In November 2021 ReNu Energy signed an agreement to acquire 100% of the shares in Countrywide Renewable Hydrogen (CRH)[Unlisted]. We take a look at the acquisition and share an overview on Countrywide Renewable Hydrogen!

Why ReNu Is Interested In Countrywide Renewable Hydrogen

With hydrogen demand forecasted by Deloitte to hit all-time highs, and governments worldwide executing on decarbonization strategies, there has never been a more appropriate time for an exciting new play on the green hydrogen space.

We first wrote about the massive opportunities in green hydrogen here The Next Big Thing 2021? Green Hydrogen ASX – Prophet Invest | Investing and Wealth (prophet-invest.com).

We have put together a list of five key factors why Prophet have chosen to invest in ReNu Energy Shares and their exposure to Renewable Green Hydrogen, which we share below:

1. Increasing Worldwide Demand for a Hydrogen Future

Interest in hydrogen is growing both internationally and domestically, as governments around the world investigate and execute decarbonization strategies. The Australian government has an agenda that aligns with the pursuit of hydrogen, with almost all states and territories, and the Commonwealth, establishing hydrogen roadmaps or focus groups to drive forward hydrogen opportunities.

Application for Hydrogen. Countrywide Renewable Hydrogen Introduction 
ReNu Energy Acquires Countrywide Renewables
Source: CSIRO National Hydrogen Roadmap

Experts predict massive upside. The global forecast demand for hydrogen is expected to increase to 304Mtpa, up a massive 600% from today’s demand, as it becomes “The energy of the Future”.

Prophets Trusted Affiliate Partner
Global Forecast Demand for Hydrogen (Source: Deloitte)

It’s very important to note that nearly all of today’s hydrogen is sourced from fossil fuels (Brown Hydrogen). As fossil fuels are phased out, there will be a large transition to Green Hydrogen sourced from renewable sources, such as Countrywide’s H2Tas Project. The potential upside in a deal such as this for CRH could be a driver behind ReNu’s aquisition.

The disruption of the outdated $4.65 Trillion dollar fossil fuel industry is perhaps the most publicized and necessary shift of the 21st century. The output capacities and scalability of green hydrogen place this entire sector in an excellent position to begin disrupting the entire energy sector.

CRH will be a leader in the origination and development of new hydrogen production facilities for both the domestic and offshore markets which are forecast to grow significantly as the world meets its emissions targets from 2030 to 2050 and beyond.

CREN PTY LTD

2. Fortescue Metals have Invested Heavily in a Green Hydrogen Project Just KM’s from Countrywide’s

Fortescue Metals (ASX:FMG) has made the move to secure port access in Bell Bay Tasmania as it looks to construct a 250-megawatt green hydrogen plant. This investment by Fortescue is only kilometres from Countrywide Renewable Hydrogen’s Bell Bay H2Tas Project.

Andrew Forrest’s ASX: FMG Fortescue Future Industries, went public recently with some statements around their ambitions to reduce reliance on fossil fuels and shift to a renewable and hydrogen future. Forrest said the green hydrogen market had the potential to create revenues of more than $US12 trillion by 2050, “more than any industry whichever existed today.” To put that into perspective that is more than 8.5 times the entire GDP of Australia.

Fortescue will produce green hydrogen from 2023, with Forrest stating there would be a major role for green hydrogen and ammonia in industries such as heavy transport, including road, rail, and shipping, as well as steel production. He insisted demand would follow supply. And the demand opportunities are massive!

Origin Energy is also conducting a $3.2 million study into the feasibility of building a plant twice that size at Bell Bay, where Woodside Petroleum is also considering green hydrogen investments.

Rest easy knowing that the Bank of America has reported that Green Hydrogen could help reduce worldwide emissions by 1/3 of current usage.

3. Large Government Initiatives towards Renewables and Hydrogen

Australia has the resources and skills to become a global superpower in the export of green hydrogen. Australia seems to have a competitive advantage from our current leadership in energy export, allowing Australia expertise and infrastructure that can be leveraged to develop hydrogen export supply chains.

Australia is said to be able to provide the lowest cost of green hydrogen landed to the Japanese market.

Estimated CIF Price of Hydrogen in Japan
Source: https://arena.gov.au/assets/2018/08/opportunities-for-australia-from-hydrogen-exports.pdf

It is estimated the direct contribution to the Australian economy from hydrogen export could be up to $298 Billion by 2025. It is in Australia’s and the world’s best interest to support the growth through renewable initiatives. Since 2015 the Australian government has committed over $146 million to hydrogen projects.

Recently we have seen ARENA shortlist seven companies for a $70 million funding round. Including Countrywide Renewable Energy through their H2TAS project with Woodside Energy Ltd.

The Japan Story

Japan has committed to being a long-term significant customer for green hydrogen, as a move to reduce their dependence on fossil fuels.

