Bill Gate's Green Energy Consortium Proves Hydro Stock Resilience

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As more countries struggle to cope with floods, wildfires, landslides, and other natural disasters exacerbated by human behavior, the global debate continues about how to tackle climate change, and interest in green hydrogen stocks grows stronger.

Governments are directing investment and enacting policies to advance the green hydrogen movement, hydrogen companies are closing deals, and investors excited about disruptive industries and new technologies are jumping on the bandwagon, creating a wave of momentum in green hydro stocks. And one stock, in particular, the next-gen hydrogen ETF from Defiance has attracted attention for its inclusion in some of the most dynamic green energy companies.

Green Hydrogen Production Continues to Grow

September brought a collection of new deals aiming to increase green hydrogen production. Siemens Energy signed a Memorandum of Understanding (MOU) with KOGAS, one of the world's largest LNG-importing companies, towards expanding South Korea's green hydrogen capabilities. The companies will collaborate on green hydrogen projects, including developing hydrogen turbines, research into overseas green hydrogen production and transport strategies, and large-scale domestic green hydro power production.¹

Green hydrogen innovator Plug Power revealed that it's planning to build the biggest green hydrogen facility on the west coast of the US. The complex will include a 300MW solar farm to power 120MW of Plug Power's electrolyzers and produce 30 metric tonnes of liquid green hydrogen per day. Plug Power hopes the plant will come on line by 2024.²

Meanwhile, French energy company HDF Energy is beginning construction in French Guiana on the world’s first multi-megawatt hydrogen power plant, intended to be capable of producing 128MWh³, and UK-based oil and gas developer Chariot Ltd secured exclusive rights to develop Project Nour, a green hydrogen project of up to 10GW in Mauritania.⁴

New Hydro Deals Show Advances in Decarbonization

An announcement by Strike Energy in Australia showed progress in using green hydrogen to decarbonize industry. Strike plans to use geothermal energy to power a 10MW hydrogen electrolyzer at their urea fertilizer production plant, which is expected to produce 2% of the plant's hydrogen feedstock. Although it's still a small fraction of the company's energy needs, it blazes a trail for cleaning up one of the world's highest-polluting industrial sectors.⁵

Also in Australia, fuel giant BP Plc announced that it was conducting a joint feasibility study with Australia's Macquarie Group into the production of green hydrogen in Western Australia. If successful, the company will go on to build a large-scale hydrogen electrolyzer to serve local industries and help further Australia's decarbonization goals.⁶

As well as decarbonizing industry, new deals are also pushing progress in cleaning up transportation. One of the biggest headlines surrounded a new agreement signed by electric truck manufacturers Nikola Corp to build Bosch hydrogen fuel cells at its Arizona plant,⁷ demonstrating the ongoing strength of green hydrogen to power clean transportation.

Hydrogen Investors Jostle to Invest in Hydrogen

The proliferation of deals between green hydro companies hasn't escaped the notice of big investors. In the UK, mega entrepreneur Jo Bamford established Hycap, a hydrogen investment fund that aims to raise £1 billion ($1.36 billion) for clean energy. 20%-40% of the fund will go on hydrogen production, and the group also intends to invest in hydrogen refueling stations. Bamford says he expects to attract many investors, including pension funds with ESG mandates and other private family offices that want to help decarbonize the economy.⁸

In India, the country's two richest men are battling it out to lead investment in hydrogen companies' stocks. In June, Mukesh Ambani announced that he would sink the equivalent of $10 billion into clean power and hydrogen fuel over the next 3 years. Just 3 months later, his rival and fellow billionaire Gautam Adani declared that his India–Adani Group would invest $20 billion into renewable energy generation and component manufacturing over the next 10 years.⁹

Seven leading businesses in the US, including the prestigious Boston Consulting Group (BCG), have joined forces to establish Breakthrough Energy Catalyst, with the aim of accelerating development of climate-smart technologies. Green hydrogen is one of the 4 key focus areas for the consortium. “This new partnership with some of the world’s leading corporations will be critical to unlocking the potential to find, fund, and scale innovative technology solutions. These solutions are essential to closing the gap to vital climate targets," said Bill Gates, the founder of Catalyst's parent body Breakthrough Energy.¹⁰

