Fusion Fuel - New Reseach sees 150% upside
Hannam Partners research published 6/3/24
Fusion Fuel
Initiation: Green Hydrogen – Endless energy
We initiate on Fusion Fuel Green plc (NASDAQ:HTOO, “Fusion Fuel”, “FF”) with a
target valuation of US$4.26/sh, offering 151% upside. FF is poised to benefit from
growing demand for green hydrogen, a key enabler of the energy transition. FF’s core
product is the HEVO, a miniaturised Proton Exchange Membrane (“PEM”) electrolyser.
FF develops in-house technology and has commercial sales from its Benavente
facility in Portugal, with €4.1m of revenue reported for FY23A. FF aims to be cash flow
positive by YE’25, needing ~60MW pa in electrolyser sales. Benavente is sized for
output of 500 MW pa, allowing growth in-line with demand, with modest incremental
capex. FF’s target niche is small-to-midscale hydrogen developments (up to 10MW),
and related services such as engineering and procurement. This is enhanced by a
pipeline of green hydrogen projects sitting within Special Purpose Vehicles (“SPV”)
which FF plans to sell to third-party funding partners, driving future HEVO sales.
A Transformative Technology: the HEVO
FF stands out amongst electrolyser peers due to an innovative membrane electrode
assembly (“MEA”), which is smaller and thinner than in conventional PEM systems,
and its unique ‘stack-less’ design, with the 16 electrochemical cells in the HEVO each
operating independently. The modular HEVO architecture enables cost-competitive
solutions at any scale and for various applications, such as mobility, small industrial
plants and small to mid-size gas blending. Moreover, FF’s technology enables a
decentralised green hydrogen solution, with multiple down-sized facilities installed
closer to points of use, offering logistical advantages by eliminating the need for
costly transportation and storage.
Key facilitator of green energy transition
Hydrogen is a versatile energy carrier, mainly used in refining and the chemical
sectors; however, traditional production methods, such as steam methane reforming,
are highly carbon intensive. In 2022, hydrogen production emitted over 900 Mt of CO2.
As such, green hydrogen - produced via electrolysis of water using renewable energy
sources - has gained prominence as a key enabler of the transition to sustainable
energy, particularly in the decarbonisation of “hard-to-abate” industries.
Global green hydrogen momentum to drive electrolyser demand
Momentum behind hydrogen is strong, exemplified by a growing project pipeline and
the number of national hydrogen strategies (43 as of 2023). Green hydrogen demand
is expected to grow rapidly, with the IEA forecasting “low-emission” hydrogen output
could reach 38 Mtpa in 2030 (including ~25Mtpa of green hydrogen) vs ~1Mt in 2023.
Nonetheless, developing a green hydrogen economy requires ongoing national
efforts to stimulate demand and provide incentives to decarbonise, while simplifying
permitting and licensing routes. FF's recent success in securing grants from IPCEI and
the Horizon Europe Programme highlights the EU’s drive towards this goal.
Risked valuation US$4.26/sh offering 151% upside potential
We use a 10% WACC to reach a DCF-based unrisked NAV for FF of €149m (US$9.3/sh).
We apply a target P/NAV of 0.5x to reflect uncertainty around the sales ramp-up,
dependent on SPV partnerships and filling an estimated ~€18m funding gap over the
next 24 months. Adjusting for SG&A and Dec’24E net debt we arrive at a target
valuation of US$4.26/sh, 151% above the current share price. FF is exploring further
strategic funding options having raised US$6.4m in equity through its at-the-market
(“ATM”) programme during Feb’24. A US$20m convertible facility is available from
Macquarie as a back-up albeit with a high implicit cost of capital (see pg 20). As such,
we see strengthening of the balance sheet as a potential catalyst for a re-rating of FF
shares, alongside the sale of the Sines 1 project and meeting revenue growth targets.
Fusion Fuel
Initiation: Green Hydrogen – Endless energy
We initiate on Fusion Fuel Green plc (NASDAQ:HTOO, “Fusion Fuel”, “FF”) with a
target valuation of US$4.26/sh, offering 151% upside. FF is poised to benefit from
growing demand for green hydrogen, a key enabler of the energy transition. FF’s core
product is the HEVO, a miniaturised Proton Exchange Membrane (“PEM”) electrolyser.
