Which hydrogen generation cos will survive the depression?
Heres a thought
The US Gov isnt stupid
They will figure out that the recession will cost them megabucks and conclude that some cherished government programs will have to be cancelled or at worse deferred for a few years
They will also figure that one beneficial consequence of the upcoming great depression will be a world wide reduction in economic growth which will bring with it a reduction in fossil fuel demand ie for coal and oil
They will cynically conclude that the emissions targets they set themselves for 2015 ,2030 and 2050 will be either easier to achieve or capable of being delayed for 4 or 5 yrs
If they want to achieve targets earlier, all they need to do is to stick to their current game plan
If they want to achieve them on time they can actually cut back on the cost they were budgetting for the emissions program
And
If, like we have always suspected the US Gov never cared a hoot about achieving these targets they can argue that a freeze on emissions spending was justifiable
So what does this mean for the renewable sector ?
And
in particular, for my pet cos Hydrogenics and ITM Power ?
Well
It rather looks like they are both in for a tough time once the new administration gets underway next year
By about April or May 2009 we should begin to see if the federal budget for green projects is being squeezed If it is the key issue will be how much cash do Hydrogenics and ITM Power have to see them through the next 4 or 5 yrs ?
Looking at it this way ITM have an annual spend of around $9m and a cash pile of around $45m so they look good for about 4 yrs or so before funding is their major priority
They also have the comfort of knowing that despite having a hydrogen generator product that at $163/Kw costs something like 8% of Hydrogenics current selling price ITM Power can afford to duck out of the US market since they have a captive european market to exploit and no serious hydrogen generator competitors
Hydrogenics are not quite so fortunate with a cash pile of around 2 1/2 yrs
However unlike ITM they have established themselves in the US marketplace and when they approach something like 12 months cash pile in mid 2009 perhaps they will attract sufficient private funding to keep them going
I hope so
The planet needs to reduce carbon emissions much much more than it needs to increase economic growth
Which is a bit like saying
The planet needs to reduce carbon emissions much much more than it needs to reduce poverty
Sounds awful at first
But a poverty stricken future is surely better than no future ?
Just a thought
