I keep digging in the business models of hydrogen-oriented companies, more specifically five of them: 

>> Fuel Cell Energy https://investor.fce.com/Investors/default.aspx

>> Plug Power https://www.ir.plugpower.com/overview/default.aspx

>> Green Hydrogen Systems https://investor.greenhydrogen.dk/

>> Nel Hydrogen https://nelhydrogen.com/investor-relations/

>> Next Hydrogen (previously BioHEP Technologies Ltd.) https://nexthydrogen.com/investor-relations/why-invest/

I am studying their current reports. This is the type of report which listed companies publish when something special happens, which goes beyond the normal course of everyday business, and can affect shareholders. I have already started with Fuel Cell Energy and their current report from July 12^th, 2022 (https://d18rn0p25nwr6d.cloudfront.net/CIK-0000886128/b866ae77-6f4a-421e-bedd-906cb92850d7.pdf ), where they disclose a deal with a group of financial institutions: Jefferies LLC, B. Riley Securities, Inc., Barclays Capital Inc., BMO Capital Markets Corp., BofA Securities, Inc., Canaccord Genuity LLC, Citigroup Global

Markets Inc., J.P. Morgan Securities LLC and Loop Capital Markets LLC. Strange kind of deal, I should add. Those 10 financial firms are supposed to either buy or intermediate in selling to third parties parcels of 95 000 000 shares in the equity of Fuel Cell Energy. The tricky part is that the face value of those shares is supposed to be $0,0001 per share, just as it is the case with the ordinary 837 000 000 shares outstanding, whilst the market value of Fuel Cell Energy’s shares is currently above $4,00 per share, thus carrying an addition of thousands of percentage points of capital to pay.

It looks as if the part of equity in Fuel Cell Energy which is free floating in the stock market – quite a tiny part of their share capital – was becoming subject to quick financial gambling. I don’t like it. Whatever. Let’s go further, i.e. to the next current report of Fuel Cell Energy, that from July 7^th, 2022 (https://d18rn0p25nwr6d.cloudfront.net/CIK-0000886128/77053fbf-f22a-4288-b702-6b82a039f588.pdf ). It brings updates on two projects:

>> The Toyota Project: a 2,3 megawatt trigeneration platform for Toyota at the Port of Long Beach, California.

>> The Groton Project: a 7.4 MW platform at the U.S. Navy Submarine Base in Groton, Connecticut.

Going further back in time, I browse through the current report from June 9^th, 2022 (https://d18rn0p25nwr6d.cloudfront.net/CIK-0000886128/9f4b19f0-0a11-4d27-acd2-f0881fdefbc3.pdf ). It is the official version of a press release regarding financial and operational results of Fuel Cell Energy by the end of the 1^st quarter 2022. As I am reading through it, I find data about other projects:

>> Joint Development Agreement with ExxonMobil, related to carbon capture and generation, which includes the 7,4 MW LIPA Yaphank fuel cell project

>>  a carbon capture project with Canadian National Resources Limited

>> a program with U.S. Department of Energy regarding solid oxide. I suppose that ‘solid oxide’ stands for solid oxide fuel cells, which use a solid, ceramic core of fuel, which is being oxidized and produces energy in the process.     

I pass to the current reports of Plug Power (https://www.ir.plugpower.com/financials/sec-filings/default.aspx ). Interesting things start when I go back to the current report from June 23^rd, 2022 (https://d18rn0p25nwr6d.cloudfront.net/CIK-0001093691/36efa8c2-a675-451b-a41f-308221f5e612.pdf ). This is a summary presentation of something which looks like the company’s strategy. Apparently, Plug Power plans to have 13 plants with Green Hydrogen running in the United States by 2025, with a total expected yield of 500 tons per day. In a more immediate perspective, the company plans to locate 5 new plants in the U.S. over 2022 (total capacity of 70 tons per day) and 2023 (200 tons per day). Further, I read that what I thought was a hydrogen-focused company, has, in fact, a broader spectrum of operations: eFuel and methanol, ammonia, vehicle refueling, blending and heating, refining of natural oil, and the storage of renewable energy.  

As part of its strategy, Plug Power announces the acquisitions of companies supposed to bring additional technological competences: Frames Group (https://www.frames-group.com/ ) with power transmission systems and technology for building electrolyzers, ACT (Applied Cryo Technologies: https://www.appliedcryotech.com/ ) for cryogenics, and Joule (https://www.jouleprocess.com/about ) for the liquefaction of hydrogen. My immediate remark as regards those acquisitions, sort of intellectually straight-from-the-oven-still-warm-sorry-but-I-told-you-still-warm, is that Plug Power is acquiring a broad technological base rather than a specialized one. Officially, those acquisitions serve to enhance the Plug Power’s capacity as regards the deployment of hydrogen-focused technologies. Yet, as I am rummaging through the websites of those acquired companies, their technological competences go far beyond hydrogen.

Sort of contingent (adjacent?) to that current report is the piece of news, still on the Plug Power’s investors-relations site, from June 8^th, 2022. It regards the deployment of a project in Europe, more specifically in the Port of Antwerp-Bruges (https://www.ir.plugpower.com/press-releases/news-details/2022/Plug-to-Build-Large-Scale-Green-Hydrogen-Generation-Plant-in-Europe-at-Port-of-Antwerp-Bruges/default.aspx ). This is supposed to be something labelled as a ‘Gigafactory’.

