Hydrogen: Energy source of the future with potential for investors

Hydrogen could deliver on the promise of carbon-neutral, readily available and widely deployable "green energy" and thus be key to the successful decarbonization of the economy. However, for the energy transformation of the century to succeed, a future-proof hydrogen infrastructure must first be established. These are the key findings of the study "Hydrogen as an Energy Source of the Future - Fundamentals, Concepts and Potential Applications", published by the FERI Cognitive Finance Institute together with the Laboratory for Hydrogen and Fuel Cell Technology of the Department of Engineering at RheinMain University of Applied Sciences. In doing so, the study addresses the key scientific, economic, political as well as geopolitical issues surrounding the topic and provides a classification regarding the potential for investors. "Hydrogen will increasingly assume a systemic role in industrialized countries and holds enormous opportunities for Germany as well. As massive investments and strong growth are expected in this area, hydrogen is one of the most exciting capital market topics of the future," says Dr. Heinz-Werner Rapp, founder and head of the FERI Cognitive Finance Institute.

Green hydrogen as a beacon of hope

Because of its many possible applications, hydrogen is the ideal energy carrier for a climate-neutral economy, he says: "Hydrogen can be used as a temporary storage medium for electricity generated from the sun and wind power, and in combination with fuel cells it can decarbonize transportation. The long-term goal is to switch to climate-neutral green hydrogen, which is produced entirely using renewable energies," explains Prof. Dr. Birgit Scheppat, Professor of Hydrogen and Fuel Cell Technology at RheinMain University of Applied Sciences and co-author of the study. Although the established processes for hydrogen production cannot do without fossil fuels and therefore produce greenhouse gases in the form of carbon dioxide and methane, they should not be abandoned for the time being, she says. Until green technologies and capacities could meet the growing demand for hydrogen, all hydrogen sources available today would be needed for a transitional period, the study said.

Germany dependent on hydrogen imports

The strategic framework for the energy transition using hydrogen has already been defined internationally. With its Hydrogen Roadmap Europe, the EU has paved the way for the large-scale use of hydrogen. Lighthouse projects in cities such as Rotterdam, Hamburg, Bordeaux and Marseille are the first steps towards a long-term rollout of the technology in Europe. In Germany, the German government's "National Hydrogen Strategy" should make green hydrogen more economical than fossil fuels, which are still cheaper. However, countries like Germany are not in a position to secure their basic supply of climate-neutral electricity entirely from domestic renewable energy sources and are therefore dependent on extensive imports for a longer period of time. Wind- and sun-rich countries in North Africa and the Middle East could be considered as energy suppliers. However, there is a risk that a global distribution race for green energy could replace the "battle for oil. Whether and to what extent this factor will affect the European hydrogen strategy cannot yet be predicted, according to the study.

Prospects for investors

The project of the century to decarbonize the global economy brings with it a variety of attractive investment themes. In addition to specialized manufacturers of electrolysers and fuel cells, potential winners include plant manufacturers, companies in the solar energy and wind power sectors, operators of gas grids or tanker fleets, technical system integrators and providers of novel mobility concepts. "The emerging hydrogen industry offers diverse and attractive investment themes. However, investors should always keep an eye on the political framework conditions and also consider the risk of 'hype cycles', i.e. temporary euphoric overestimation of future growth prospects," adds Dr. Heinz-Werner Rapp.

The German study "Hydrogen as an energy source of the future - fundamentals, concepts and potential applications" is available for download here .