Specialist
Former Director at a fuel cell company
Agenda
- Strongest adoption of hydrogen fuelling stations in the US, recent Q2 2023 uptick in order intake and impact from Inflation Reduction Act
- Cost assessment and inflation trends in constructing hydrogen fuelling stations
- Supply chain challenges for hydrogen fuelling station equipment and reliance on external suppliers
- Competitive analysis, noting weakened financing environment
Questions
1.
Could you give an update on the hydrogen fuelling stations since April 2022 and explain how that has tied into the story for hydrogen fuel and electrolysers more generally in the last 1-2 years? Since our last Interview, Nel's shares have roughly halved, and the situation is about the same for ITM Power.
2.
Do you think the downwards pressure and market declines for hydrogen are more economically driven rather than driven by lower-than-anticipated adoption rates resulting in lower fundamental usability of hydrogen year after year?
3.
How has the Inflation Reduction Act impacted the outlook for hydrogen fuel stations in the US? The federal government recently made an announcement on the use of hydrogen hubs to drive regional clean manufacturing and job creation.
4.
Once the hydrogen hubs are built, would you expect any implications for revenue and demand generation beyond simply the expenditure from the government meaning equal expenditure on fuelling stations?
5.
How well would you say Nel is positioned to absorb some of the approximate USD 500m government investment towards fuelling stations? Would you expect it to match its market share of fuelling stations in the US, or might it be better-positioned to gain greater share than its competitors?
6.
In our previous Interview, you mentioned you expect there to be 300 EUR 3m 1,000kg installations by 2025 globally, 1,000kg installations in 2028, plus 90 EUR 10m 10-tonne stations. Have your expectations changed since, given the downward pressure from the economy and the sentiment today surrounding hydrogen?
7.
Do you think the authorities have hydrogen in mind when holding the automotive OEMs to new standards? Do you think they are potentially pushing the agenda of hydrogen through vehicle emission standards?
8.
Fuelling station orders for Nel had a step-up in Q2 2023, which might indicate a lump-sum order. What is your outlook for new orders? Do you think this boost will be sustained or do you think it is likely to be a one-off?
9.
What are your thoughts on Nel's recent win of a record-size USD 24m fuelling contract for 16 fuelling stations in California?
10.
Where would you identify the strongest short-term adoption potential for hydrogen fuelling stations, other than California? Do you think the bipartisan Infrastructure Bill is the next stage to spread out the concentration away from California?
11.
We discussed the major technological limitation in refuelling as reliability, and you outlined the need to service once every 1-2 years, reduced from several times per year. Have there been any improvements now or foreseeable in the next 6-12 months?
12.
Considering the goal to have the stations serviced once every 1-2 years, how often do they need servicing on average now, and how does that compare to in 2022, 2021 and 2020?
13.
Why is this product engineering so difficult for hydrogen? Siemens, GE and all the engineering conglomerates for the last century have designed gas pumps, liquid pumps and similar engineering products. What is so difficult about hydrogen pumps? Is it their lack of exhaustive capital, other company limitations or the nature of dealing with a new fuel and the extreme coldness involved?
14.
What is your assessment of the engineering conglomerates' positioning in the market, perhaps they're more on the electrolyser front? What are Siemens Energy, GE and others working on relative to Nel and the other pure hydrogen players?
15.
Do you expect a continuing trend of conglomerates such as Cummins buying up hydrogen players such as Nel? Is that a more likely scenario than the pure hydrogen players developing independently without being acquired?
16.
On what timeframe do you estimate the market will achieve this all-important goal of servicing once every 1-2 years?
17.
In our last Interview, you ranked the key players based on their technical intellectual property as Linde, Nel, Air Products and then ITM. Has this story changed since with product developments, or have there been any new entries or disruptive technologies?
18.
Have you noted any shifts in market development within vs outside of the US?
19.
What are the heaviest cost areas in producing or maintaining hydrogen fuelling stations,
considering inflation trends?
20.
To what extent are Nel and its peers protected against the risks of cost inflation? Where would they be stung by cost inflation, and where are they insulated by indexation clauses?
21.
What is the typical cost of an average-sized fuelling station?
22.
What are the key indicators to forecast when new heavy-duty stations might come online? Do you think it is worth monitoring the orders of heavy-duty hydrogen vehicles being added to fleets?
23.
At what point does a hydrogen fuel station break even?
24.
What are the biggest cost buckets for equipment, such as pumps and the compressors, and how do they split out?
25.
What cost reduction strategies can bring the cost curve down over time? Can you speculate on percentage reductions in three, five or 10 years' time?
26.
How would you characterise the supply chain challenges for the equipment and for the fuelling stations to be built?
