Great question !
It’d be nice info if someone can offer cost of green h2 to furnace…i think cost would be higher compared to coke.
But 30% import tax at European destination as CBAM using coke would be compensating higher cost of H2.
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useful information . The listed entities are Reliance , L&T , Adani.
It is not only import duty on coke, being a commodity , subject to international market.price that could be volatile from time to time.
And then availability , shipping is a big issue nowadays due to geopolitical risks and blockage of sea routes.
So Green hydrogen which we would make would be based upon Solar Wind Water - Atma Nirbhar Bharat and in my view the cost of Green Hydrogen would be affordable in due course of time.
Already , Green hydrogen from waste water produced by a Bio-reactor is available at less than 1 USD in India
There will be phase 2 and phase 3 tenders coming soon for electrolysers capacity within 2024. Many more companies will get the allocation in them.
In Phase 1, only 1.5GW capacity has been awarded. Total planned electrolysers capacity by govt is 4.4GW
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Across various industries, there is a growing interest in exploring alternative and environmentally friendly energy sources. This shift is not solely driven by efficiency gains but also by the need to comply with more stringent regulations.
When considering the adoption of novel fuel sources or technologies, companies face a significant initial investment. Sectors like automotive and steel, despite being capital-intensive, operate on narrow profit margins. The decision to transition from traditional coking coal to green hydrogen (H2) isn’t merely about the price difference; it hinges on the overall cost implications—including investments, opportunities, and infrastructure upgrades.
In essence, the industry players are navigating a complex landscape where financial considerations intersect with environmental responsibility
Disc: No investments in capital intensive sectors and may not do so in the foreseeable future
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Based on what i’ve heard from senior industry people, My understanding is that Businesses-Industries are for profit…their focus isnt/wont be environment or for that matter anything else than profit…hence ultimately it boils down to economics…they invest in alternative/environment friendly energy sources may be for immediate or longterm profits.
Lets look at why steel exporters might be first to use green H2.
EU has imposed carbon tax…called CBAM…
In short it requires carbon emission declaration for imports into EU destinations.
Initially it is applied For steel,fertilizer,cement anciliary etc starting January-2024.https://www.pwc.in/assets/pdfs/tax-knowledge-hub/carbon-border-mechanism-cbam-adjustment.pdf
Idea is the emissions will be compared with EU emissions and emissions which are higher than EU emission will be charged 30%.
CBAM=quantify emissions > compare with EU emission norms > pay 30% for emissions exceeding EU emissions.
D-invested in couple of H2 producing utilities & biased for H2 utilities & anciliaries, continue to look for H2 EPC, Utilities, anciliaries.
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Have you been able to find Chemical/Materials and its suppliers to to L&T or any supplier to this electrolyser project ?
L&T used Mclyser technology that means it was built in india through tech transfer…that means there were suppliers of Stack (or part of stack lke Membrane, Bipolar plates, End plates if L&T built stacks bythemselves).
@1957 @hardik_shah1 I am very much interested in knowing who builds memebrane in india and who produces catalyst.
There might be suppliers of Compressors, Gas collecting-mixing equipments if L&T only did Engineering, Vessel, Piping part.
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Top 10 Renewable Energy Companies in India actively driving Renewable Energy revolution
How many you own ? Please respond if any contrarian views please !
Obviously Reliance & Larsen Toubro not appearing in the list since they are purely Green hydrogen/ Electrolyser Fuel cell companies
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if u asking from the list, i’ve one.
1.JSWEnergy
i also’ve following which i think play part in renewable.
1.oil india
2.servotech power~lower level.
3.timetechno( hy storage, may be very few, i just know this one)
but then we must also look around for the new flavour of the market…not sure if renewable will continue to be in favour. ofcourse specific names with bright future shall remain in favour.
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One should be extremely careful in the latest/hottest trend/sector. Some of the names trade at insane valuations, for how long will such valuations sustain is a huge question mark. Many businesses in this sector have no competitive advantage, businesses have thin margins, operate on high level of debt, etc. Hence need to be ultra cautious.
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My views as follows :
(1) Renewable Energy in terms of Solar Wind Hydro , CBG , Green hydrogen are here to stay… It is an irreversible process world over due to targetted reduction in carbon foot print to curb climate change.
