- As with any emerging industry, hydrogen’s shortcomings, like lack of infrastructure and reliance on fossil fuels, open the door for companies to innovate them away
- AmmPower, a clean energy company, is offering green ammonia generation technology that could radically streamline hydrogen transportation
- Despite this potential, AmmPower stock has given back more than 89 per cent year-over-year
Hydrogen has long been hailed as a key driver in the move away from fossil fuels, as it offers about twice the fuel economy of gasoline, produces no emissions besides water, and is the most abundant element in the universe.
Unlike biofuel or hydropower, hydrogen doesn’t require vast expanses of land to produce, and unlike nuclear power, it poses no potential danger from toxicity or environmental impact, though it is infamously flammable. Vehicles powered by hydrogen fuel cells can also be recharged in as little as five minutes, a steep drop from the 30 minutes to several hours an electric vehicle might require.
While the potential for hydrogen to put a wrench in climate change is significant on an environmental and economical level – the global hydrogen market is slated to grow from US$242.7 billion in 2023 to US$410.6 billion by 2030 – a number of major downsides remain before setting the gas up as a truly competitive fuel source:
- Most hydrogen extraction relies on fossil fuels, with 47 per cent of production stemming from natural gas, 27 per cent from coal, 22 per cent from oil and only around 4 per cent from green methods.
- Current global infrastructure is insufficient in the areas of charging, storage and transportation to make a meaningful impact on fossil fuel consumption.
- Hydrogen also has poor price transparency because it is not traded under a standardized system, meaning ventures and consumers face higher costs and a steeper curve towards mass adoption.
As with any emerging industry, hydrogen’s shortcomings in the marketplace open the door for companies to innovate them away, drive sustainability forward and generate returns for investors.
A prospective stock to consider is AmmPower (CSE:AMMP), a clean energy stock scaling up green ammonia production at industry leading economics for fertilizers, carbon-free shipping fuel and hydrogen transportation.
Besides ammonia‘s main use in fertilizer, accounting for about 70 per cent (US$140 billion) of the total market, it can also be transformed into hydrogen more efficiently and at less cost than competing methods, electrolysis and steam reforming, as well as transported more cheaply compared with liquefaction using hydrogen itself. This makes ammonia an ideal hydrogen carrier agent to optimize the supply chain and unlock value.
The only problem is the ammonia production industry is almost completely reliant on fossil fuels, pointing to the need for more readily available sources of green ammonia to catalyze the hydrogen economy.
This is where AmmPower’s proven Independent Ammonia Making Machine takes the stage. The mobile, scalable unit can generate up to 4 metric tonnes of ammonia per day by combining hydrogen from water and nitrogen from air at an electricity cost of only US$360 per tonne of ammonia, and at 2-4x higher unit economics than competing methods. Production tax credits of more than US$500 per tonne available through the U.S. Inflation Reduction Act for projects that use renewable electricity make the endeavour an overall profitable one at current prices, whether farm, co-op, or industrial manufacturer.
The clean energy stock’s readily recognizable value proposition hasn’t risen above its pre-revenue operations, a difficult task at the best of times, which has been compounded by high consumer prices and central bank hawkishness nudging investors towards safer havens than microcap stocks.
If you’re an investor since inception in 2020, you’re down by 91.25 per cent as of March 4, 2024, facing the enviable choice of continuing to support an innovation the market has almost completely discounted, or taking a capital loss on what could be an exponential return.
If you’re hearing about the stock for the first time, you’re sitting at a more privileged vantage point, where macro-induced pressure, and micro-cap stocks’ inherent volatility, are offering you bargain-bin exposure to the leading edge of two multi-hundred-billion-dollar industries.
Whether you decide AmmPower has a place in your portfolio, or you move on to your next prospective stock pick, you owe it to yourself to make a well-informed decision, given the massive upside at stake.
AmmPower stock (CSE:AMMP) last traded at C$0.030 per share and has fallen by 89.06 per cent year-over-year.
Join the discussion: Learn what other investors are saying about this clean energy stock on the AmmPower Bullboard, and check out Stockhouse’s stock forums and message boards.
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