“If a fool would persist in his folly, he would be wise,” the British romantic poet William Blake once remarked.
Blake’s pithy observation applies equally to technological progress and investment success. In other words, many “foolish” ideas – and investments – become brilliant… eventually.
I highlight several fascinating examples of this in the new Fry’s Investment Report issue, including the first electric vehicle (more than 100 years ago) and early use of solar power (even longer ago). Both were huge flops at the time but are now megatrends changing the world.
This breed of foolishness also enabled the early days of commercial air travel. In 1895, Count Ferdinand von Zeppelin patented his hydrogen-filled “airship” design. Fifteen years later, “zeppelin” airships would begin their first commercial flights. The initial routes transported passengers over short hops from Berlin to other German cities.
From that modest beginning, subsequent zeppelin designs increased in sophistication and size until they started flying longer distances… much longer distances.
But when one thinks zeppelin, one immediately thinks of the 804-foot-long airship, the LZ 129 Hindenburg, which crossed the Atlantic 17 times before its final flight ended tragically on May 6, 1937. On that date, the Hindenburg burst into flames while docking in Manchester Township, New Jersey. Thirty-five passengers perished… as did the entire commercial airship industry.
That spectacular disaster brought an immediate end to the era of hydrogen-oriented transport. The highly combustible Element No. 1 on the periodic table was simply too volatile for its own good.
In hindsight, the idea of transporting passengers beneath a gigantic balloon full of explosive gas seems as foolish as any idea ever imagined. The passenger cabin of the Hindenburg even included a “Smoking Lounge.”
But using hydrogen for lift is quite different than using it for propulsion. As a propellant – i.e., as a fuel – hydrogen has unique capabilities, which is why a new hydrogen era has arrived…
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Eighty-five years after the Hindenburg, hydrogen is looking like a wise way to transition some modes of transportation away from fossil fuels.
For starters, hydrogen has the highest energy content of any fuel. By mass, it has nearly three times the energy content of gasoline.
Additionally, hydrogen is an ideal green fuel. When combusted, it does not release any of the toxic compounds that fossil fuels do. It releases harmless water vapor. Similarly, hydrogen produces zero harmful emissions when used electrochemically in a fuel cell.
Finally, a big part of hydrogen’s appeal is its squeaky-clean versatility (I also elaborate more on this in the latest issue of Fry’s Investment Report, which you can learn how to access here). It is like the ideal party guest who gets along with everyone in the room.
Because of this key feature, private enterprises and governments are spending billions to advance this technology from theory to practice as quickly as possible.
New legislative initiatives in both the United States and Europe have changed the game completely for the green hydrogen industry. With the stroke of a political pen, green hydrogen has advanced from a kitschy clean-tech hobby to one of the most compelling technologies in the renewable energy industry.
To underscore the magnitude of this makeover, consider the massive benefits the new Inflation Reduction Act will bestow on the hydrogen industry.
According to new research from Bloomberg New Energy Finance, the tax credits and subsidies this act provides are so significant that they could reduce the cost of producing green hydrogen to zero… or even less than zero.
That’s a game changer.
To be clear, I am neither applauding nor condemning the Inflation Reduction Act. Politics is not our beat here. Investment opportunity is.
I don’t care about the new act’s silly name, nor about the fact that it became law by way of a partisan, party-line vote. I only care that it may be supercharging a massive new investment opportunity.
Meanwhile, over in the Old World, a bevy of government programs are supercharging European-based green hydrogen production…
Going Green Around the World
In July, for example, the first funding round of Important Projects of Common European Interest (IPCEI) allocated 5.4 billion euros to green hydrogen projects. This funding round kicked off 41 projects in 15 countries. An additional 8.8 billion euros in private investments will likely piggy-back this government funding.
Prior to this pan-European initiative, Germany had announced plans to allocate 9 billion euros from its coffers to help advance 62 green hydrogen projects. Likewise, France had previously launched a 7-billion-euro plan to support domestic green hydrogen production.
Because of the spontaneous global surge of interest and investment in green hydrogen, this industry has embarked on a growth trajectory of freakishly large proportions. Most of the growth estimates are so large that the analysts making them might as well just say “a whole bunch of growth.”
According to a variety of forecast scenarios, global hydrogen consumption will grow about sixfold by 2050, with green hydrogen growing by 500-fold. Nothing grows 500-fold; that’s an increase of nearly 50,000%!
But if the global green hydrogen market is such a spectacular growth boom, leading companies in the industry will book major profits along the way.
Now that the green hydrogen era is out of the canister, it’s not going back inside.
Regards,
Eric
Eric Fry is an award-winning stock picker with numerous “10-bagger” calls — in good markets AND bad. How? By finding potent global megatrends… before they take off. In fact, Eric has recommended 41 different 1,000%+ stock market winners in his career. Plus, he beat 650 of the world’s most famous investors (including Bill Ackman and David Einhorn) in a contest. And today he’s revealing his next potential 1,000% winner for free, here.
