Hydrogen - energy carrier of the future?

Hydrogen - energy carrier of the future?

18 May 2020Reading time: 4 minutes

The generation of energy from hydrogen is still in its infancy in various parts of the world. But the prospect of lower costs and a better infrastructure could provide a major boost to this promising energy carrier. The potential for the economy and society is vast. An upturn in the technology should also boost hydrogen stocks. With the Solactive Hydrogen Top Selection Index, investors can participate almost 1:1 in the performance of 15 leading hydrogen companies.

At the Paris Climate Conference in 2015, 195 countries agreed to limit global warming to two degrees Celsius. But drastic measures are required to achieve this goal. Energy-related carbon dioxide (CO2) emissions must be reduced by a full 60% by 2050. This is not an easy task when you consider that the population is estimated to increase by around two billion people during this period. Our energy system must therefore undergo fundamental changes. Energy efficiency is needed and more and more renewable and low-carbon energy sources must be used.

Bull & Bear Certificates

 Symbol ISINIndex reference instrumentFactorTypeCur.BidAsk 
BULL AAPL X10 VNT3
DE000VE4KKK7 Apple Inc. 10.00 Long DKK 0.416 0.422
BULL AAPL X10 VNT4
DE000VE53624 Apple Inc. 10.00 Long DKK 0.074 0.078
BULL AAPL X10 VNT2
DE000VF8D9Y9 Apple Inc. 10.00 Long DKK 0.836 0.846
BULL AAPL X10 VNT6
DE000VP2SBE3 Apple Inc. 10.00 Long DKK 77.95 78.79
BULL AAPL X10 VNT7
DE000VP343E3 Apple Inc. 10.00 Long DKK 63.67 64.34
BULL AAPL X10 VNT9
DE000VP485T0 Apple Inc. 10.00 Long DKK 6.40 6.47
BULL AAPL X10 VNT8
DE000VP4VGN3 Apple Inc. 10.00 Long DKK 31.85 32.19
BULL AAPL X10 VNT10
DE000VP69NS9 Apple Inc. 10.00 Long DKK 3.22 3.26
BULL AAPL X10 VNT11
DE000VP9V6S3 Apple Inc. 10.00 Long DKK 318.13 321.47
BULL WTI X10 VNT8
DE000VP29RK1 WTI Light Sweet Crude Oil Future Mar 2021 10.00 Long DKK 105.80 106.91
BULL WTI X10 VNT9
DE000VP3A688 WTI Light Sweet Crude Oil Future Mar 2021 10.00 Long DKK 84.66 85.55
BULL WTI X10 VNT10
DE000VP3L891 WTI Light Sweet Crude Oil Future Mar 2021 10.00 Long DKK 8.46 8.55
BULL WTI X10 VNT11
DE000VP3TYV5 WTI Light Sweet Crude Oil Future Mar 2021 10.00 Long DKK 42.32 42.77
BULL WTI X10 VNT12
DE000VP8PGH8 WTI Light Sweet Crude Oil Future Mar 2021 10.00 Long DKK 211.71 213.92
BULL WTI X10 VNT13
DE000VP9PWE0 WTI Light Sweet Crude Oil Future Mar 2021 10.00 Long DKK 423.30 427.72
BULL WTI X10 VNT14
DE000VP9SVM9 WTI Light Sweet Crude Oil Future Mar 2021 10.00 Long DKK 1,058.54 1,069.58
BULL OLIE X10 VNT9
DE000VP10DA2 Brent Crude Oil Future Mar 2021 10.00 Long DKK 0.01
BULL OLIE X10 VNT8
DE000VP1RE94 Brent Crude Oil Future Mar 2021 10.00 Long DKK 0.001
BULL OLIE X10 VNT11
DE000VP2QPN8 Brent Crude Oil Future Mar 2021 10.00 Long DKK 0.004
BULL OLIE X10 VNT12
DE000VP2SA70 Brent Crude Oil Future Mar 2021 10.00 Long DKK 0.06 0.064

Hydrogen: multifunctional and climate-neutral

As a "clean" and multifunctional energy carrier, hydrogen could make a significant contribution to achieving these goals. However, hydrogen is not only a low-CO2 energy carrier - its production can also be climate-neutral if renewable energy sources are used. The entire energy production from hydrogen can therefore be "green". Furthermore, the areas of application for hydrogen as an energy carrier are very broad. For example, energy generated from hydrogen can be fed directly into the power grid and thus increase the proportion of renewable energy sources in the system - or it can be used to decarbonise industry and transportation, for example.

For the conversion of hydrogen into energy a fuel cell is needed which is already used in many applications. Due to very high costs and a lack of infrastructure, the technology is still in its infancy, especially in this part of the world.

 

Is hydrogen picking up speed?

The latest study by the Hydrogen Council - a consortium of 18 companies from the automotive, oil and gas, industrial gas and equipment industries - from January 2020 has shown that the production of energy from hydrogen is likely to increase significantly in the near future. After all, as the report states, the cost of hydrogen solutions is expected to fall sharply within the next decade; by up to 50%. This is a much greater reduction - in less time - than was previously expected. This makes the use of hydrogen solutions attractive, even compared to conventional energy carriers.

If the use of hydrogen increases considerably, then "hydrogen shares" should also profit substantially from the upswing. In the recent past, the share prices of certain leading companies in the field of energy production from hydrogen have experienced a veritable explosion in share prices. Shares such as PowerCell or Nel have recorded significant price gains in recent months. However, the Canadian fuel cell company Ballard Power, which was able to achieve a price increase of around 200% last year, can outshine them all. However, it should be noted at this point that past performance gives no indication of future performance. Hydrogen technologies are promising - and should also offer interesting opportunities for investors.