FF develops in-house technology and has commercial sales from its Benavente
facility in Portugal, with €4.1m of revenue reported for FY23A. FF aims to be cash flow
positive by YE’25, needing ~60MW pa in electrolyser sales. Benavente is sized for
output of 500 MW pa, allowing growth in-line with demand, with modest incremental
capex. FF’s target niche is small-to-midscale hydrogen developments (up to 10MW),
and related services such as engineering and procurement. This is enhanced by a
pipeline of green hydrogen projects sitting within Special Purpose Vehicles (“SPV”)
which FF plans to sell to third-party funding partners, driving future HEVO sales.
A Transformative Technology: the HEVO
FF stands out amongst electrolyser peers due to an innovative membrane electrode
assembly (“MEA”), which is smaller and thinner than in conventional PEM systems,
and its unique ‘stack-less’ design, with the 16 electrochemical cells in the HEVO each
operating independently. The modular HEVO architecture enables cost-competitive
solutions at any scale and for various applications, such as mobility, small industrial
plants and small to mid-size gas blending. Moreover, FF’s technology enables a
decentralised green hydrogen solution, with multiple down-sized facilities installed
closer to points of use, offering logistical advantages by eliminating the need for
costly transportation and storage.
Key facilitator of green energy transition
Hydrogen is a versatile energy carrier, mainly used in refining and the chemical
sectors; however, traditional production methods, such as steam methane reforming,
are highly carbon intensive. In 2022, hydrogen production emitted over 900 Mt of CO2.
As such, green hydrogen - produced via electrolysis of water using renewable energy
sources - has gained prominence as a key enabler of the transition to sustainable
energy, particularly in the decarbonisation of “hard-to-abate” industries.
Global green hydrogen momentum to drive electrolyser demand
Momentum behind hydrogen is strong, exemplified by a growing project pipeline and
the number of national hydrogen strategies (43 as of 2023). Green hydrogen demand
is expected to grow rapidly, with the IEA forecasting “low-emission” hydrogen output
could reach 38 Mtpa in 2030 (including ~25Mtpa of green hydrogen) vs ~1Mt in 2023.
Nonetheless, developing a green hydrogen economy requires ongoing national
efforts to stimulate demand and provide incentives to decarbonise, while simplifying
permitting and licensing routes. FF's recent success in securing grants from IPCEI and
the Horizon Europe Programme highlights the EU’s drive towards this goal.
Risked valuation US$4.26/sh offering 151% upside potential
We use a 10% WACC to reach a DCF-based unrisked NAV for FF of €149m (US$9.3/sh).
We apply a target P/NAV of 0.5x to reflect uncertainty around the sales ramp-up,
dependent on SPV partnerships and filling an estimated ~€18m funding gap over the
next 24 months. Adjusting for SG&A and Dec’24E net debt we arrive at a target
valuation of US$4.26/sh, 151% above the current share price. FF is exploring further
strategic funding options having raised US$6.4m in equity through its at-the-market
(“ATM”) programme during Feb’24. A US$20m convertible facility is available from
Macquarie as a back-up albeit with a high implicit cost of capital (see pg 20). As such,
we see strengthening of the balance sheet as a potential catalyst for a re-rating of FF
shares, alongside the sale of the Sines 1 project and meeting revenue growth targets.
NordicGuy
09.04.2024 kl 10:23
230
From Fusion Fuel yestarday on LInkedin:
Fusion Fuel
Fusion FuelFusion Fuel
10,301 followers10,301 followers
16h • 16h •
We are thrilled to announce that we have begun the installation and commissioning of 15 #HC-Cubes at our client’s facility in in #Toledo, Spain. This marks the inaugural delivery of our #HEVO-Chain system to a third-party customer, a pivotal milestone in the commercialization of our next-gen green hydrogen solution and for our company more broadly.
The installation of this 300-kW system, which includes the 15 #Cubes and associated balance of plant equipment, underscores the growing demand for modular, customizable green hydrogen solutions. Our decentralized, building-block approach offers unparalleled speed in delivery and deployment compared to larger scale systems and enables our customers to move the needle on decarbonization in a matter of months.