(2) Market fancy - yes currently these stocks do enjoy. But how long ?.difficult to predict…In my view , it should enjoy market fancy at least for next few years or until 2030.
(3) Thin margins and high valuation - that is correct and it may continue for few more quarters or a year or two.
It is because for example - till date India is a net importer for Solar panel…however it is on a decline since last 6 Months due to import tariff imposed by India and PLI scheme to encourage Atma Nirbhar Bharat. China is the world leader in Solar panels Chinese Govt has been able to create the Eco-system over last 1-2 decades to become a low cost producer of many things - Solar panel , Coal gasification- Coal from commodity to chemicals , API for pharma and chemicals., EV to name a few.
We have just started now , but we seem to be moving very fast under the current Govt , though we need to be faster.
(4) It all depends upon one’s risk appetite. For medium to long term , i feel select renewables could be a good play. Consciously , I am avoiding Small Mid cap pure play renewables because of the margin challenges , capital requirement etc.in short term.
I prefer existing profitable business in large cap / PSU’s diversifying in to renewables, hydrogen and that is where I have made descent profit over the last couple of years.
And I would like to continue with the above strategy
I see many people exited from Large / Mid PSU from energy basket , railway and defence during recent corrections…But since I was sitting in descent profit in spite of 8-10% corrections , I did not exit. In fact I added in select PSU where I had earlier booked some profit .
I may wind up my PSU positions if there is a policy change with regards to current capex plans on renewables railway defence and Atma Nirbhar Bharat.
if the current Govt policy continues , there is nothing to get panic , there is still some steam left in select PSU with strong order book and earning visibility.
In any case I am getting regular income from dividends - 2-3 times a year.
@1957 Om, I agree with all the points you mentioned.
- Large/PSU energy names seem to continue their upward journey, though perhaps not at the same speed. We’re on the same page here. Let’s wait and see.
- I don’t foresee any policy changes, especially considering recent polls.
- Renewable energy (solar, wind, hydro, CBG) is indeed here to stay and will only grow.
- Green Hydrogen is still in its nascent stage, but if the technology evolves and becomes cheaper, it could completely transform the energy and chemical landscape, offering significant opportunities for the economy and stocks involved.
Points I’d like to add:
- Solar EPC names appear to be labor-oriented businesses. I’ve heard that margins are around 6% for private works and 10% for government contracts. I believe the solar EPC space is already crowded, and I anticipate their margins will be squeezed soon.
- Solar panel manufacturers, from what I’ve gathered, are likely to continue experiencing revenue growth for the foreseeable future. I agree with your estimate of 2030.
I’m curious about the names you own and which ones you believe still have more stem left.
Though my experience in equity is shorter comparatively,When i say new sectors. I think it’s essential to keep an eye out for new sector that offer quick returns at the portfolio level. While I’m uncertain whether renewables are still the market darling, I’m also unsure when or if a new sector will become more favored by the market. Nonetheless, I continue to check and ask for sectoral movements in the market.
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I think more or less we are in same page !
As regds to my Renewable energy basket , nothing to hide …declared so many times in this forum …Anyway never mind to mention here once again,
From Pvt corporates , i am holding Tata power , Reliance , JSW Energy , L&T. Thermax.
Adani Green & Adani enterprise was added during thr last big dip and now almost i have gained 30% post correction.
From PSU Energy basket …I have many which I had entered 2 years back from extremely lower level. I continue to hold for long term with a view to earn regular dividends and capital appreciation is secondary , though I have already booked profi to reduce overall size and get back my basic capital from most of them. still I hold a sizeable chunk of these stocks.
PFC, REC, IREDA, NTPC, NLC, NHPC, SJVN, OIL, IOC , ONGC, GAIL, BHEL, Power Grid
Discl : It is not a buy sell recommendation. please do your own assessment before investing
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This could be a disruption.If this gets going and becomes mainstream, alot of battery and EV start up will simply be left behind provided their engines starts from 10 hp. In that case, its apparent that diesel engine may simply become irrelevant.
The hydrogen network will remain an issue for some time but i think its smallest and easier to solve lacunae.
What kind of engines they will be making, Any other specific details with respect to types and capacity is available ?
