Open ResearchFree Access Reports
Below we share publications that are open to download and read, free of charge.
The adherence to additionality, temporal, and geographic standards, suggested in the recent IRS 45V tax code leak, means higher-priced green hydrogen based on higher-cost power and a slow rollout.
While the tax code aligns with IRA objectives in a broader sense, it will increase focus on electrolyzer efficiency and push solid oxide technology (Bloom), especially where projects have waste heat.
Less efficient technologies, Alkaline and PEM, should see demand fall because of higher operating costs, increasing financial problems for its primary equipment producers, and possible bankruptcy.
Lower cost high capacity-factor power will be critical to get full credits, and the run of river power idea pursued by Issaquena Green Power (IGP) could drive substantial green hydrogen investment along fast-flowing rivers. (Note that C-MACC’s Graham Copley and Cooley May are partial owners of IGP.)
We had other plans for this report, but the Plug Power release on Friday commands “front page” analysis, as the implications for others could be severe.
Absent stimulus for hydrogen spending, which looks unlikely, Plug will probably fail, as an acquirer would be purchasing too many liabilities this side of Chapter 11.
This could ripple through the hydrogen and other emerging technology markets, making already hard-to-find public market funding more scarce/expensive.
No one is making money in the West making electrolyzers today, but we see a new entrant almost weekly. This setting is reminiscent of the EV industry 2 years ago, which has not ended well for many.
What worked for Tesla and BYD was the rapid economies scale that others are struggling to match as the early EV adopters are largely satisfied – hydrogen evolution is not allowing for scale gains, so far.
While we see plenty of agreements to deploy electrolyzers, not many are past the investment decision post yet, and the orders are spread out with no clear volume winners but some losers.
While Plug Power is probably making more noise than most and appears to have plenty of orders, the stock market does not like the story any more than any of the other suppliers.
We note several better-capitalized established equipment suppliers in the mix and wonder whether they will be the ultimate winners, with the independents either acquired or failing.
Feedback from Pack Expo and CMA’s WCF: So Many Moving Parts – Some Moving The Wrong Way and Some Not Moving Fast Enough
In plenty of prior research, we have focused on the coincident challenges that the chemical industry faces with an expensive need to decarbonize at the same time that cash flows are collapsing, and the message was rammed home clearly at the CMA conference, while the feedback from Pack Expo was that all are interested in a more sustainable solution, but not at any cost.
The CMA World Chemical Forum (WCF) is a timely, vital event for followers of chemicals and associated industries – its benefits are beyond our hydrogen panel.
Aside from the debate about transition, carbon, hydrogen, etc., the chemical industry faces many troubles, requiring strategy reviews less urgent 6 months ago.
The debates and panels at WCF will be valuable for many – our daily research at C-MACC shows rising structural and cyclical global chemical industry challenges.
Do the UK pension funds attacking Shell and bp risk giving life to an anti-woke/anti-ESG movement in Europe? When bp announced its change in strategy and its plan to increase spending on traditional oil and gas, its stock rose over 8%. As we have noted in extensive prior research, the multiple of earnings being given to European integrated oil companies appears to be inversely correlated with the degree of portfolio transformation promised. Investors are not nearly as interested in transformation stories as they are the cash flows from oil and gas – or so it would appear.