Page 20 - DIY Investor Magazine | Issue 38

Aug 2023 20
DIY Investor Magazine ·
One of the opportunities I think will be out there, and will solve a lot of problems in the future, is hydrogen.
Green hydrogen - hydrogen produced from renewable sources - can be stored and transported, which will be a major breakthrough. I think when that happens, the pathway to net zero, will accelerate a great deal.
It’s very interesting Christian - you’ve got multiple colored hydrogen, don’t you? Blue hydrogen and, of course, now green hydrogen, which is the goal. Germany is looking very seriously at hydrogen with talk of hydrogen powered cars, yet other bits of Europe are less keen.
CS: Kind of, German carmakers have experimented with hydrogen cars as long as I’m in this business, actually; I started in 1996, when a large number of companies were already looking into the technology to see whether it can be done economically.
Yet they struggle to do so; the technology is there to create hydrogen, but to do it mass efficiently is currently, and for the last 25 years, has been a challenge.
For the time being, electrification of cars looks the more viable way forward, although as Julian alluded to, once produced
at scale and cost efficiently, green hydrogen is a great way of storing energy. Because as you know, a solar power plant will create power when daylight is there. Not at night, of course. But we will watch the Champions League on TV...
JL: Or Eurovision.
CS: Or Eurovision. Again, making the last place there as Germans as usual. Same is true for wind power plans. Actually they have one time nature and so we need this storage capacity to buffer these things out basically.
JL: Julian, in terms of storage, are companies coming along? You’ve mentioned batteries and you’re talking about hydrogen, are there companies the fund is looking at which could make a big leap in this area?
JB: No. Nothing we have specifically addresses that we don’t have any investments in hydrogen, which are of significance today. We invest in the utility I mentioned, which is involved in
pumped storage. But there’s nothing I would point to in storage where we have an investment; again, we try to balance sort of quality value and growth.
I think today a lot of investments in storage are reasonably speculative, so that’s sort of better suited, I think, to angel investors; people who are more willing...
JL: To take a huge risk.
JB: Take a huge risk; a bit of a punt with the expectation of either losing all your money or making a huge return - and that’s not what we do. In cricketing terms, we’re all about hitting one and two, not swinging for sixes.
JL: Finally, are there companies you’d like to invest in but they’re based in countries that there is an ESG risk?
CS: Good point. Clearly, around the world, a lot of investment in decarbonization is in countries with a democratic background and others that are less so focused on democracy and the rule of law basically.
We take a careful look at both, and countries that do have a lower ESG rating are not ruled out - we are not primarily an ESG driven fund.
Yet we take those risks kind of carefully in mind when we make our assessment about the quality of investment that’s out there.