Morrien's Stock Market News Equinor - Norwegians are betting on green and blue hydrogen

Increased CO2 emissions call for new transport solutions. In my opinion, a hydrogen engine with a fuel cell is the perfect solution for the transportation of heavy loads - in these cases, batteries are often too big, heavy, and too slow to recharge. Ships, trucks and trains should therefore gradually convert to fuel cell technology.

Illustration/Equinor
Offshore-Windpark Hywind Tampen
Illustration/Equinor

 

Equinor: From Saul to Paul in the Energy Sector

The market-listed, semi-state-owned corporation from Norway has become an energy giant thanks to its traditional oil and gas business. Under the old name Statoil, the company has for decades made the state of Norway - as well as its free shareholders - happy with profits in the billions, as well as lavish dividends. Equinor's strategists recognized very early on that oil and gas production cannot remain their only business model. Therefore, pragmatic solutions were created in Norway.

 

SOLUTION 1:

Producing Our Own Green Electricity for the Production of Green Hydrogen

However, from an ecological point of view, there's a problem: hydrogen only works in reducing pollution if no "dirty" electricity is used for production; instead, the process calls for green electricity (such as wind or solar energy) in order to be efficient. However, there are still too few of these kinds of energy sources, and the costs are still too high - although they are expected to be halved in the next ten years as a result of technical progress. A company from Norway, called Equinor, is now offering a solution to this problem.

Financed by billions in profits from its traditional oil and gas business, Equinor is now building a new green power empire and investing massively in wind farms and solar plants. Equinor operates three large wind farms in the UK and is involved in other projects off the coast of the UK, in Germany, and the USA. Last year, Equinor's European wind turbines were already sufficient to supply the equivalent of more than one million households with electricity. This proficient pipeline project ensures that Equinor will be able to generate significantly more green electricity from wind power in the future.

Equinor's core competence is wind energy, but solar energy is also part of its portfolio. The Norwegians have implemented two major solar projects in Brazil and Argentina. However, they're not just investing in the direct production of solar power. In 2016, Equinor had already begun investing in Oxford Photovoltaics, which aims to increase the efficiency of solar cells by 20 to 30 percent. It's therefore also investing in green technology.

 

SOLUTION 2:

Blue Hydrogen as an Intermediate Solution and a Quickly Available Alternative

Despite its many advantages, green hydrogen is not yet available in sufficient quantities due to the reasons mentioned above. So Equinor has also established the "blue hydrogen" approach. While green hydrogen is the best solution from an ecological point of view because it's made with green energy, blue hydrogen is produced from natural gas. This process generates CO2. The pragmatic solution to the problem would be to store the CO2 that's produced, instead of releasing it into the air.

Conclusion: The combination of green and blue hydrogen ensures that technically superior fuel cell technology can be used on a large scale in the near future. Equinor is financing this successful energy transition in its early phases with the billions in profits it generated from the classic oil and gas business. The Norwegian state and private Equinor shareholders can therefore continue to look forward to high profits and generous dividends. 

 

About the Author:

Since 2002, the analyst Rolf Morrien is editor in chief of the investor service "Der Depot-Optimierer" and author of the books "Wie lege ich 10.000 Euro optimal an" and "Börse leicht verständlich".