Renewable Energy: Green Hydrogen And Decade Ahead!

Green Hydrogen And Future Investment Themes!

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In a quest to have more and more from mother earth, humans have always abused it. Effects of this act have started showing no mercy on humans now in the form of climate changes, global warming, melting icebergs, and floods in every corner of the earth.

This is the final chance to stop saying and start doing things that will stop hurting the earth and weather. Finally, countries under the Paris Climate Agreement are starting to get their act together and setting their carbon-free (net zero) goals. 

So what this big change is going to bring in the investment and finance domain? Let's dig it out.

However, before doing so let's understand how these net-zero goals are going to be achieved by the countries. Because few countries are still heavily using coal as the primary source of their energy production.

Green Hydrogen is the answer to meet the net-zero goal for the world. 

What is green hydrogen and how it is produced?

Green Hydrogen is a carbon-free source of energy that is produced by renewable energy. This means green hydrogen is produced using an electrolysis process in which Oxygen gets split from Hydrogen of water(H2O). The electrolysis process should be completed using renewable energy sources such as wind or solar power and not coal. 

Hydrogen produced by this process is known as Green Hydrogen. Reliance Industries recently declared their goal of becoming net zero in 2035. Mukesh Ambani is said to be investing about $75 Billion in the Green Hydrogen domain and will be generating 1 Kilo Green Hydrogen per dollar. 

But for providing Green Hydrogen at affordable prices is a challenge and for doing what Reliance said electrolyser’s prices have to be low. Keep an eye on electrolysis companies listed on the stock market.

Indian companies like NTPC, Adani group and Indian Oil has also been in the domain of Green Hydrogen.

The Decade Ahead

There are tremendous investment opportunities in this area of renewable energy, Green Hydrogen and batteries. Companies working in these businesses own the coming decade. All globe is entering in the businesses of clean power and electric vehicles so investors should also find the companies for investment in this area.

Though a lot of companies are entering in this area not all of them will be successful so investors have to be selective and only after doing fundamental analysis should they invest in the companies. 

Tesla is also trying to enter the Indian market and having discussions on taxes in India. Elon Musk said he wants to test the demand for his electric cars in the Indian market first and if all is well he will manufacture Tesla EV’s from India.

Tata Motors is going to be the Indian Tesla in the electric vehicle segment. The company has great potential to tap the Indian EV market and also is a trusted brand in India. Tata is a true conglomerate in all the sectors of this and coming decade. 

Tata Motors are producers of Electric Vehicles. Tata Motor DVR is the listed Differentiated Voting Rights company of Tata Motors.

Tata Power is in the business of charging stations. Tata’s this wing has also signed an agreement with different housing apartments and other companies to provide charging stations facility so its a huge opportunity. Tata Power is not active only in charging stations but also in solar panel installations over the roofs all over India. They are the largest providers of rooftop solar panels.

Tata chemicals is in the business of producing lithium-ion batteries; the primary component of electric vehicles. 

Petroleum companies like HPCL and Indian Oil have also signed a deal with EV charging stations and battery swapping. 

Right Time 

This time we can't expect sharp returns like we got when the market was down due to the covid pandemic. US Federal Reserve's announcement of an interest rate hike, increasing bond yields, and price increment of oil barrels. The Russian President’s actions on Ukraine is also a prime reason the market can react on. These are the current reasons why investors are pulling their money out of Indian markets. 

Once investors get a clear understanding of the rate hikes in March, they will come back to markets to buy equities. December quarter’s corporate earning results are good so far hence there is not much cut in markets. 

Cryptocurrencies have seen a heavy fall from their all-time highs and are getting stable slowly. Bitcoin was considered to be a hedging shield for equities but that is not true anymore. Hence for investors to invest the money at the right time becomes extremely important.

The Indian Government’s budget 2022 announcement of 30% taxes on cryptocurrency has set the path for Indians to invest in crypto. The taxes are higher because the government wants people to buy Digital Rupee which will be developed by RBI based on blockchain technology and not other cryptos.

Themes For Investing In Decade

  1. Green Hydrogen

  2. Renewable Energy

  3. Electric Vehicles

  4. Metaverse Related Stocks

  5. Metaverse Related Gaming Cryptos

  6. NFT(Creators, Buyers)

  7. Real Estate

  8. Technology, Semiconductor & Cloud Companies

If we do our due diligence and invest in stocks related to the above themes, we may get good returns in the long term. 

Indian investors who are active in the Indian Stock Market can now look beyond India in the US market to diversify their portfolios. It provides dual advantages;

1. History has shown that US market growth has been faster compared to India.

2. Investors will get currency appreciation as we invest our money in dollars. 

Let me know in the comments section, if you agree with me and if you have any other themes to invest in.

In the next post, we will be looking at NFT and related online gaming cryptos.

DISCLAIMER: This post is purely and only for educational purposes. We are not SEBI registered consultants and do not recommend anyone to invest in any stock. Kindly consult with your financial advisor before making any investment decision.

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