Additionally, in Europe the private investment house Ardian and FiveT Hydrogen has created Hy241, an investment platform focused on the best hydrogen stocks in clean hydrogen infrastructure. The venture has a target of €1.5 billion ($1.7 billion), and a group of leading industrial and financial investors has already committed €800 million ($930 million).¹¹

Government Bodies are Walking the Walk

As well as announcing policies to encourage green hydrogen and expressing their support for clean energy, governments and municipalities are racing to invest in hydrogen. In Germany, a number of projects have received government funding, with €80 million earmarked for Fraunhofer-Gesellschaft’s National Action Plan for Fuel Cell Production,¹² €55 million for the world's first industrial scale hydrogen-based steel plant,¹³ and €34 million for the Bad Lauchstädt Energy Park, intended as a  “real laboratory for energy transition.^14" Additionally, the government is auctioning off sites in the North Sea for green hydro production.¹⁵

The UK's green hydrogen vision includes £105 million of funding for the country's low carbon hydrogen economy, aiming to produce 5GW of hydrogen power by 2030.¹⁶ In the US, President Biden's Infrastructure Bill includes $100 billion for clean energy, including green hydrogen,¹⁷ while the city of New York is investing $8.5 million to convert a gas-fired power plant to run on green hydrogen.¹⁸

India is making a big bid for green hydro, hoping to position itself as a leader in green energy efforts. The government announced plans to invest the equivalent of $1.35 trillion into green hydrogen infrastructure schemes, and is working hard to encourage private companies to adopt green hydrogen power.¹⁹

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Investment in Green Hydrogen Could be just Beginning to Heat Up

Anyone who thought that producing a truly sustainable, emissions-free fuel in sufficient quantities was little more than science fiction is starting to question their assumptions and follow green hydrogen with greater interest. The pace of deals, investment, and government support for hydrogen is encouraging more people to consider investing in hydrogen companies' stock.

For investors who want to spread their risk across a number of promising hydro stocks, a hydro ETF like Defiance's HDRO offers a way to help balance a portfolio by offering a range of rising hydrogen stocks with a single investment.

Important Disclosures:

For HDRO holdings please click here.

The Funds' investment objectives, risks, charges, and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company. Please read carefully before investing. A hard copy of the prospectuses can be requested by calling 833.333.9383. 

Investing involves risk. Principal loss is possible. As an ETF, the fund may trade at a premium or discount to NAV. Shares of any ETF are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. The Fund is not actively managed and would not sell a security due to current or projected under performance unless that security is removed from the Index or is required upon a reconstitution of the Index. A portfolio concentrated in a single industry or country, may be subject to a higher degree of risk. Specifically, the Index (and as a result, the Fund) is expected to be concentrated in hydrogen and fuel cell companies. Such companies may depend largely on the availability of hydrogen gas, certain third-party key suppliers for components in their products, and a small number of customers for a significant portion of their business. The Fund is considered to be non-diversified, so it may invest more of its assets in the securities of a single issuer or a smaller number of issuers. Investments in foreign securities involve certain risks including risk of loss due to foreign currency fluctuations or to political or economic instability. This risk is magnified in emerging markets. Small and mid-cap companies are subject to greater and more unpredictable price changes than securities of large-cap companies.

The BlueStar Global Hydrogen & Next Gen Fuel Cell Index is the exclusive property and a trademark of BlueStar Global Investors LLC d/b/a BlueStar Indexes® and has been licensed for use for certain purposes by Defiance ETFs LLC. Products based on the Global Hydrogen & Next Gen Fuel Cell Index are not sponsored, endorsed, sold or promoted by BlueStar Global Investors, LLC or BlueStar Indexes®, and BlueStar Global Investors, LLC and BlueStar Indexes® makes no representation regarding the advisability of trading in such product(s).

HDRO is new with a limited operating history.

HDRO is distributed by Foreside Fund Services, LLC.

This post contains sponsored advertising content. This content is for informational purposes only and not intended to be investing advice.