I’ve heard couple of start ups and established players trying Hy ICE but they have had pre-spark compression problems.
If These guys are starting engine plant probably they have solved those compression problems.
I am very much interested in knowing if they can also make small 60-80 hp engines ?
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Have been thinking about this for sometime from a open range perspective.
ICE has been dominant form for a century for mass market cars and trucks.
The next 2-5 decades will splinter on engine and powertrain,
ICE+ Pure Ev + Hybrids + Hydrogen(some form of it).
No engine format will be dominant. So companies will choose their JV’s and their suppliers.
For eg: Toyata = Bet on Hybrids + Hydrogen
Tesla & BYD - Electric
VW/ Merc / BMW: They are reviewing all options given lack of EV penetration outside China despite Billions of investments and government subsidies.
I honestly believe bet here is companies like Bosch/Magna/select OEM over Engine and Powertrain Suppliers.
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Before we discuss on Hydrogen vs EV , Let me explain about Cummins as a company as there is a lot of confusion in the market place.
Cummins Inc is a US Based company-world leader diesel engine manufacturing now diversifying in to Hydrogen engines. They have been working on Hydrogen engines since last 10 years and They have been displaying vehicles powered by Cummins hydrogen engine in various Motor shows in india and abroad since last 4-5 years.
In India, we have Cummins India-a subsidiary company of Cummins Inc. Cummins India makes engines mainly Gen sets and other stationary applications.
Tata Cummins is a 50:50 joint venture between Tata motors and Cummins Inc to make engines for Automotive applications mainly to cater to Tata Motors requirement.
So , in India Cummins India is a listed company and Tata Cummins is not a listed company yet.
So , Cummins Inc is bringing hydrogen ICE through Tata Cummins and not through Cummins india.
Now coming back to your various questions that you have asked;
(1) Why talk about Hydrogen ICE from Tata Cummins only , every automotive manufacturer in indis is seriously working on Hydrogen vehicles both ICE and FCEV.
(2) In my view , Hydrogen ICE will come first commercially due to its simplicity- thanks to more than 200 years old IC engine platform and the vendor / and well established supply chain.
(3) FCEV seems a bit far-fetched in near future due to high cost and a bit of complexity.
(4) The main plus point for hydrogen vehicle is the Range - it can carry Hydrogen in.a tank as a liquid under 500- 700 bar pressure and can run up to 1000 kms in one fill in line with diesel vehicles
(5) EV has a poor range and would be limited to city / town application where charging points are available. Charging points all across high ways will take time- India has 161,350 kms of National Highways as of March 2022
(6).EV will remain popular as city driven cars and 2 wheelers and Hydrogen will become popular along high ways if long distance to be covered - for Trucks , buses and taxis and cars meant to be driven for long distance. However when hydrogen cars are made available, some EV car owners would like to switch to hydrogen cars.
(7) Due To long range of hydrogen vehicles , fewer filling stations are required Hydrogen filling stations currently is a bottleneck , but being planned in a big way.
(8)!So , as you have said rightly , it would be a disruption going ahead - it depends how soon Hydrogen filling stations are made available Hydrogen can also be carried in pipe lines from production.point to filling stations like CNG. Hydrogen can also be carried in tankers like diesel petrol… cryogenic tank… technology is available in India
(9) your question on power range of cummins- currently they have power range from 180 HP to 400 HP. Below 100 hp , they may have for genset / marine applications.
(10) It is true that for the time being all formats - will coexists together - EV, hybrids , diesel , petrol , CNG , LNG , CBG , Ethanol, methanol., biodiesel and flexi fuel along with Hydrogen.
(11) The most intersting thing is that except EV, all other formats will use the same iC engine platform - so ease of manufacturing in.same production line and same set of workshops with same set of mechanics for maintenance.
Can Hydrogen ICE challenge EV’s survival ?
Top 10 Global companies heavily invested in hydrogen ICE
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Sterling & Wilson now jumps in to Electrolyser manufacturing with foreign collaboration.
It is intersting to note that Sterling has gone for forward integration as Solar energy is the starting point to produce Green hydrogen with Electrolyser.
Reliance has 40% stake in Sterling & Wilson renewables.And Reliance already has tie up with other companies to produce electrolyser. Reliance has also received PLI approval for electrolyser