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Atome Energy Lists On Green Hydrogen And Ammonia Story

Tim Worstall
Tim Worstall trader
Updated 30 Dec 2021
  • Green hydrogen and ammonia are alternatives to standard lithium as batteries
  • A battery is just a method of storing energy
  • Atome’s plan is to turn electricity into hydrogen and ammonia into that storable and transportable energy

Atome Energy PLC (LON: ATOM) is not, despite the name, involved in atomic energy. Rather more interestingly in this time of the energy revolution, it’s involved in green hydrogen and ammonia production. It’s a little difficult to predict its share price performance as it only joined the market (AIM) this morning. It is possible though to explain the background to the basic idea.

An essential problem with renewables is that they’re not available all the time. To get power from solar cells at night you’ve got to have a subsidy system as insane as Spain’s once was (no, really, folk made money by shining spotlights on cells at night) and there are, as we’re just finding out right now, times when the wind just doesn’t blow all over Europe. It’s also true that electricity is difficult to store – batteries are expensive and may never really be available at whole grid level of long-term storage. 

Also Read: The Best Renewable Energy Stocks

But a battery is simply a method of storing energy. So, we can also say that a method of storing energy is a battery. Coal is sunlight stored from a couple of hundred million years ago. And this is really the business that Atome is in – energy storage. The one great and last brick that we need to make the renewable energy system work.

There are parts of the world where electricity can be had very cheaply – but which are too far from users to send it down a wire to them. Paraguay and Iceland come to mind, which is where Atome is operating. Iceland has very cheap geothermal, so much so that it has long been an aluminium producer. There’s no ore there, near no users of the metal. But making aluminium requires around $900 of electricity per tonne of metal. It makes sense to ship the ore to where electricity is cheap and ship the aluminium out again. 

Atome’s basic business idea is to take advantage of those same basic costs facts. Transporting electricity is expensive over long distances. Electricity is cheap in some places. We want a “battery” to be able to cross that gap. Once we’ve got that we’ve also that battery to move electricity over time. And green hydrogen is exactly that. 

Use the cheap electricity to electrolyse water, get H2 from the H2O. Hydrogen itself can be difficult to store and transport, but it’s easily enough reformable into ammonia, which is easier to move. At which point the aim has been achieved, we’ve stored and can now move cheap electricity – or cheap energy – to where energy is expensive across both time and space. 

Now, whether Atome is going to be successful as an individual company at doing this, well, it’s early to tell. But the base idea has economic logic. There’s a lot of government money in the wings hoping this will work. So there could be all sorts of excitement in the Atome share price as this filters through to the market more generally.

There’s also one more thing to consider. If – and it’s IF! – green hydrogen really works in this manner then that solves cars, flying and many other problems. For the moment you’ve got cheap hydrogen – or even ammonia – then it’s fairly simple chemistry to build more complex hydrocarbons like methane, petrol and jet fuel. Not necessarily entirely cheap to do so but it’s known to be entirely and wholly possible. 

Again, the individual success of Atome is unknown at this stage. But the basic business that it’s in – conversion of cheap electricity into storable “battery” materials like hydrogen and ammonia – could well be the solution to flying in the age of climate change. It’s a massive business opportunity. The short-term determinant of the Atome share price could well be – as the only green hydrogen quoted stock in London – determined by how excited the market gets about this prospect.     

Tim Worstall
Tim Worstall is a freelance writer specialising in economics and the financial markets.