Best Investments: Hydrogenics Corp: Parts water

The server was unable to process the request due to an internal error. For more information about the error, either turn on IncludeExceptionDetailInFaults (either from ServiceBehaviorAttribute or from the configuration behavior) on the server in order to send the exception information back to the client, or turn on tracing as per the Microsoft .NET Framework 3.0 SDK documentation and inspect the server trace logs.
The server was unable to process the request due to an internal error. For more information about the error, either turn on IncludeExceptionDetailInFaults (either from ServiceBehaviorAttribute or from the configuration behavior) on the server in order to send the exception information back to the client, or turn on tracing as per the Microsoft .NET Framework 3.0 SDK documentation and inspect the server trace logs.
Hydrogenics Corp: Splitting Water | Alternative Energy Stocks

« Alternative Energy and Climate Change Mutual Funds, Part II | Main | Valuation Primer For Energy Storage Companies – Lesson #2 »

Hydrogenics Corp: Splitting Water by DebraFiakas, CFA

Mostinvestors, if they have heard of HydrogenicsCorporation (HYGS:Nasdaq)at all, consider them a fuel cell producer. However, abouttwo-thirds of the company’s revenue comes from the design andmanufacture of hydrogen generation products based on waterelectrolysis technology - a somewhat unique, but valuableelectrochemical technology that could make important contributions tothe world’s future energy base.

Electrolysisor the splitting of water molecules using an electric currentproduces hydrogen and oxygen - two elements that have marketpotential in a variety of industrial and power markets. It stands inhigh contrast to other producers of hydrogen that begin with naturalgas and rely on the so-called steam reforming process to producehydrogen from the natural gas components.

Hydrogenicsexpanded its production of hydrogen and oxygen gases with theacquisition of Stuart Energy Systems in January 2005. The companynow manufactures the HyStatElectrolyser for on-site or on-demand hydrogen and oxygen supplies.Hydrogenicsclaims they “know hydrogen and know it well,” a talent that putsthem in a good competitive position in the renewable energy field.

Thecompany is applying that considerable knowledge to the production offuel cells which convert hydrogen and oxygen back into water toproduce energy. In 2009, power products and services accounted forabout a third of the company’s revenue. We expect that portion toshift higher over time as Hydrogenics’ fuel cell products penetratethe market. So far Hydrogenics has focused on the forklift,commercial fleet and urban transit bus markets with its fuel cells.

Whyall the fuss about hydrogen? First of all hydrogen is estimated tohold almost three times as much energy as natural gas per pound. Second, itsonly emission is pure water.

Whyall the foot dragging about hydrogen? It is not really a fuel. Itis just a way of storing or transporting energy and it has to beconcocted in the first place, if not by braking down natural gas thenthe electrolysis method that Hydrogenics uses. (There are alsothermolysis or photoelectrolysis technologies, but we will save thosefor science lessons another day.) Electrolysis has a theoreticalmaximum efficiency of about 80% to 94%, but practically speakingactual production can fall short of such efficiency.

Evenexcluding the production questions, hydrogen is a bit volatile andpresents all sorts of technical challenges to transport. That is whyHydrogenics’ hydrogen generation solutions are located on customersites.

Inmy view, Hydrogenics management has demonstrated strong executionskills that might be missed by some investors who do not look pastthe net losses over the past several years. The shift from fossilfuels puts a spotlight on their hydrogen-from-water technology.Furthermore, the use of water, which can be sourced anywherefacilitates on-site hydrogen production, removing transportchallenges as an obstacle to customer adoption of hydrogenalternatives.

DebraFiakas, CFA is the Managing Member of Crystal Equity Research,LLC,an alternative research resource on small-capitalization companies. Ms.Fiakas is a seasoned investment professional with a diversifiedand successful track record as a research analyst and as aninvestment banker. Her career includes solid experience in allaspects of the equity capital markets with particular emphasis onemerging growth companies.

DISCLOSURE: Neitherthe author of the SmallCap Strategist web log, Crystal Equity Research nor its affiliates have a beneficialinterest in the companies mentioned herein. HYGS is included inCrystal Equity Research’s TheAtomics Indexin the Hydrogen Electrolysis group.

Posted by Guest Contributor on November 9, 2010 06:27 PM | Hydrogenics Corp: Splitting Water

advertise here

Post a comment (If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)

Name:

Email Address:

URL:

Remember personal info?

Comments: (you may use HTML tags for style)

Featured Companies

Search This Site
Enter your search termsWebAltEnergyStocksSubmit search form Subscribe to this Blog

Enter your email address:

Delivered by FeedBurner

Subscribe by RSS Feed

Twitter Headlines

Categories About Biofuels Biodiesel Ethanol Biomass Waste-to-Energy Books, Reports, Webcasts & Podcasts Clean Transportation Coal-to-Liquids Electric Grid Energy Efficiency Energy Storage Batteries Flywheel Hydrogen Environmental Markets Featured Companies Fuel Cell Geothermal Hydro Industry General Interviews Microturbine Misc Mutual Fund & ETF News Ocean Power Peak Fossil Energy Plug-in Vehicles Policy Polls Pollution Control Portfolio Power Production Solar Solar Photovoltaic Solar Thermal Strategy The Week in Cleantech Wind Archives November 2010 October 2010 September 2010 August 2010 July 2010 June 2010 May 2010 April 2010 March 2010 February 2010 January 2010 December 2009 November 2009 October 2009 September 2009 August 2009 July 2009 June 2009 May 2009 April 2009 March 2009 February 2009 January 2009 December 2008 November 2008 October 2008 September 2008 August 2008 July 2008 June 2008 May 2008 April 2008 March 2008 February 2008 January 2008 December 2007 November 2007 October 2007 September 2007 August 2007 July 2007 June 2007 May 2007 April 2007 March 2007 February 2007 January 2007 December 2006 November 2006 October 2006 September 2006 June 2006 May 2006 April 2006 March 2006 February 2006 January 2006 December 2005 November 2005 October 2005 September 2005 August 2005 July 2005 June 2005 May 2005 April 2005 March 2005 February 2005 January 2005 December 2004 November 2004 October 2004 September 2004 August 2004 July 2004 Click Here