¹"Siemens Energy and KOGAS Sign Mou to Collaborate on Green Hydrogen Projects" September 14, 2021 https://hydrogen-central.com/siemens-energy-kogas-mou-green-hydrogen-projects/ 

²"Major green hydrogen facility planned for California" 21 September, 2021

https://www.gasworld.com/major-green-hydrogen-facility-planned-for-california/2021755.article

³"HDF Energy Breaks Ground on World’s Largest Green Hydrogen-Power Project" September 29, 2021 https://www.businesswire.com/news/home/20210929005751/en/HDF-Energy-Breaks-Ground-on-World%E2%80%99s-Largest-Green-Hydrogen-Power-Project

⁴"New 10GW green hydrogen project in Mauritania could include Africa's first offshore wind farm" September 28, 2021 https://www.rechargenews.com/energy-transition/new-10gw-green-hydrogen-project-in-mauritania-could-include-africas-first-offshore-wind-farm/2-1-1074316

⁵"Geothermal to power green hydrogen production in Australia" September 15, 2021 https://www.thinkgeoenergy.com/geothermal-to-power-green-hydrogen-production-in-australia/

⁶"BP, Macquarie study green hydrogen hub concept in Western Australia" September 7, 2021 https://www.reuters.com/business/sustainable-business/bp-macquarie-study-green-hydrogen-hub-concept-western-australia-2021-09-07/

⁷"Nikola Announces Strategic Agreements with Bosch for Fuel-Cell Manufacturing" September 2, 2021 https://nikolamotor.com/press_releases/nikola-announces-strategic-agreements-with-bosch-for-fuel-cell-manufacturing-130

⁸"Entrepreneur Jo Bamford Gets Behind New £1 Billion Clean Energy Hydrogen Fund" September 6, 2021 https://hydrogen-central.com/jo-bamford-1-billion-clean-energy-hydrogen-fund/

⁹"India – Adani Group to Invest $20 Billion in Renewable Energy, Entering Green Hydrogen Production" September 22, 2021 https://hydrogen-central.com/india-adani-group-invest-20-billion-renewable-energy-green-hydrogen-production/

¹⁰"BCG Joins Breakthrough Energy Catalyst, Bill Gates Founded, to Invest in Latest Climate Technology, Including Hydrogen" September 20, 2021 https://hydrogen-central.com/bcg-breakthrough-energy-catalyst-bill-gates-climate-technology-hydrogen/

¹¹"Green hydrogen platform targets €1.5bn initial investment" October 1, 2021 https://renews.biz/72656/green-hydrogen-platform-targets-15bn-initial-investment/

¹²"BMVI Founding Fraunhofer with 80 Million Euros for Fuel Cell Production" September 20, 2021 https://hydrogen-central.com/bmvi-founding-fraunhofer-80-million-fuel-cell-production/

¹³"German Federal Government Commits its Intention to Provide €55 Million of Funding for ArcelorMittal Hydrogen DRI plant" September 9, 2021 https://hydrogen-central.com/german-government-e55-million-funding-arcelormittal-hydrogen-dri-plant/

¹⁴"Joint Hydrogen Project “Bad Lauchstädt Energy Park” Receives EUR 34M Funding Decision as “Real Laboratory for Energy Transition” in Germany" September 13, 2021 https://hydrogen-central.com/joint-hydrogen-project-bad-lauchstadt-energy-park-funding-energy-transition-germany/

¹⁵"Breaking: Germany Opening Offshore Areas for Green Hydrogen Production" October 1, 2021 https://www.offshorewind.biz/2021/10/01/breaking-germany-opening-offshore-areas-for-green-hydrogen-production/

¹⁶"UK government launches plan for a world-leading hydrogen economy" August 17, 2021 https://www.gov.uk/government/news/uk-government-launches-plan-for-a-world-leading-hydrogen-economy

¹⁷"Biden Details $2 Trillion Plan to Rebuild Infrastructure and Reshape the Economy" March 31, 2021 https://www.nytimes.com/2021/03/31/business/economy/biden-infrastructure-plan.html

¹⁸"New York to test green hydrogen at Long Island power plant" July 12, 2021 https://www.utilitydive.com/news/new-york-to-test-green-hydrogen-at-long-island-power-plant/603130/

¹⁹"India’s new green hydrogen mission to boost energy independence" August 17, 2021 https://www.powerengineeringint.com/hydrogen/indias-new-green-hydrogen-mission-to-boost-energy-independence/