Hydrogen power: It’s clean, efficient and can exist in harmony with Elon Musk

By Kirsteen Mackay


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Investment in hydrogen power is ramping up. Hydrogen presents an environmentally friendly solution to power factories, buses, trucks, and trains.

Hydrogen Stocks

Hydrogen is much more than simply a competitor to electric vehicles. In fact, it might not even be the ideal answer for the next generation of cars. But it could certainly have a viable place in a cleaner world. Hydrogen presents a possible solution for larger vehicles such as buses, trucks, and trains. It could also be a real game-changer when it comes to powering factories. There is much to love about hydrogen, and investment in this area is building as fossil fuel companies look to leverage their talents and R&D teams to harness the power of this abundant source.

A 50-year vision

Over 50 years ago, the chemist John Bockris coined the term “hydrogen economy” when he spoke at the General Motors (GM) technical center in 1970. He envisioned hydrogen as a low-carbon fuel source alternative to conventional fossil fuels. Things have changed drastically in the past half-century, and now more than ever, we need an alternative. And not simply because fossil fuels are a finite resource, but because climate change is rapidly causing irreparable destruction to our planet and life as we know it.

So, is the hydrogen economy a viable idea today? Hydrogen can be used in a fuel cell with air to produce electricity, or it can be burned to produce heat. And with either of these options, its only by-product is water. That’s a welcome alternative to carbon dioxide or other greenhouse gases and particulates. There are also no fears of it ever running out, particularly if its power can be harnessed from the sea.

Hydrogen use in factories

The hydrogen factory of the future envisions a circular solution to slashing greenhouse gas emissions and distributing green hydrogen to industry, business and transportation.

For instance, Sweden has a major steel factory in the works, which will be entirely powered by the world’s largest green hydrogen plant. H2 Green Steel will be making steel in a fossil-free manufacturing process. Production is expected to begin in 2024. H2 Green Steel is attracting investors in a Series A equity financing round worth over $60 million. Spotify founder Daniel Ek is one of the investors.

Power-to-X conversion technologies allow for the decoupling of power from electricity for use in other sectors such as hydrogen to power fuel cells. However, there is fierce debate on the efficiency of such a system compared to alternatives.

Exactly, fuel cells = fool sells

— Elon Musk (@elonmusk) June 11, 2020

Elon Musk tweets, “Fuel cells = Fool sells”

“Fuel cells = fool sells,” tweeted Tesla CEO Elon Musk on June 10, 2020.

He thinks Hydrogen fuel cells are “extremely silly” and went on to say:

“Electrolysis is extremely inefficient as an energy process. If you’re going to pick an energy storage mechanism, Hydrogen is an incredibly dumb one to pick.”

So, it’s clear for us to see that Musk doesn’t rate hydrogen fuel cells as a sensible energy source for cars. That figures as Tesla products are running on lithium-ion batteries and solar.

Hydrogen – Photographer: Terry Vlisidis | Source: Unsplash

Replacing national network gas supply

In a piece for the Sunday Times, James May, Top Gear and Grand Tour presenter, said:

“Hydrogen could also replace the gas used in the existing national network, which is three times bigger than the electricity grid,”

Along with a Tesla, May owns a Toyota Mirai, a fuel cell electric vehicle (FCEV). A fundamental problem with hydrogen versus lithium-ion batteries in electric vehicles is the ease of recharging. There are only 12 hydrogen refueling stations in the UK today, and half are in the South-East of England. Battery cars can be charged at home or in many public places. At the moment, hydrogen is also far more expensive than battery power.

And one significant barrier to hydrogen use is that currently, most commercial hydrogen comes from reforming fossil fuels, such as gas. That’s hardly environmentally progressive.

But then again, battery tech has its environmental issues too. Mining is one of the most polluting, resource-intensive industries, yet many of these mined raw materials (cobalt, nickel, rare earths) are being used in battery manufacture.

May concluded by saying:

“[Hydrogen] is not a very good solution to decarbonising the car. Battery cars are much better for that. Rather, the fuel-cell car is merely the car element of a much bigger energy vision to decarbonise everything. For that reason, I think it is worth pursuing.”

Hydrogen projects underway

Many other companies see a future where hydrogen power makes sense and are investing sizeable sums of money in R&D.

Working in partnership with other companies, oil major BP has announced plans to develop a ‘green’ hydrogen project at its Lingen refinery in Germany with Ørsted; a BP-operated multi-company partnership to develop offshore infrastructure to support planned UK carbon capture, use and storage projects; and agreements to provide additional supplies of renewable energy to Amazon.

In BP’s Q4 earnings call, CEO Bernard Looney said:

“In terms of hydrogen and Carbon Capture and Storage (CCS), in terms of material parts of the company, you are really looking at 2030 plus. You are looking at that decade. We believe in hydrogen. The world needs CCS. We need to get after building these projects. We’ve got a hydrogen project in Ligen in refinery in Germany. We’re exploring many different options in this space. It is definitely a gas fuel of the future, there is no question about that, but it’s not something that’s going to happen overnight in terms of being a material part of BP’s portfolio.”

Meanwhile, Saudi Arabia is offering to transport “green” hydrogen by pipeline to Europe.

Saudi Energy Minister, Prince Abdul Aziz bin Salman, said:

“If Europe would like to buy more hydrogen, Saudi green hydrogen, we would be more than happy, and, if the economics allow for it, even piping it all the way to somewhere in Europe,”

US electric vehicle company Nikola plans to make hydrogen lorries, as does Hyundai. Meanwhile, Hyundai is also working with fuel firm Ineos to create a hydrogen-powered Grenadier off-roader 4X4 vehicle.

Then there’s Clean Power Capital Corp. (CSE: MOVE, FWB:2K6, OTC: MOTNF) which wants to build hydrogen-powered fuelling stations attached to existing petrol stations throughout the USA. This will go a long way to solving the ease of charging problems currently facing hydrogen-powered cars.

Hydrogen is way more environmentally friendly than some existing power solutions; harnessing its capabilities is the tricky part. But in this innovative world we live in, technological advances are happening at a record pace, and the world of hydrogen power is coming on leaps and bounds. It’s an exciting investment area to keep an eye on.


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Author: Kirsteen Mackay

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.

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