Green Stocks
World is facing the consequences of excessive emissions of Greenhouse gases such as COx, NOx etc. from vehicles, rockets, aircrafts, factories etc. With increasing population of the world the use of fossil fuels such as Petrol and Diesel increased which led to the green House effects and climate change effects.
In order to overcome this, nations have come together to reduce the use of fossil fuels causing environmental pollution and in order to do that use of Electric vehicles have increased. Subsidiary policies have been introduced by government of different nations to divert people towards Electric vehicle. But electric vehicle also face one of the major challenge i.e. limited battery capacity. Electric vehicle can go only limited kilometers on a single charge and many R&D processes have been going across world to overcome this limitation in near future.
Another alternative to fossil fuel is Green Hydrogen fuel. Hydrogen as a fuel has been already in use in Rockets in the form of Liquid Hydrogen. Now, the world is working together to use it in Commercial Vehicles and Passenger Vehicles also.
For producing Hydrogen gas, electrolysis process is used. In this process water molecule splits into Hydrogen (H2) and Oxygen molecules (O2) using electrolysis process. Once, the molecules splits, Hydrogen gas is collected in containers and Oxygen is collected as a byproduct of the process which can be used later on.
(Image of process) (Source of Image : TANJA GEIS FOR EARTHJUSTICE)
Countries like US, UK and China have started investing to increase infrastructure, production and transportation of Green Hydrogen. Walking step by step with the world, few months ago on 15th August 2021, Hon’ble Prime Minister Shri Narendra Modi had launched “National Hydrogen Mission” with a goal to transfer India into a global hub for Green Hydrogen Production and Export.
Few listed companies have already joined Green Hydrogen revolution and have contributing aggressively to it. Hence the stocks of such companies can be called as “Green Stocks”. List of Green stocks includes:
- Reliance Industries Limited (RIL)
- GAIL
- NTPC
- Indian Oil Corporation Limited (IOCL)]
- Larsen and Toubro (L&T)
- Reliance Industries Limited (RIL)
RIL recently announced its plans to become net carbon zero firm by 2035 and in process to achieve it the company will invest Rs. 750 bn over next three years in renewable energy. Out of which Rs. 650 bn will be invested in making green energy complex in Jamnagar Gujarat.
The complex will have manufacturing units of Solar cells and modules, battery unit for energy storage, fuel cell making unit and an electrolyser plant to produce green hydrogen. Recently, RIL’s subsidiary company Reliance New Energy Solar (RNESL) has also partnered with Danish company Stiesdal A/S to develop and manufacture hydrogen electrolyser.
RIL will also build a 2.5 Giga watt electrolyser manufacturing unit in order to manufacture electrolyser at a cheaper rate compared to US and then sell them domestically as well as in international markets.
- GAIL
GAIL (India) is planning to build India’s largest green hydrogen plant and as a part of its first step for reaching towards its goal, the PSU has already finalized 2-3 sites to setup its plant out of which first will be in Vijaipur, Madhya Pradesh. The plant will have capacity of producing 10 MW Hydrogen, which is largest in the country till date.
GAIL has also been working on the pilot project of mixing hydrogen in natural gas and will use that mixture as a fuel in one of the cities.
- NTPC
NTPC is also planning to produce on a commercial scale from its upcoming 4,750 MW renewable energy park at the Rann of Kutch. Currently, the PSU is also running a pilot project of hydrogen production in its Vidhyanchal unit and the cost of Hydrogen is estimated to be around Rs 150 – 230 / kg (US $2-3 / kg).
NTPC is also planning to setup its first Green Hydrogen fueling station in Leh, Ladakh and will run 5 buses on Hydrogen fuel on trial basis. This will also make Leh as the first city in country to implement green – hydrogen based mobility project.
The company is targeting to achieve 60 GW renewables capacity by 2032 and has been promoting the use of green Hydrogen based solution in other sectors.
- Indian Oil Corporation (IOCL)
IOCL has been aggressively working of setting EV charging station on its current fuelling stations and along with that the company has also joined the Green Hydrogen Revolution. The company is planning to build green hydrogen plant in Mathura refinery Uttar Pradesh which will have a capacity of producing 160,000 hydrogen gas barrels per day.
The company also plans to setup a standalone green hydrogen manufacturing unit in Kochi and then they will ply hydrogen fuelled bus transportation services between Kochi airport and Thiruvanthpuram.
- Larsen and Toubro (L&T)
The engineering major L&T has also entered the Green hydrogen revolution with an announcement of setting up a green hydrogen plant at Hazira complex probably in this financial year. The company is also planning to put few more hydrogen plants in other manufacturing units. They are also working on the possibilities of manufacturing electrolysers.
Recently, L&T announced that it aims to be net zero emissions by 2040, out of which 90% of it includes switching over to renewable energy, green hydrogen and biodiesel while other 10% includes creation of carbon sinks.
Hurdles in the path of Green Revolution:
The biggest hurdle which is hindering the Hydrogen producing companies all over the world is the cost of electrolysers used in production of hydrogen. But with the increase in demand of hydrogen all over the world will boost hydrogen production and as a result of it, cost of electrolysers can be overcome.
Another hurdle is the transportation of Hydrogen Fuel. The gas needs to be cooled to -252 °C before transportation. From scientific point of view, Hydrogen is the lightest gas in periodic table so it can easily escape in the atmosphere so in case of gas leakage there are chances of loss of gas.
Experts have been working on it to overcome the hurdles and soon come up with alternative ways.
Recommendations:
Considering the steps taken by GOI to boost Green Hydrogen and aggressive participation of companies in it, stocks of RIL, GAIL, NTPC, IOCL and L&T are recommended to buy or hold for a long term period to get best returns in future.
- Het Zaveri
(Disclosures : At the time of writing this article, author, his clients & dependent family members may have positions in the stocks mentioned above. The author, his firm, his clients or any of his dependent family members may make purchases or sale of the securities mentioned in website. Author may have positions in above stocks so have vested interest obviously in their going up or down as the case may be.
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