Pavel Molchanov, Managing Director, Renewable Energy and Clean Technology for Raymond James.
Bloom Energy (NYSE:BE) and Enviva (NYSE:EVA) are just two of the many stocks detailed by top equity analyst Pavel Molchanov, Managing Director, Renewable Energy and Clean Technology for Raymond James & Associates.
Pavel Molchanov joined Raymond James in 2003 and has been part of the energy research team ever since.
He became an analyst in 2006, the year he initiated coverage on the renewable energy/clean technology sector.
In this role, he covers all aspects of sustainability-themed technologies, including solar, wind, biomaterials, electric vehicles, hydrogen, power storage, grid modernization, water technology, and more.
Within the energy research team, he also writes about the broader topics of geopolitical and regulatory issues, climate change, and ESG investing.
This Raymond James analyst has been recognized in the StarMine Top Analyst survey, the Forbes Blue Chip Analyst survey, and the Wall Street Journal Best on the Street survey.
He graduated cum laude from Duke University in 2003 with a Bachelor of Science degree in economics, with high distinction.
In the broader community, he is a member of the Board of Visitors at the University of North Carolina; a member of the Advisory Board at Cool Effect, an environmental project funding charity; and the founder of the Molchanov Sustainability Internship Program at the Royal Institute of International Affairs in London.
“Another company which will have good opportunities in Europe is Bloom Energy (NYSE:BE).
Currently, Bloom is the largest provider of stationary fuel cells in the world.
A fuel cell is a mini power plant.
They are used at data centers, hospitals, and office buildings to provide an extremely reliable supply of electricity.
One thing we know from climate science is that not only are temperatures going up, but weather is less predictable.
This helps explain why the grid has so many disruptions, with lots of outages all over the world.
Fuel cells are a solution to improving the reliability and the resilience of electricity supply for mission-critical businesses such as data centers.
In addition to that, Bloom is starting to produce a second product called an electrolyzer, which is essentially a fuel cell in reverse.
A fuel cell takes natural gas to generate electricity, whereas an electrolyzer takes electricity, passes it through water, and produces hydrogen.
So it’s a way of making hydrogen without a fossil fuel.”
The Raymond James analyst explains the origin of “green hydrogen”.
“This is the definition of green hydrogen.
Green hydrogen is defined as electrolysis of water using renewable power.
The electricity that an electrolyzer passes through water can come from different sources. If the source is renewable — wind, solar, hydro — then the output from the electrolyzer is going to be green hydrogen…
Plug Power (NASDAQ:PLUG) and Bloom Energy are both companies that originally were focused on fuel cells and are now diversifying into electrolyzers.
In that sense there is quite a bit in common.
The technology platform is somewhat different, though.
More importantly, Plug Power is getting into the business of producing hydrogen as a commodity — in other words, selling hydrogen fuel to end users, whereas Bloom Energy is 100% an equipment vendor.
Supply chain complications have presented themselves for both of these companies, and plenty of others in cleantech, because they rely on electrical components.
For both Plug and Bloom Energy, the opportunity in Europe with record high natural gas prices arises from the fact that electrolysis enables production of hydrogen without using natural gas.
By the way, gas is five times more expensive in Europe than it is in the U.S.
In the U.S., we have relatively cheap gas even with the escalation over the past year, but the Inflation Reduction Act created a first-of-its-kind subsidy for low-carbon hydrogen production that will benefit these companies and others…
Recession doesn’t really matter for these companies. This goes back to the point I made earlier — demand has never been better.
The demand for these products is ultimately tied to the cost of fossil fuels.
When fossil fuels are expensive, that inherently bolsters demand for substitutes.
As natural gas in Europe has tripled as a result of the war, that means for the first time ever, green hydrogen is actually cheaper than making hydrogen from natural gas, just like wood pellets are cheaper than burning coal.”
Another lesser known name in the alternative energy sector that the Raymond James experts picks as a top stock is “Enviva (NYSE:EVA).
Enviva is the world’s largest provider of utility-grade wood pellets.
One of the things we’ve seen in Europe, because Russia has basically cut off natural gas supply, is some utilities are needing to burn more coal.
This is not only a big problem environmentally, but it’s also quite expensive.
The price of coal has doubled since the start of the year.
Wood pellets of the kind that Enviva makes are substitutes for coal. They are renewable because they’re made from wood, and they are also cleaner burning, without the various toxins that coal contains.
Because coal is so expensive, wood pellets for the first time ever are actually cheaper than coal.
It is absolutely a no-brainer for power plants in Europe that are burning coal. Switching to wood pellets makes perfect sense.
Enviva is a U.S. company and it produces the wood pellets along the eastern seaboard, where there has always been a lot of forestry.
But they are all shipped abroad: 80% to Europe, 20% to Japan.
That makes Enviva a one-of-a-kind story on improving Europe’s energy security as well as promoting greater sustainability by displacing coal…The demand for these products is ultimately tied to the cost of fossil fuels.
When fossil fuels are expensive, that inherently bolsters demand for substitutes.
As natural gas in Europe has tripled as a result of the war, that means for the first time ever, green hydrogen is actually cheaper than making hydrogen from natural gas, just like wood pellets are cheaper than burning coal.”
Get more on Raymond James top alternative energy analyst Pavel Molchanav’s current top stock picks Bloom Energy (NYSE:BE) and Enviva (NYSE:EVA), as well as many others, by reading his entire 2,300 word interview, exclusively in the Wall Street Transcript.
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