As the devastating potential impacts of climate change become increasingly obvious, many are turning away from fossil fuels to power their vehicles and looking for alternatives.
The answer may lie in the hydrogen industry, which is projected to generate $2.5 trillion in revenue by 2050 and to provide hard competition to Elon Musk’s Tesla-produced electric cars.
A team at the Fraunhofer Institute for Manufacturing Technology and Advanced Materials IFAM in Germany has now developed a hydrogen paste, POWERPASTE, that may be easier to use especially in smaller vehicles.
However, they were too expensive for the consumer market at over $9,000 per bike and $36,000 for a charging station.
POWERPASTE might be able to solve that problem, with the substance created from magnesium base and stored in the vehicle in the form of a cartridge.
All drivers need to do to refuel is swap out the old cartridge for a new one and fill a tank with water.
“POWERPASTE stores hydrogen in a chemical form at room temperature and atmospheric pressure to be then released on demand,” institute research associate Dr. Marcus Vogt said in a press release.
As the paste only begins to decompose at temperatures of around 480 degrees Fahrenheit, researchers said drivers didn’t need to worry about leaving their vehicles out in the hot sun.
Jeff Bezos and Bill Gates have already backed the startup ZeroAvia.
“POWERPASTE… has a huge energy storage density,” said Vogt. “It is substantially higher than that of a 700 bar high-pressure tank. And compared to batteries, it has ten times the energy storage density.”
The researchers also pointed out that the range of the paste can be compared with gasoline and may even exceed it.
They suggested that this could make it a viable option for cars or in portable fuel cells on camping trips, and could significantly extend the possibilities of drone usage.
The hydrogen industry looks set to grow significantly in the coming years.
Jeff Bezos and Bill Gates have already backed the startup ZeroAvia, which is developing hydrogen-powered flights.
In 2016, Germany invested $265 million in hydrogen cars and with the rise of viable alternatives, other countries may now follow suit.
The institute is now building a pilot plant at the Fraunhofer Project Center for Energy Storage and Systems in the German city of Braunschweig.
Scheduled to open later this year, they estimate an annual production capacity of four tonnes of POWERPASTE.
Last week saw some game-changing events for the cryptocurrency market, which pushed the prices of bitcoin, ether and others to record highs. Meanwhile, on the commodities front, a broad sweep higher in raw materials prices has got market-watchers pondering if we are on the verge of a new super-cycle. This coming week may reveal if big investors are buying into crypto, as well as the resilience of star precious metal, platinum.
Bitcoin to the moon… and beyond
Bitcoin hit a record of nearly $50,000 last week and this time around, it wasn’t a motley crew of amateur traders organizing an effort to squeeze the price higher. Elon Musk, a long-time advocate of cryptocurrencies and of bitcoin, in particular, had already ignited a frenzy in “meme crypto” Dogecoin.
But it was Tesla – the electric vehicle maker he founded and runs – unveiling a $1.5-billion purchase of bitcoin that fueled this latest leg higher. Tesla said it would also consider allowing customers to pay using the digital token, possibly opening the floodgates to other large companies to do the same.
Online payment groups like PayPal and Square already allow users to buy and sell with crypto. Last week, Mastercard joined their ranks and said it would allow the use of some cryptocurrencies on its network.
RBC suggested Apple could be the next big corporation to adopt bitcoin, and the CFO of Twitter told CNBC on Wednesday that it too could buy the token. But bitcoin isn’t ready to go mainstream, according to the world’s biggest asset manager, UBS. And Treasury Secretary Janet Yellen has, again, voiced reservations about cryptocurrencies in general, saying their use in online crime and for money laundering is growing.
BlackRock, the world’s biggest fund manager, last month said it would allow two of its funds to invest in bitcoin futures. So who’s next?
This week could bring the answer to that question, when Wall Street’s big guns report how they invested their money in the final three months of 2020.
“Hey big spender” – how the funds spent their funds
This coming week, the biggest US investors will release details of what they put money into -and sold off – in the fourth quarter of 2020. The so-called 13-F filings with the Securities and Exchange Commission offer a breakdown of the holdings at the end of December of any fund with more than $100 million under management.
However, in the wake of the GameStop short-squeeze in January, anyone hoping to get a look at what stocks the funds are betting against will be disappointed. A 13-F filing contains long positions only, along with a fund’s options holdings, convertible notes and American Depository Receipts (ADRs) – or holdings of US-listed stock of foreign companies. But no short positions.
