Clean energy technology company Fusion Fuel Green (NASDAQ:HTOO) stock was reversed merged with a special-purpose-acquisition-company (SPAC) HL Acquisition and started trading on Dec. 24, 2020 under the current symbol. The Company utilizes proprietary technology to produce green hydrogen through their hydrogen generators with virtually no CO2 emissions versus legacy brown hydrogen production. Legacy hydrogen is one of the largest sources of CO2 at 830mt/year. The global initiative for decarbonization is a major tailwind for Fusion Fuel to become a key player in the movement to slow climate change. The Company fits the strongest environmental themes with the European Union and the new Biden administration. The hottest momentum trends in 2021 pertain to clean/smart energy storage, ESG to electric vehicles (EVs), battery optimization technology and rare earth elements to create them. Prudent investors seeking to gain exposure can monitor opportunistic pullback levels in Fusion Fuel shares to scale in positions.
Brown Hydrogen vs. Green Hydrogen
Hydrogen is technically the most abundant element on earth, but there is no naturally occurring elemental hydrogen. Hydrogen can be used to power fuel cells which then generate electricity, heat and water. Fuel cells powered by hydrogen are completely carbon-free since the electricity is produced through chemistry, not combustion Hydrogen is commonly produced through the process of electrolysis, using electricity to split water into hydrogen and oxygen. While hydrogen produced through electrolysis has zero greenhouse emissions, the source and process supplying electricity tends to generate greenhouse gases. Nearly all hydrogen production is considered brown hydrogen due to the gas emissions from the source of the electricity. Brown hydrogen is produced from coal or natural gas through steam methane reforming, which produces significant greenhouse emissions. Green hydrogen utilizes zero-emission energy sources to generate the electricity for electrolysis. Unfortunately, renewable energy is more expensive, inconsistent and not cost-effective.
Enter Fusion Fuel
Fusion Fuel seeks to make green hydrogen pricing competitive as brown hydrogen. The Company utilizes solar energy as the renewable energy source to generate the electricity for the electrolysis to produce green hydrogen. The core technology centers around their concentrated photovoltaic (CPV) solar tracker and photon electrochemical hydrogen generator, which is the Company’s electrolyzer. The goal is to generate two revenue streams. As a technology provider, the Company sells, installs, maintains, monitors and services Fusion Fuel hydrogen generators. As a plant operator and green hydrogen producer, the Company develops their own green hydrogen farms financed by selling green hydrogen to customers across the utility, refining, ammonia and industrial sectors.
Global Green Hydrogen Movement
There is a global green hydrogen movement lead by Portugal. The Company plans to sell green hydrogen to international natural gas markets which are facing mandates to blend hydrogen into the natural gas stream. Mixing green hydrogen into natural gas networks is a viable tool to meet decarbonization goals. Portugal has a goal of 10% to 15% mix by 2030 and an annual production goal of 350,000 tons of green hydrogen by 2030. France has a 10% mix by 2030 goal. Germany has an above 10% mix and 420,000 tons per year of green hydrogen production target by 2030.
Fusion Fuel also sells their green hydrogen production technology to end-users that seek to supplement existing brown hydrogen production with green hydrogen.
Green Hydrogen Production Cost Targets
According to Fusion Fuels, hydrogen production costs for brown hydrogen utilizing coal and/or natural gas is just over $2/kg compared to current renewable green hydrogen production costs near $8/kg. Fusion Fuels seeks to lower production costs of green hydrogen to just under $2/kg. The Company has two projects in Portugal. The Evora Project seeks to install 55 green hydrogen generators in two phases in Evora, Portugal. The Sines Project is five projects, each with a 25-year lifespan, installed from 2021 through 2025 and a 15-year operating agreement. The Evora Project is a demonstrator project. Prudent investors looking for a potential key player in the green hydrogen industry can watch shares for opportunistic pullback levels to find entries.
HTOO Opportunistic Pullback Levels
We use the rifle charts on the weekly and daily time frames to provide a short-term perspective with the limited trading data for HTOO shares since they are newly minted. The weekly rifle chart has a stochastic mini pup with the 5-period moving average (MA) support rising through the $19.37 Fibonacci (fib) level. The weekly upper Bollinger Bands (BBs) sit at $29.09. The daily rifle chart has an uptrend powered by the daily stochastic mini pup that triggered the daily market structure low (MSL) above $18.49. The daily 5-period MA sits at the $21.49 fib with upper BBs at $25.02. High-risk tolerant investors can monitor opportunistic pullback levels at the $21.49 fib, $20.50 fib, $19.37 fib, $18.56 fib and the $17.30 fib. Potential upside trajectories range from the $27.44 fib to the $35.00 fib. Since this stock is newly minted, be aware of lock-up restrictions and upcoming earnings results that can trigger sharp volatility.