Fessler entitled “Green Hydrogen: The Holy Grail of Renewable Energy,” he divides the process of hydrogen production into four categories. Next, Fessler lists a few reasons why green hydrogen is the best renewable energy.
The term “hydrogen economy” was coined by John Bockris in a lecture he gave in the 1970s at the Technical Center of General Motors (GM). The hydrogen economy is a concept applicable to practices and industries that reduce greenhouse gas emissions, create skilled jobs and improve air quality.
Hydrogen fuel technology is not new, but the opportunities for growth and investment are promising, given the growing attention on the international stage and the increasing willingness to meet challenges. Canada is moving away from long-term commercialization of fuel cell vehicles for consumers and focusing on the short-term development of fuel cell products that the industry can implement with existing technology and basic infrastructure – think long-distance commercial transport, high-heat sectors such as metal fabrication and large-scale heating of buildings.
If you are a global company that wants to invest in Canada, contact us to discuss your hydrogen project. Earlier this month, Canada and Germany signed an agreement on cooperation in energy research and policy. The agreement focuses on developing hydrogen energy, with both countries aiming for net-zero emissions by 2050. In addition, the partnership aims to accelerate innovation and trade in the green energy sector.
In April, oilfield equipment supplier Baker Hughes BWI entered the plug-and-power charting industry by setting up a private fund for major clean hydrogen infrastructure projects.
Saudi Aramco, the world’s largest oil company, sitting on vast oil reserves, is also making waves in the hydrogen sector. As well, Vancouver is becoming a hub for hydrogen fuel cell companies in Canada, where Loop Energy is more considerable than Ballard Power Systems Inc.
Loop targets heavy-duty applications such as trucks, rail vehicles, naval vessels, and aviation, ideal fuel cell applications.
Loops Rubin praised hydrogen fuel cells as a “functional complement” to diesel vehicles because of their lower emissions. Last year, Boeing’s rival Airbus EADSY unveiled a concept for a hydrogen-powered aircraft, which is currently under investigation.
The New York-based company is focused on developing hydrogen fuel cell systems that can replace conventional car batteries. The company has announced plans for two new green hydrogen plants in the US.
This week, few people noticed, but Vancouver-based Loop Energy Inc. announced that a German trucking company ordered 20% of its hydrogen fuel cells for use in an all-electric fleet of trucks. The order from a German freight forwarder is planned for the next two years and suggests that the green energy transition is far from over. Two of the hottest sectors of the ESG revolution are hydrogen, associated with a $5 trillion global transportation industry.
Technological advances and tons of money spent on research and development are fueling hydrogen for a massive comeback. The European Union has an ambitious hydrogen strategy, and huge utilities are switching to hydrogen; Wall Street is doubling to a projected $1.1 trillion hydrogen market by 2050, hydrogen is abundant, and fuel cell companies see their inventories go skyrocketing, with FCEVs (fuel cell electric vehicles) taking center stage. Given the waning hype and the onset of reality, we believe that the hydrogen economy is poised to tip the balance favouring attractive opportunities for investors.
Towards 2021, renewable energy and clean technologies investments looked good despite a setback caused by the unexpected COVID-19 pandemic. The bubble might have hit hydrogen hard, but it still does many exciting things to keep diesel alive.
As we move into the second half of 2021, we looked at the leading Canadian cleantech stocks on the TSX and TSXV 2021. Since the formation of the Hydrogen Council in 2017, a revival of energy sources has been underway.
SolarV Bioenergy has diverse applications based on a proprietary microalgae technology platform that includes fatty acids for the global nutraceutical market and the biochemical production of clean energy from hydrogen.
Eguana Technologies offers a complete line of proprietary utility and interactive energy storage systems for residential and commercial fueled cell, photovoltaic and battery applications in Asia, Australia, Canada, Europe and the United States of America. SolarV Bioenergy has patented a process for obtaining solar energy by inducing algae with natural enzymes to break down water, oxygen, and hydrogen to produce clean fuel. The duo is also developing the commercial production of omega-3 fatty acids based on the algae technology platform SolarVest.
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