Green hydrogen will be playing a major role in the energy transition to a zero-emissions economy. For sustainable investors, this offers ample opportunities, both in terms of sustainable impact and financial return. Dutch energy specialist WindShareFund is therefore launching a promising new hydrogen investment fund: FutureEnergyFund. This renewable energy investment provides exposure to the upside potential of this revolutionary clean energy, with relatively low investment risks.
- Sustainability pioneers flock to hydrogen investment funds
- Green hydrogen is indispensable in the energy transition, but its production is expensive
- Much can be achieved through technological innovation, offering an attractive opportunity for sustainability investors
Attractive hydrogen investment fund for sustainability investors
Considerable investment in hydrogen technology is required to make hydrogen into one of the major green solutions in the energy transition. This makes green hydrogen an attractive investment for sustainability investors. FutureEnergyFund of WindShareFund invests directly in companies that are working on hydrogen solutions.
Making energy-intensive sectors more sustainable
Green hydrogen offers unprecedented opportunities to make energy-intensive sectors, such as steel and shipping, more sustainable. These heavy industries are dependent on fossil fuels and are currently struggling to become CO2-free. Hydrogen is the ideal alternative.
The difference between grey and green hydrogen
Electrolysis, in which water is split into hydrogen and oxygen, is usually the procedure by which hydrogen is produced. The process requires water, a large electrolysis plant and a lot of electricity. If the electricity comes from renewable sources, the hydrogen is green. Most hydrogen however is still produced using fossil fuels; we call it grey hydrogen to differentiate it from truly sustainable green hydrogen.
Green hydrogen is still expensive
Green hydrogen is still considerably more expensive (3 to 6 euros per kg) than grey hydrogen (1 euro per kg). This is because there is still a lack of (cheap) sustainable energy available for the production of hydrogen. In addition, the efficiency, pricing and production of electrolysis units must be considerably improved.
Political and social focus on green hydrogen
The political and social pressure to start large scale production of green hydrogen is mounting. The EU is giving hydrogen a major role in the so-called Green Deal, which aims to render Europe CO2-neutral by 2050. Green hydrogen is crucial to achieve the goals in the energy transition. This implies that there will be substantial investments in this clean energy segment. With the election of President Biden, it is also All Hands On Deck in the US. The Americans are focusing on technologies that will enable the economy to make the transition to (green) hydrogen. There are ambitious plans to greatly increase the production of green hydrogen and to lower the price by a factor of two or three.
Negative interest rates erode savings
Wealthy individuals are currently confronted with two major trends: negative interest rates and a major shift towards more sustainable investments. Major banks are now charging negative interest on large savings deposits. If you also take inflation into account, not a single saver is currently earning anything from their money.
Sustainable investment on the rise
Investing is the only option to put cash to work in the positive sense. However, the investment sector has also changed completely. Sustainable investment is strongly on the rise. This is not only because more and more investors want to achieve a sustainable impact, but also because sustainable investment has increasingly more to offer in terms of financial returns.
Green hydrogen: sustainable impact and financial return
Given the large and wide-ranging supply, it is becoming increasingly important to make a good selection of sustainable investments. The energy transition - the application of clean energy - is one of the most important themes in this respect and within this, green hydrogen is one of the most promising, in terms of sustainable impact and financial return.
Green hydrogen offers investment potential
Green hydrogen clearly offers great investment potential. The energy transition desperately needs this clean source of energy. However, much is still in the development phase and that means the risks for investors are usually on the higher side. Smart diversification can limit the risks, and that is exactly what FutureEnergyFund of WindShareFund does.
Fixed rate energy bonds
The fund aims to limit the risks first of all by opting for an investment structure of 100% sustainable energy bonds with a fixed interest rate of 7.5%. This offers some security for investors.The fund invests partially in companies that develop green hydrogen technology, with an emphasis on the development and improvement of electrolysers to produce green hydrogen at lower costs.
Investing in solar and wind power
To spread risk and ensure a steady income flow from which interest payments can be made, the fund also invests in solar and wind power generation in Germany. Moreover, such more traditional sustainable investments continue to be badly needed to ensure sufficient (cheap) sustainable energy for the production of green hydrogen. The Hydrogen Investment Fund draws on years of experience and expertise of its parent company WindShareFund.
Bonus interest: 12%
The investment in hydrogen technology gives the investment further upward potential, enabling a total bonus interest of 12 percent to be achieved. This gives investors a double advantage: an investment with an acceptable risk in a company that has a a great deal of sustainability expertise as well as an opportunity to invest in the forefront of technological innovation in the transition to a sustainable economy.