Hydrogen Economy Q3 Earnings Recap

COST CUTTING & REDUCING CAPEX WERE PREVALENT THEMES

In Q3 Ballard Power announced a global restructuring that would encompass a 30% reduction in operating expenses, deferring construction of a new factory in Texas and restructuring of its Weichai JV in China. Nel is holding off on its Michigan plant that has already secured subsidies for construction. Enapter is focusing on membrane production and is outsourcing electrolyzer assembly. Regarding plans to put its Texas green hydrogen plant on hold, Air Products CEO Seifi Ghasemi commented on his earning call that, “…in the future, we are not going to announce a project without having…a clear view of who will take 50%, 60% of the product on a long-term basis.” Plug Power has elevated 2025 gross margin breakeven to top priority through OpEx reductions, price increases and more proprietary hydrogen production.

EVEN STILL, THE CLEAN H2 COMMERICAL LANDSCAPE TOOK IMPORTANT STEPS FORWARD

While the hydrogen economy is still far from self-sustaining, a steady stream of landmark transactions and critical milestones shows hydrogen companies are offering distinctive decarbonization strategies that have potential to evolve into successful businesses. PowerCell Sweden announced its largest maritime fuel cell contract ever to power cruise ships while at dock. Ceres Power announced its 3rd and 4th licensing deals with large, high quality global manufacturing enterprises. ExxonMobil’s Baytown 1mtpa blue ammonia plant attracted significant minority investment commitments from ADNOC and Mitsubishi. Siemens Energy and ITM Power received electrolyzer orders in Germany totaling 480MW. NFI and Ballard Power received an order to supply 100+ fuel cell buses to San Mateo, CA and Korea reached 1,000 hydrogen buses in operation.

FUEL CELLS ARE GAINING TRACTION AS A SOLUTION FOR THE GROWING GLOBAL ENERGY DEFICIT

In conjunction with Q3 earnings, Bloom announced two deals that particularly highlight how fuel cells can be deployed to relieve strain on electric grids. In one case, Bloom is building an islanded microgrid to power Quanta Computer’s electronics equipment factory in Fremont. In another case, Bloom fuel cells will be strategically deployed by a CA utility to meet the power needs of a narrowly targeted cluster of companies. Although the feedstock for these fuel cells may not be clean hydrogen initially, the ability to shift to clean hydrogen appears to have been an important consideration in the customers’ purchase decision. In another variation of the theme, Stef will deploy Plug Power’s hydrogen forklifts at warehouses to save grid energy for refrigeration among other considerations.