Even so, most investors – professional and amateur – scour the 13-Fs to see what the “smart money” did last quarter. Warren Buffett, “Big Short” investor Michael Burry – who must be one of the lone Tesla shorts standing -, Ray Dalio, David Einhorn, Seth Klarman and Ryan Cohen will all release details of what they bought and sold.
The price of platinum rocketed by 15% to above $1,200 an ounce its highest in over six years last week, driven by a heady cocktail of a weaker dollar and a broad investor push into commodities and making it the best-performing raw material of the past week. It scorched past crude oil, copper and lumber and is on track to top the charts for the month of February.
Until around last March, in the depths of the coronavirus crisis, platinum had been on a long, painful downtrend. Aside from its use in jewellery, platinum’s main industrial use was in the catalytic converters of diesel-powered vehicles. The diesel-emissions scandal, which led to a drastic drop in sales of diesel vehicles and several punitive measures aimed to reduce the number of them on the roads, has eaten into platinum demand – so much so that for the past six years it has been worth less than gold, despite being far more scarce.
As the world transitions to using cleaner sources of energy and cutting emissions, several commodities are emerging as being central to this effort, platinum being one of them.
Platinum, together with iridium, is used as a catalyst in proton exchange membrane electrolysis – used to extract hydrogen from water as a source of zero-emissions sustainable fuel.
Johnson Matthey, the world’s largest refiner of platinum group metals, said in a report on February 10 the global platinum market ran a deficit for the second year in a row in 2020. It looks likely to see a shortfall again this year.
“The move towards an expected supply deficit is occurring at a time of increased focus on tightening emission regulation in regular combustion engines while accelerating green hydrogen production has increased demand for platinum-based electrolyser capacity,” Saxo Bank head of commodity strategy Ole Hansen said in a note last week.
“Having been in a downtrend for nearly a decade, platinum’s breakout last November helped attract renewed investment demand, not least after gold hit $2000/oz and its premium to platinum rose above $1000/oz. These developments helped attract increased switching activity between the two metals,” Hansen said.
Chart of the week – pot luck
Last week, cannabis stocks went parabolic, driven by double-digit percentage rallies in the likes of Aphria, Tilray and Sundial Growers. Joe Biden’s victory in the presidential election and Democrat promises to decriminalize cannabis have given a number of investors, including the Reddit traders, reason to pile in. Cannabis was the top-performing investment theme last week, according to broker CMC Markets’ Global Thematic ETF screening too, with a gain of nearly 40%, compared to runner-up uranium, with a 11% increase.
Relative performance of the ETFMG Alternative Harvest ETF vs S&P 500.
Save the date! We’re hosting a virtual roundtable about building a clean energy economy on the morning of March 8. More on that below.
It snowed a lot this week. My dog lost his mind. Now, like all good things, the snow has turned to brown slush.
Also this week, several top oil companies reported earnings, giving us a more complete picture of the financial fallout from the pandemic. There were no major surprises, but the negative numbers are big.
We’ll get to that, but first: A look at an early winner of the hydrogen boom.
ZeroAvia is developing a powertrain for planes powered on hydrogen fuel cells
When hydrogen gas inside the Hindenburg exploded in 1937, the era of airship travel came to an end. Now the very same gas is reentering the aviation industry. And this time it’s kicking off a new era – one of zero-carbon travel.
This week:I profiled ZeroAvia, an ambitious startup working on hydrogen-powered aircraft. It recently raised money from huge names including Amazon, Shell Ventures, and Bill Gates’ climate tech venture fund, Breakthrough Energy Ventures.
We chatted with ZeroAvia’s founder about how he convinced investors to bet on a risky tech, and why hydrogen is the aviation fuel to beat. Some experts say they agree.
Hydrogen’s moment: Is right now. The gas is quickly building a reputation as a linchpin in the transition to cleaner energy, and investors are now looking for where to place their bets. Some aren’t having much luck.
“We look aggressively,” Vinod Khosla, founder of Khosla Ventures, told me last fall. “We haven’t found somebody with breakthrough technology. There’s a lot of incremental technologies there, but nobody has a real breakthrough. If you find one, have them call me.”
