The Hydrogen Economy: Reality And Hype

Source: Roger Conrad · FORBES · | December 19, 2021

Source: Hydrogen Storage in Renewable Energy GETTY

It’s been more than four decades since the Hindenburg disaster slammed the brakes on the era of hydrogen-fueled dirigibles. But nature’s lightest element continues to capture the world’s imagination as a clean, plentiful and potentially cheap energy source.

Hydrogen’s current burst of popularity is the result of global action to combat climate change. Solar panels, wind turbines, batteries and electric vehicles can provide carbon emissions-free sources for generating electricity and fueling most transport. But they’re not close to powering furnaces hot enough for major industrial processes like manufacturing steel.

Hydrogen also offers a potential emissions-free solution for running household appliances, such as providing natural gas-level heat for cooking and furnaces. And hydrogen fuel cells have potential to move heavy industrial equipment, trucking fleets and ships at a competitive cost as well. 

The key questions for investors are:

• Can the cost of hydrogen be reduced enough to match up to fossil fuels, how will that take and what’s the risk competing technology will derail its rise, as has happened with every previous cycle of hydrogen hype?

• What companies potentially benefiting from hydrogen development can be purchased now at good entry points?