We would like to extend our appreciation to all the teams involved in helping make this possible. Next up: final commissioning and startup, which we are targeting for later this month.
https://www.linkedin.com/posts/fusion-fuel_hc-toledo-hevo-activity-7183127979714109440-sYB3?utm_source=share&utm_medium=member_desktop
Fusion Fuel
Fusion FuelFusion Fuel
10,301 followers10,301 followers
16h • 16h •
We are thrilled to announce that we have begun the installation and commissioning of 15 #HC-Cubes at our client’s facility in in #Toledo, Spain. This marks the inaugural delivery of our #HEVO-Chain system to a third-party customer, a pivotal milestone in the commercialization of our next-gen green hydrogen solution and for our company more broadly.
The installation of this 300-kW system, which includes the 15 #Cubes and associated balance of plant equipment, underscores the growing demand for modular, customizable green hydrogen solutions. Our decentralized, building-block approach offers unparalleled speed in delivery and deployment compared to larger scale systems and enables our customers to move the needle on decarbonization in a matter of months.
We would like to extend our appreciation to all the teams involved in helping make this possible. Next up: final commissioning and startup, which we are targeting for later this month.
https://www.linkedin.com/posts/fusion-fuel_hc-toledo-hevo-activity-7183127979714109440-sYB3?utm_source=share&utm_medium=member_desktop
NordicGuy
20.03.2024 kl 13:53
321
Hannam Partners summary of Today Grant Approval Announcement
Fusion Fuel: Announced that it has received provisional approval from the Portuguese government for an estimated €5m in grant funding to support the development of a 25 MW green hydrogen project located in Aveiro, Portugal (Link)
The grant approval was awarded as part of the second funding call of the Component 14 grant program which is focused on accelerating the energy transition by supporting the production of hydrogen and other renewable gases
The Company is also involved in a second submission for a 10 MW green hydrogen project, led by a Portuguese industrial company, which has also received funding approval. In total, there were 21 proposals that received provisional approval through the C-14 program
Fusion Fuel: Announced that it has received provisional approval from the Portuguese government for an estimated €5m in grant funding to support the development of a 25 MW green hydrogen project located in Aveiro, Portugal (Link)
The grant approval was awarded as part of the second funding call of the Component 14 grant program which is focused on accelerating the energy transition by supporting the production of hydrogen and other renewable gases
The Company is also involved in a second submission for a 10 MW green hydrogen project, led by a Portuguese industrial company, which has also received funding approval. In total, there were 21 proposals that received provisional approval through the C-14 program
NordicGuy
20.03.2024 kl 11:51
339
Fusion Fuel Receives Provisional Grant Approval for 25 MW HEVO-Aveiro Green Hydrogen Project
Fusion Fuel Receives Provisional Grant Approval for 25 MW HEVO-Aveiro Green Hydrogen Project
Mar 20, 2024 5:00 AM EDT
Download PDF
SABUGO, Portugal, March 20, 2024 (GLOBE NEWSWIRE) -- Fusion Fuel (NASDAQ: HTOO) (the “Company”) announced today that it has received provisional approval from the Portuguese government for an estimated €5 million in grant funding to support the development of a 25 MW green hydrogen project located in Aveiro, Portugal. The grant approval was awarded as part of the second funding call of the Component 14 (“C-14”) grant program which is focused on accelerating the energy transition by supporting the production of hydrogen and other renewable gases. The Company is also involved in a second submission for a 10 MW green hydrogen project, led by a Portuguese industrial company, which has also received funding approval. In total, there were 21 proposals that received provisional approval through the C-14 program.
Fusion Fuel’s HEVO-Aveiro project envisions a 25 MW green hydrogen facility using the Company’s proprietary HEVO-Chain technology along with associated balance of plant equipment. The plant would produce an estimated 2,100 tonnes of green hydrogen per annum, which is expected to be used for industrial process heat by the local ceramic industry in Aveiro, Portugal.
