Hedge fund boss slams hydrogen bets as ‘complete waste of time’

afr.com:

Hydrogen is a losing bet for investors interested in making money in the foreseeable future, according to Barry Norris, the founder and chief investment officer of UK hedge fund Argonaut Capital Partners.

“It’s a complete waste of time, unfortunately,” London-based Mr Norris said in an interview.

Hopes are high for green hydrogen exports from Australia. Bloomberg

The Argonaut CIO said he was “sceptical that the business models of a lot of these companies will work”. That’s why he’s built “a few shorts in hydrogen”, he said, referring to bets that share prices will fall. He declined to specify which companies his short positions target.

It is the latest salvo in a controversial corner of green technology that, depending on who is asked, is either a crucial piece in the puzzle to reduce greenhouse gas emissions or an over-priced, over-hyped distraction. For now, even card-carrying hydrogen evangelists are having to take a few steps back, as they await detailed guidance on how to take advantage of subsidies locked in the US Inflation Reduction Act.

Hydrogen, the basic chemical element that fuels the sun, has the potential to generate energy with hardly any carbon emissions. But unlike solar power or wind, hydrogen first needs to be extracted. That can be done in a number of ways, some of which are cleaner than others. For now, the most common (and cheapest) forms of production rely on fossil fuels.

The cleanest form is known as green hydrogen, whereby an electrolyser powered by renewable energy is used to split water into hydrogen and oxygen. But that process is costly, which is why a lot of investors are sceptical. Other challenges include storing it in a way that makes its use viable for things like moving vehicles.

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