A well structured and thought out post from Guillaume Lesueur on the challenges and opportunities for financing the hydrogen sector. It's very clear to us at Hypermotive that the customers' of our customers (those buying, managing and operating the fleets of end-user equipment such as trucks, ships, industrial equipment and trains) have a high degree of uncertainty about the switch to hydrogen and clean technologies, and hence we are having to behave as much more than a traditional supplier.
We find ourselves in a new role of commercial operation, reaching far outside our direct relationship to our customer to support their, and their customer’s journeys into hydrogen and zero emissions. We are open and honest with guidance – where other technologies that are cheaper, more efficient and simpler work, such as batteries, use those. We only want to work with customers who really need our services, not just because we think we can sell something to them.
We also find ourselves having to create networks, collectives and collaborative partnerships across the hydrogen value chain, so we can offer to those same customers the complete package they need to implement such new technologies with minimal risk.
It’s fundamentally a new way of doing business. The singular, transactional approach of the past, such as selling an engine to an equipment manufacturer, are gone. We need to be far more holistic in our offer, where there is currently such confusion in the market and a conflicting array of voices all creating uncertainty and doubt in those wishing to change, and those wishing to invest in that change.
This comes back to the point above – only those applications where hydrogen is the optimal choice should it be the choice made, which is not necessarily restricted to the equipment itself, but must be considered within the context of the wider system and environment of operations across many facets. It is not an easy decision process, in fact, quite the reverse, it is incredibly complex and nuanced, which is why it is up to us, those deeply embedded in these sectors, to share the knowledge and guide open and honestly towards supporting the best decisions we can make with the information available.
All this must also be made with the awareness of all parties that technologies and developing at an ever increasing rate, the optimal solution today may not be the same in 20, 10 or even 5 years' time, but we must also not continually delay for the 'perfect' answer, as the scene will be ever changing too at that point in the future when we thought we'd have an answer. Again, it's all about supporting each other to make the best decisions with the information available, which will reduce risk, protect assets and investments, along with our society and planet around us.
#hydrogen #complexity #decision #greeninvestment #investment
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A week ago, I attended the Hydroverse Convention in Essen, Germany, dedicated to innovation in hydrogen, and I participated to the “Push & Pull: Stimulating and Financing the H2 Economy to Catalyse Growth” panel alongside Juergen Groenner from Westnetz and Thomas Hüwener representing OGE who provided great insights on their concrete developments for a European hydrogen infrastruture.
I took this opportunity to deliver a few key messages on the hydrogen equipment market, notably :
1.
As it is not questionable that:
- hydrogen is needed to decarbonize a significant part of the economy (har-to-abate sectors first)
- the estimated hydrogen market opportunity is massive - the equipment sector alone is expected to reach USD 190bn by 2030
therefore the current market is a great market to be in from an investor standpoint : lower valuations, ability to be highly selective, huge potential for value creation within our strong ecosystem.
2.
At Hy24, we are investing in the development of the low-carbon hydrogen economy, deploying strategic approaches focused on hydrogen project developers and hydrogen equipment manufacturers. This is quite obvious but our priorities are to target:
➡ activities that can capture important public support (carrots!), like production of green hydrogen for instance.
➡ activities that are psuhed forward by regulatory constraints that stimulate demand (sticks!), as is the case with the Sustainable Aviation Fuels (SAF) market for instance.
➡ activities that have viable economics on their own (limited carrots or sticks!) thanks to the existence of a solid offtake and a green premium which is very diluted in the sale price of the final transformed product - as seen in the green steel market for instance.
3.
In the hydrogen market, financial investors have a crucial role in aggregating co-investors, unlocking subsidies, and enhancing project bankability. This pivotal role is precisely what we embody at Hy24 with our infrastructure and equipment funds.
Congratulations to the entire H2UB team for delivering such a great event 😍: great attendees, great organization, great debates, great innovating companies... Looking forward to next year!
Thanks so much for your invitation!
#HydrogenEconomy #SustainableInvestment #Decarbonization #Hy24
Jorgo Chatzimarkakis Uwe Kerkmann Moritz T. Glettenberg Carolin Nickel Aleksandra Policha Lebrethon Pierre-Etienne Franc Laurent Fayollas Amir Sharifi Nicolas Brahy Sebastien Paillat Lynn Hochard Raphaëlle Muhlmann-Eytan Meriem Benhassine Fuertes
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CEO at TERRABARRIER
7moThis is a remarkable accomplishment by the entire Terrabarrier team. I am extremely grateful to work with such a competent and fun team, whose deep commitment is driving our success story.