Investment trust insider on green hydrogen – James Carthew: Case for green hydrogen grows
About 18 months ago, I wrote about the launch of HydrogenOne Capital Growth (HGEN), the sole fund in the AIC’s Renewable Energy Infrastructure sector focused predominantly on capital growth. Investors’ enthusiasm for the trust waned over the course of 2022, on the back of the general selloff of growth stocks/unlisted and unprofitable companies.
Today, the fund trades on about a 23% discount to net asset value (NAV) which has not changed much since the trust’s £107m launch in July 2021, and no doubt some investors will suspect it is on a declining trajectory.
However, the case of renewable, ‘green’ hydrogen – the only variety produced in a carbon-neutral way – remains undimmed and, if anything, it is strengthening. Green hydrogen offers a route to decarbonising a wide range of industries, particularly those that are heavy consumers of energy.
The diversion of excess production of renewable energy into hydrogen generation at times of peak supply (when intraday power prices are exceptionally cheap) also offers another form of energy storage that can be held indefinitely. It could also take the place of natural gas-powered plants when generation from renewable sources dips.
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