Invest in hydrogen shares with a single transaction

Is hydrogen the energy carrier of the future? One does not know. But one thing is certain: fuel cells and hydrogen are indispensable in the energy mix of the future - and the potential for the economy and society is immense.

The euphoria about the potential of hydrogen could also attract investors. Because if the trend towards hydrogen and fuel cells soon picks up speed, the shares of the leading companies in the sector should also be boosted. But selecting the "right" hydrogen share is certainly not easy - and holding individual, often highly volatile stocks in the portfolio is often too risky for many investors. Vontobel has therefore created the Solactive Hydrogen Top Selection Index for precisely this purpose. The index comprises 15 companies that are leaders in the field of hydrogen.

The Hydrogen Top Selection Index is an index of Solactive AG and is calculated and distributed by the latter. By means of a participation certificate, investors participate almost one-to-one in potential price gains, but also in possible losses of the index. The following chart shows how the companies are selected.

Why an early investment could be worthwhile

Let's recap: If investors are convinced that hydrogen and fuel cell technology is likely to prove successful, a participation certificate on the Solactive Hydrogen Top Selection Index could be an interesting investment opportunity. The technology is still at a relatively early stage - but it has the "power" to fundamentally influence the energy sector and the economy. Positioning yourself early enough and entering when the trend could pick up could pay off for investors.

The future share performance will depend on various corporate-, industry- and economic factors. Investors should consider the risks before taking any investment decisions. The performance of the underlying might differ from investors’ expectations and lead to a potential capital loss.

Bull & Bear Certificates

 Symbol ISINIndex reference instrumentFactorTypeCur.BidAsk 
BULL AAPL X10 VNT3
DE000VE4KKK7 Apple Inc. 10.00 Long DKK 0.416 0.422
BULL AAPL X10 VNT4
DE000VE53624 Apple Inc. 10.00 Long DKK 0.074 0.078
BULL AAPL X10 VNT2
DE000VF8D9Y9 Apple Inc. 10.00 Long DKK 0.836 0.846
BULL AAPL X10 VNT6
DE000VP2SBE3 Apple Inc. 10.00 Long DKK 77.95 78.79
BULL AAPL X10 VNT7
DE000VP343E3 Apple Inc. 10.00 Long DKK 63.67 64.34
BULL AAPL X10 VNT9
DE000VP485T0 Apple Inc. 10.00 Long DKK 6.40 6.47
BULL AAPL X10 VNT8
DE000VP4VGN3 Apple Inc. 10.00 Long DKK 31.85 32.19
BULL AAPL X10 VNT10
DE000VP69NS9 Apple Inc. 10.00 Long DKK 3.22 3.26
BULL AAPL X10 VNT11
DE000VP9V6S3 Apple Inc. 10.00 Long DKK 318.13 321.47
BULL WTI X10 VNT8
DE000VP29RK1 WTI Light Sweet Crude Oil Future Mar 2021 10.00 Long DKK 105.80 106.91
BULL WTI X10 VNT9
DE000VP3A688 WTI Light Sweet Crude Oil Future Mar 2021 10.00 Long DKK 84.66 85.55
BULL WTI X10 VNT10
DE000VP3L891 WTI Light Sweet Crude Oil Future Mar 2021 10.00 Long DKK 8.46 8.55
BULL WTI X10 VNT11
DE000VP3TYV5 WTI Light Sweet Crude Oil Future Mar 2021 10.00 Long DKK 42.32 42.77
BULL WTI X10 VNT12
DE000VP8PGH8 WTI Light Sweet Crude Oil Future Mar 2021 10.00 Long DKK 211.71 213.92
BULL WTI X10 VNT13
DE000VP9PWE0 WTI Light Sweet Crude Oil Future Mar 2021 10.00 Long DKK 423.30 427.72
BULL WTI X10 VNT14
DE000VP9SVM9 WTI Light Sweet Crude Oil Future Mar 2021 10.00 Long DKK 1,058.54 1,069.58
BULL OLIE X10 VNT9
DE000VP10DA2 Brent Crude Oil Future Mar 2021 10.00 Long DKK 0.01
BULL OLIE X10 VNT8
DE000VP1RE94 Brent Crude Oil Future Mar 2021 10.00 Long DKK 0.001
BULL OLIE X10 VNT11
DE000VP2QPN8 Brent Crude Oil Future Mar 2021 10.00 Long DKK 0.004
BULL OLIE X10 VNT12
DE000VP2SA70 Brent Crude Oil Future Mar 2021 10.00 Long DKK 0.06 0.064

 

This information does not constitute a financial analysis, but product advertisement. Thus it does not meet the legal requirements to ensure the impartiality of financial analysis and is not subject to trade prohibition before the publication of a financial analysis.

For detailed information, particularly regarding the structure and the risks associated with an investment in the derivative financial instruments, prospective investors should read the Base Prospectus, which is available together with the Final Terms and any supplement to the Base Prospectus in electronic form on the issuer’s website: http://certificates.vontobel.com. Additionally, the Base Prospectus, any supplements to the Base Prospectus and the Final Terms are available in printed form, free of charge, at the registered office of the issuer: Vontobel Financial Products GmbH, Bockenheimer Landstrasse 24, 60323 Frankfurt am Main, Germany.

Investors should consider the applicable selling restrictions.

Companies of the Vontobel group may directly or indirectly pay commissions in varying amounts to third parties (e.g. brokers) in connection with the public offer and the distribution of the derivative financial instruments. Further information is available upon request from your distribution partner.

Without permission, this product advertisement may not be reproduced or redistributed.

 

 

 

22/01/2021 05:24:17

 

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