Investors we spoke to say hydrogen used for aviation, heavy-duty vehicles, and industrial processes, such as steelmaking, is most promising.
Chevron’s deal to buy Noble Energy for $5 billion would come with redundancies, the company said.
Justin Sullivan/Getty Images
Big losses for Big Oil
The results are in: Major oil companies, surprising no one, suffered steep financial losses in 2020.
One big number: $56 billion
That’s the combined full-year loss of five of the top companies including Exxon, Chevron, BP, Shell, and ConocoPhillips. Exxon and Shell topped the list.
Last year, these firms earned about that same amount, combined.
Only up to go? Probably, at least until demand for oil and gas begins a more permanent decline.
The price of oil is rising fast as demand notches up. Brent is trading at close to $60 a barrel, erasing year-over-year losses.
Companies spent 2020 lowering the cost of production, so they’re positioned to succeed even if oil prices don’t go much higher.
But: We have a new president who’s pushing clean energy and major companies are setting targets to reduce their reliance on fossil fuels.
The “decarbonization newsflow,” as Goldman Sachs put it in a recent note, is souring investor sentiment in oil and gas companies.
Among the news that investors see as downside risk is litigation surrounding pipelines and GM’s announcement that it will phase out gas-powered cars.
That’s “widened the gap in sentiment between clean energy and traditional energy,” Goldman Sachs analysts wrote. Residential solar is most in favor, they said.
What to know: The unit, which Exxon launched after investors pressed the company to move faster to address climate change, will initially focus on carbon capture and storage.
No surprises here: Exxon has been developing carbon capture projects for a while now.
The technology is attractive to oil companies in part because it doesn’t require that they rewrite their business models and pump less crude from the ground.
How investors responded: They were nonplussed.
A coalition of investors with over $2.2 trillion in assets said Exxon’s plan to build out carbon capture capabilities isn’t credible, pointing to a carbon-capture project that the company delayed.
Activist investor Engine No. 1 had a similar reaction: It’s “poor long-term planning to rely almost exclusively on the idea that carbon capture will become scalable and affordable soon enough to allow for continued oil and gas production growth for decades to come under a Paris-compliant trajectory,” the group said.
But investors aren’t jumping ship: The company’s stock is up 10% this week and 20% since the start of the year.
What’s more: Exxon also announced a new board member this week – Tan Sri Wan Zulkiflee Wan Ariffin, former CEO of the Malaysian state energy company Petronas.
A board shake-up is another demand from activist investors.
Hedge fund DE Shaw had been in talks with Exxon about making changes to its board, Bloomberg reported ahead of the announcement. Engine No. 1 has also launched a campaign to elect four new directors.
On Thursday Bloomberg reported that the company is considering also appointing Jeff Ubben, who runs Inclusive Capital Partners, to the board.
Former Michigan Governor Jennifer Granholm is Joe Biden’s pick for energy secretary.
Michael Brochstein/SOPA Images/LightRocket via Getty Images
5 things in energy politics
Jennifer Granholm’s nomination as Energy Secretary cleared a key Senate committee and now advances to the full Senate, where she is expected to be confirmed.
A new report by left-leaning groups Evergreen Action and Data for Progress reveals how Senate Democrats can clean up the electric grid by 2035, even with a razor-thin majority.
Senate Democrats reintroduced legislation for a $100 billion national “green bank.” It would make loans and investments in technologies aligned with Biden’s climate agenda, Greentech Media reported.
Agriculture Secretary nominee Tom Vilsack said that he plans to prioritize efforts to address climate change and food insecurity, during his confirmation hearing on Tuesday, Insider’s Ayelet Sheffey reports.
Senator Gary Peters, a Michigan Democrat who advocates for strong climate change policy, recently invested up to $15,000 in a power company that primarily burns fossil fuels, according to a stock purchase disclosure, Insider’s Dave Levinthal reports.
Save the date: Building a clean-energy economy
We’re hosting a virtual roundtable, as part of our Transformers series, on how to build a clean energy economy. Save the date!
When: March 8, at 10:00 am (NYC time)
Where: Online, of course. We’ll send out more information next week.
Who: The roundtable will feature Shell’s head of new energies, the founder of Form Energy, Facebook’s renewable energy lead, and Oliver Wyman’s head of energy.
That’s it! Have a great weekend.
– Benji
Ps. This was a serious storm. Here’s what it looked like in Park Slope.
