It seems like every ten years there's another speculative mania about alternative energy. In the '90s and early '00s, there were solar panels. That one ended badly, with Chinese competition crushing many US darlings. Then there were electric cars. Most of them also failed, but Tesla turned out great, possibly due to it leveraging silicon valley techniques to things like battery packs (and of course, Mr. Musk). There was also a fuel cell mania six years ago.
Right now, fuel cells are getting a second wind, under the name of the hydrogen economy. In the past year, Ballard Power Systems (BLDP) has quintupled; McPhy Energy (OTCPK:MPHYF) has gone up 5.5 times. And of course, every millennial investor knows about Nicola Corp. (NKLA)
The purpose of this article is to explain the hydrogen economy and to explain how I am investing in it. This will be longer than my typical article, and it's in two sections. The first will cover the general situation, and the next will go into my specific trade. The article will be somewhat technical, so a little chemistry background will help.
The great unsolved problem in sustainable energy is storage. The technology exists to produce great amounts of power by intermittent sources like solar and wind. But without a way to store the energy, there is a mismatch between when the power is produced and when it is needed. This is one of the virtues of battery electric vehicles (BEV); they can be recharged overnight when normal demand is low.
Another way of storing energy is using hydrogen. Here green power is used to produce hydrogen. The hydrogen is then shipped and stored in various well-known ways. Finally, it can be used to provide power via fuel cells or heat engines. The exhaust is just water.
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