Mundus Nordic Green News – 24 February, 2021

Nel seeks to raise over NOK 1 billion in new capital

The Norwegian hydrogen supply chain supplier, Nel announced on Wednesday that it will issue new shares through an accelerated book-building process. At current prices, Nel is expected to raise NOK 1.3 billion. In a press release Nel writes that “it continues to experience strong momentum in the hydrogen industry, with fast-growing focus on green hydrogen driven by rapid fall in the cost of renewable energy and strong focus on green hydrogen from various governments. The global hydrogen momentum is evidenced through several larger project announcements within a variety of end-market applications, highlighting the opportunities facing Nel as one of the leading players within green hydrogen. The net proceeds from the Private Placement will allow the Company to pursue larger - and higher volume of projects as well as strategic opportunities. In addition, the Company will further build the organization, invest in R&D activities, and fund additional working capital requirements, as well as general corporate purposes.

 

Separately, analysts at JP Morgan, the US investment bank, said “We believe a hydrogen revolution is quickly gathering momentum to drive energy transition across several ‘hard-to-abate’ sectors. However, investors should also be wary of over-optimism given H2 adoption for some end-uses appears more challenging and less economic versus other low-CO2 alternatives.” The analysts said they believe investing in hydrogen is “likely to remain challenging”, both with major corporates and smaller hydrogen-focused companies. JP Morgan gave Nel a neutral rating.

 

Analyst: Nordic region wont run out of power, but prices could rise 15%

In the last week, plans have been announced for hydrogen plants in the Nordic region with a consumption of 2.3 GW from the mid-2020s, with the hydrogen then used to produce ammonia and steel. Some have fears that this will lead to an electricity shortage. But one analyst says the plans are realistic, and the Nordic region will not run out of power, but that it could raise prices by around €4/MWh. THEMA Consulting Group analyst Marius Holm Rennesund states that it is uncertain how many of the projects will actually be realized, but that the four projects could eat a lot of the Nordics power surplus. Still he believes that the Nordic region will maintain a power surplus and thus still have lower power prices than in Germany. The Nordic 2025 contract is currently at €28/MWh, while the corresponding German contract is traded at around 49 €/MWh.

 

Power trader Tommy Persson from Modity believes that the energy needs of H2 Green Steel and other industrial initiatives will be covered by new production, mainly wind power. “With such large industrial investments with a green profile, it is guaranteed that the power needs will be covered with long-term PPA contracts from newly built wind farms in the same price range. These investments mean that the development of wind power is faster and removes the risk posed by slow grid development as the establishments are "close" to the wind farms, he writes in an email to Montel. Therefore he does not believe that the industrial investments will have any major effects on power prices and Modity will continue to base its price expectations on the investment cost for wind power. “We thus maintain our previous forecasts where we believe increased demand will be met by increased supply. As we see it, there is great potential for building more land-based wind power in the Nordic region.”

 

Swedish shipping company wants to build the world's first wind-powered car transport ship

Last year it was announced that the shipbuilding industry consulting company SSPA and the Royal Institute of Technology (KTH), had developed a completely new concept for wind-powered vessels. The project, named Oceanbird, is a groundbreaking design for a large modern sailing cargo ship. By being equipped with a completely new type of folding up and down "sail", the goal is for the new ship, which is intended to be 200 meters long and be able to carry the equivalent of 7,000 cars, mainly with the help of the wind and thus up to 90% less emissions compared to today's oil-powered car transport vessels. The shipping group Wallenius Wilhelmsen now aims to get such a ship built and putting it into service by 2025. "Our plan is to work intensively with Wallenius Marine on this and to have a final design ready to order from shipyards already in 2022 and a finished ship in 2025," said Craig Jasienski, CEO of Wallenius Wilhelmsen.

 

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