A little bit earlier this year, on my birthday, May 9^th, Plug Power published a current report (https://d18rn0p25nwr6d.cloudfront.net/CIK-0001093691/203fd9c3-5302-4fa1-9edd-32fe4905689c.pdf ) coupled with a quarterly financial report (https://d18rn0p25nwr6d.cloudfront.net/CIK-0001093691/c7ad880f-71ff-4b58-8265-bd9791d98740.pdf ). Apparently, in the 1^st quarter 2022, they had revenues 96% higher than 1Q 2021. Nice. There are interesting operational goals signaled in that current report. Plug Power plans to reduce services costs on a per unit basis by 30% in the 12 months following the report, thus until the end of the 1^st quarter 2023. The exact quote is: ‘Plug remains focused on delivering on our previously announced target to reduce services costs on a per unit basis by 30% in the next 12 months, and 45% by the end of 2023. We are pleased to report that we have begun to see meaningful improvement in service margins on fuel cell systems and related infrastructure with a positive 30% increase in first quarter of 2022 versus the fourth quarter of 2021. The service margin improvement is a direct result of the enhanced technology GenDrive units that were delivered in 2021 which reduce service costs by 50%. The performance of these enhanced units demonstrates that the products are robust, and we expect these products will help support our long-term business needs. We believe service margins are tracking in the right direction with potential to break even by year end’.

When a business purposefully and effectively works on optimizing margins of profit, and the corresponding costs, it is a step forward in the lifecycle of the technologies used. This is a passage from the phase of early development towards late development, or, in other words, it is the phase when the company starts getting in control of small economic details in its technology.

I switch to the next company on my list, namely to Green Hydrogen Systems (Denmark, https://investor.greenhydrogen.dk/ ). They do not follow the SEC classification of reports, and, in order to get an update on their current developments, I go to their ‘Announcements & News’ section (https://investor.greenhydrogen.dk/announcements-and-news/default.aspx ).  On July 18^th, 2022, Green Hydrogen Systems held an extraordinary General Meeting of shareholders. They amended their Articles of Association, as regards the Board of Directors, and the new version is: ‘The board of directors consists of no less than four and no more than nine members, all of whom must be elected by the general meeting. Members of the board of directors must resign at the next annual general meeting, but members of the board of directors may be eligible for re-election’. At the same extraordinary General Meeting, three new directors have been elected to the Board, on the top of the six already there.

To the extent that I know the Scandinavian ways of corporate governance, appointment of new directors to the Board usually comes with new business ties of the company. Those people are supposed to be something like intermediaries between the company and some external entities (research units? other companies? NGOs?). That change in the Board of Directors at Green Hydrogen Systems suggests something like the broadening of their network. That intuition is somehow confirmed by an earlier announcement, from June 13^th (https://investor.greenhydrogen.dk/announcements-and-news/news-details/2022/072022-Green-Hydrogen-Systems-announces-changes-to-the-Board-of-Directors-and-provides-product-status-update/default.aspx ). The three new members of the Board come, respectively, from: Vestas Wind Systems, Siemens Energy, and Sonnedix (https://www.sonnedix.com/ ).

Still earlier this year, on April 12^th, Green Hydrogen Systems announced ‘design complications in its HyProvide® A-Series platform’, and said complications are supposed to affect adversely the financial performance in 2022 (https://investor.greenhydrogen.dk/announcements-and-news/news-details/2022/Green-Hydrogen-Systems-announces-technical-design-complications-in-its-HyProvide-A-Series-platform/default.aspx ). When I think about it, design normally comes before its implementation, and therefore before any financial performance based thereon. When ‘design complications’ are serious enough for the company to disclose them and announce a possible negative impact on the financial side of the house, it means some serious mistakes years earlier, when that design was being conceptualized. I say ‘years’ because I notice the trademark symbol ‘®’ by the name of the technology. That means there had been time to: a) figure out the design b) register it as a trademark. That suggests at least 2 years, maybe more.

I quickly sum up my provisional conclusions from browsing current reports at Fuel Cell Energy, Plug Power, and Green Hydrogen Systems. I can see three different courses of events as regards the business models of those companies. At Fuel Cell Energy, broadly spoken marketing, including financial marketing, seems to be the name of the game. Both the technology and the equity of Fuel Cell Energy seems to be merchandise for trading. My educated guess is that the management of Fuel Cell Energy is trying to attract more financial investors to the game, and to close more technological deals, of the joint-venture type, at the operational level. It further suggests an attempt at broadening the business network of the company, whilst keeping the strategic ownership in the hands of the initial founders. As for Plug Power, the development I see is largely quantitative. They are broadening their technological base, including the acquisitions of strategically important assets, expanding their revenues, and ramping up their operational margins. This a textbook type of industrial development. Finally, at Green Hydrogen Systems, this still seems to be the phase of early development, with serious adjustments needed to both the technology owned and the team that runs it.

Those hydrogen-oriented companies seem to be following different paths and to be at different stages in the lifecycle of their technological base.