We are well situated to be the dominant supplier to Japan due to geographical location, an abundance of renewable energy sources and infrastructure, and well-established energy trading relationships, meaning we are able to produce the lowest cost hydrogen for their hungry market.

4. The ASX Hydrogen Sector Undeniably “HOT” in recent times.

ReNu Energy’s acquisition of CRH comes after a number of successful transitions into the hot hydrogen market.

Investor returns in Green hydrogen have “EXPLODED” this year. We have seen a number of players entering the fast-growing space. Including the blue-chip giants- Fortescue Metals, Woodside Petroleum, and Santos.

The gains made by these companies over the last twelve months are telling. Investor confidence in the green hydrogen space is very strong.

Here’s a list of currently listed companies with involvement in the hydrogen sector;

CodeCompanyShare PriceYearMarket Cap
FMGFortescue Metals17.14-5.84%$53.1B
WPLWoodside Petroleum21.37-4.96%$20.8B
STOSantos6.380.81%$13.2B
PH2Pure Hydrogen Corporation0.45152%$317M
PRLProvidence Resources0.152933%$175M
HZRHazer Group1.2371.43%$208M
LCKLeigh Creek Energy0.14-17%$112
HXGHexagon Energy Material0.07943%$36.1M
GEVGlobal Energy Ventures0.10546%$61.8M
QEMQEM Limited0.19126%$21.6M
LIOLion Energy0.073350%$27.5M
Sector Average151.15%
RNEReNu Energy0.097$12.9M
List of ASX Companies with Hydrogen Exposure

From these 11 companies, we can see the average return over the previous 12-months has been significant. PRL, PH2, and LIO showed the three largest gains ranging from 152-933% increase over this period.

By taking these stocks we have created a hypothetical index to benchmark the sector. We have assumed an equal investment in all entities totalling $10k. In the below graph we compare the sector against the ASX 200 which has had impressive gains of 25.95% in the previous 12 months.

Performance of Prophets Hydrogen Index Against the ASX 200
Performance of Prophets Hydrogen Index Against the ASX 200

IPOs in The Green Hydrogen Sector

There are a number of green hydrogen businesses looking to debut on the ASX. Verdant Earth Technologies kicked off a successful pre-IPO raise of $2 million in the capital earlier this year. Sweetman Renewables has also launched a $2.5 million pre-IPO raise.

5. Countrywide’s Flagship H2Tas Project with Woodside

Countrywide Renewable Hydrogen (CRH) has secured a partnership in conjunction with Woodside to develop a 24/7 renewable energy hydrogen project (Green Hydrogen). The project is located in Bell Bay Tasmania.

The H2Tas project is expected to commence production in H1 2023, with the initial configuration being a 10MW electrolyser, producing 4.5tonnes of Hydrogen per day.

The project is targeted at producing hydrogen for domestic use in transport, diesel displacement, and gas augmentation. The project is also geared to export Green Hydrogen to North Asia, where the demand is large.

The H2Tas project is well aligned with Australian and Tasmanian Governments’ hydrogen strategies and is well supported.

As a producer of natural gas, Woodside is well positioned to prepare for a future in which hydrogen is set to play a growing role in the energy mix. It’s a natural step as customers demand energy that is transportable and does not release carbon. Woodside has invested in Hydrogen development around the globe and is currently working with Japanese and Korean companies, including large research departments such as Monash University and the Australian CSIRO.

Prophets Trusted Affiliate Partner

We expect to see large-scale hydrogen production around the world by 2030 and we intend to be part of that.

Shaun Gregory, Executive Vice President Sustainability Woodside

Countrywide Renewable Energy Management Team

The CRH senior management team has substantial commercial, financial and renewable energy business development experience. With an impressive portfolio of projects on their resume.

Geoffrey Drucker-Managing Director

  • Extensive experience in the renewables sector, commencing with State Electricity Commission of Victoria
  • Successful renewables project delivery experience
  • Strong political and industry network has been instrumental in generating the CRH project pipeline
  • Employment history includes PwC, Education Department, and private consultancies

Stephen Nossal-Projects & Finance Director

  • 25+ years experience in corporate finance, investment banking, consulting, and senior executive roles in ASX-listed companies
  • Extensive project management experience, transaction identification, sourcing, pricing, financial modelling, marketing and selling
  • Experience includes ~15 years at Macquarie Bank and Goldman Sachs JBWere

Inge Drucker-Operations Director

  • Extensive experience in community, stakeholder, marketing, and media relations
  • Issues, strategy, and project management background
  • Extensive company management, operations, and business administration experience
  • Founded and operated a marketing communications consultancy for 20 years

Susan Oliver AM– Non-Executive Chair

  • Extensive Board and governance experience with ASX-listed companies
  • Serves on the Investment Committee for IFM Investors and is founding Chair of Scale Investors.
  • Previous career in technology and futures consulting with Invetech and leading the Commission for the Future for the Australian Government.
  • Order of Australia awarded for services to business and women
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