Pedro Caçorino Dias, Fusion Fuel’s Head of Commercial for Portugal, stated, “Fusion Fuel continues to be recognized as a leader in the Portuguese green hydrogen industry. This marks the second such award Fusion Fuel has received through C-14 program, having previously secured €10 million in grant funding for our HEVO-Industria project in Sines, Portugal. Furthermore, we can also share that our HEVO-Aveiro project earned the highest assessment among all hydrogen projects submitted to the funding call, which is a testament to the exceptional talent of our front-end design team and the strength of our overall value proposition. We see decarbonizing high-heat industrial processes as a very attractive use-case for green hydrogen, particularly for a low-pressure system like our HEVO-Chain solution. In addition to hydrogen mobility, process heat is a segment of the market which we expect will drive significant growth while the broader hydrogen opportunity matures.”
About Fusion Fuel Green plc
Fusion Fuel is rapidly emerging as a leader in the green hydrogen sector committed to accelerating the energy transition through the development of disruptive, clean hydrogen solutions. Fusion Fuel’s patented miniaturized Proton Exchange Membrane (PEM) electrolyzer, the HEVO, and building-block approach to green hydrogen production, unlock unprecedented modularity and flexibility in the design and deployment of cost-competitive, decentralized green hydrogen solutions. Its business lines include the sale of its proprietary electrolyzer technology, the provision of hydrogen engineering and advisory services, the origination and development of turnkey green hydrogen plants, and the sale of green hydrogen as a commodity to end-users through long-term hydrogen purchase agreements. Learn more about Fusion Fuel by visiting our website at https://www.fusion-fuel.eu, and by following us on LinkedIn.
Fusion Fuel Receives Provisional Grant Approval for 25 MW HEVO-Aveiro Green Hydrogen Project
Mar 20, 2024 5:00 AM EDT
Download PDF
SABUGO, Portugal, March 20, 2024 (GLOBE NEWSWIRE) -- Fusion Fuel (NASDAQ: HTOO) (the “Company”) announced today that it has received provisional approval from the Portuguese government for an estimated €5 million in grant funding to support the development of a 25 MW green hydrogen project located in Aveiro, Portugal. The grant approval was awarded as part of the second funding call of the Component 14 (“C-14”) grant program which is focused on accelerating the energy transition by supporting the production of hydrogen and other renewable gases. The Company is also involved in a second submission for a 10 MW green hydrogen project, led by a Portuguese industrial company, which has also received funding approval. In total, there were 21 proposals that received provisional approval through the C-14 program.
Fusion Fuel’s HEVO-Aveiro project envisions a 25 MW green hydrogen facility using the Company’s proprietary HEVO-Chain technology along with associated balance of plant equipment. The plant would produce an estimated 2,100 tonnes of green hydrogen per annum, which is expected to be used for industrial process heat by the local ceramic industry in Aveiro, Portugal.
Pedro Caçorino Dias, Fusion Fuel’s Head of Commercial for Portugal, stated, “Fusion Fuel continues to be recognized as a leader in the Portuguese green hydrogen industry. This marks the second such award Fusion Fuel has received through C-14 program, having previously secured €10 million in grant funding for our HEVO-Industria project in Sines, Portugal. Furthermore, we can also share that our HEVO-Aveiro project earned the highest assessment among all hydrogen projects submitted to the funding call, which is a testament to the exceptional talent of our front-end design team and the strength of our overall value proposition. We see decarbonizing high-heat industrial processes as a very attractive use-case for green hydrogen, particularly for a low-pressure system like our HEVO-Chain solution. In addition to hydrogen mobility, process heat is a segment of the market which we expect will drive significant growth while the broader hydrogen opportunity matures.”
About Fusion Fuel Green plc
Fusion Fuel is rapidly emerging as a leader in the green hydrogen sector committed to accelerating the energy transition through the development of disruptive, clean hydrogen solutions. Fusion Fuel’s patented miniaturized Proton Exchange Membrane (PEM) electrolyzer, the HEVO, and building-block approach to green hydrogen production, unlock unprecedented modularity and flexibility in the design and deployment of cost-competitive, decentralized green hydrogen solutions. Its business lines include the sale of its proprietary electrolyzer technology, the provision of hydrogen engineering and advisory services, the origination and development of turnkey green hydrogen plants, and the sale of green hydrogen as a commodity to end-users through long-term hydrogen purchase agreements. Learn more about Fusion Fuel by visiting our website at https://www.fusion-fuel.eu, and by following us on LinkedIn.