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Green technology innovation could throw up some great investment opportunities

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Green technology is a rapidly growing field that aims to mitigate the negative impact of human activity on the environment.

According to the 2023 Green Finance Strategy released by the UK government:

“We committed £30 billion of domestic investment for the green industrial revolution …, as well as £6 billion for energy efficiency … and up to £20 billion for CCUS(Carbon Capture, Utilisation and Storage) … seeing a step-change in the UK, with annual investment in low carbon sectors more than doubling in real terms over the past five years. Across 2021 and 2022 alone, over £50 billion of new investments were delivered in low carbon sectors.”

We can extrapolate the government’s supportive vision on the green tech sector, further enhancing UK’s position as one of the world leaders in the green and clean energy sector, from Chancellor Jeremy Hunt’s recent speech at Bloomberg.

The green tech sector in the globe is experiencing exponential growth, with CAGR of 20.8% from 2023 to 2030, driven by global initiatives to reduce carbon emissions and reliance on fossil fuels.

Innovation in energy storage, advancements in renewable energy sources like solar, wind and hydrogen, and the proliferation of electric vehicles are some of the key trends shaping the green tech sector.

McKinsey estimates that the global market opportunity for UK green industries could be worth more than £1 trillion between now and 2030. From its research, McKinsey stated that: “The opportunities from decarbonizing … tend to be concentrated in a few sectors — namely agriculture, oil and gas production, mining, utilities, and transport.”

The Armchair Trader looked at a few companies that lie in these sectors, their updates since our initial coverage, and what lies ahead of UK green tech sector.

opportunities from decarbonizing

Equipmake Holdings

Equipmake Holdings [AQSE:EQIP], is a UK-based technology company specializing in electrification products for electric vehicle (EV) drivetrains, supporting the transition from fossil fuels to zero-emission powertrains. The company’s recent interim results highlight a contracted order book of £9.1 million as of February 2023, reflecting strong growth in commercial demand.

Equipmake successfully delivered the first of 12 repowers of the First Bus Optare Versa fleet, and was also awarded a £1.475 million contract with Newport Transport, to repower eight double-deck buses using its integrated zero-emission drivetrain system.

The company’s entry into international markets like South America and Indonesia and its collaboration with aerospace and automotive sectors demonstrate its diversified approach.

On top of that, we have seen some very promising partnerships with:

  • Frist group, which signed a Letter of Intent for a ‘significant number of additional vehicles’;
  • Vertical Aerospace, for a prototype; order for further development work now received, the first time Equipmake’s electrification products have been applied to the rapidly growing eVTOL market, which is estimated to be worth $30.8 billion globally by 2030;
  • Spirit Yachts and BAR Technologies, exploring further opportunities to collaborate after supplying an e-drivetrain system for a world-first long-range electric flying boat.

Equipmake specialises in the provision electric power systems, which are the basis of the ‘electrifying’ trend we are seeing all over the world. With such fast-growing demand for highly specialised, top-tier electric power components, we anticipate the revenue and impact of Equipmake could grow exponentially.

Invinity Energy Systems

Moving to energy sector, Invinity Energy Systems [AQSE:IES] [LON:IES] is a company focused on the development of vanadium flow batteries (VFBs), providing scalable energy storage solutions (much larger scale than, for example, lithium-ion batteries).

The company’s ability to list debt on Aquis has enabled it to secure necessary funding for expansion and R&D. As of 28 of June 2023, “we (Invinity) have delivered more individual flow batteries (each capable of operating independently) than all other flow battery companies combined across their histories.”

It has been claimed that Mistral, the company’s next generation battery under development, “will define a new category of high-throughput grid-connected energy storage”.

Invinity is in the process of delivering not only cheaper, higher-performance batteries, but the durability of these energy storage units means they can withstand intervention by the second, by the hour and over days (better than lithium-ion batteries). This can also help smooth the power output of windfarms, solar farms and other utility-scale plants.

The successful development of Mistral could be a very potent catalyst for Invinity’s growth. Invinity appears poised for aggressive growth in the following years, with significant investments in technology and market penetration, after signing with some commercial partnerships in the UK, EU and Asia.

Invinity manufactured 13.2 MWh of products during 2022, a 100% increase YoY, closed 39.2 MWh of sales in 2022 compared to 2021’s 0.5 MWh.

SulNox

SulNOX Group [AQSE:SNOX] is an award winning green-tech company focused on decarbonizing liquid hydrocarbon fuels. They specialize in creating unique fuel additives made from biodegradable ingredients, which optimise combustions, and hence increase the efficiency of fuel while reducing emissions, and cleaning the inside of fuel tank at the same time.

The SulNOX is estimated to reduce ~ 8%-10% of fuel consumption and 2% of the maintenance costs. SulNOX is expanding the operations dramatically, after some capital injection from a share issue (~£2.5mil), given the potential market of 70% of every barrel of oil, these products will not only boost shipping companies’ ESG score dramatically, but also provide companies with further financial benefit with carbon credits.

The only thing investors need is the patience for SulNOX to materialize the growth.

Hydrogen Future Industries

Moving to green energy, Hydrogen Future Industries [AQSE:HFI] is a company focused on the development and commercialization of hydrogen-based technologies, specifically wind-based green hydrogen production. Recently, Hydrogen Futures Industries announced the commencement of a prototype’s final testing phase, given the great performance of previous phases.

Hydrogen Futures Industries is at the forefront of researching green hydrogen production, with quantum-physicist with expertise in hydrogen fuel cells (technology sold to Toyota) as a member of the Hydrogen Advisory Board.

The company has also acquired international patents to aid research for the systems needed for a hydrogen future. Hydrogen Future Industries sits right in the heart of the green energy revolution, and could be well positioned for any potential subsidies and investments.

Investors should also pay attention to the test results for the last phase of the testing, which could be a catalyst for price action.

You can get access to AQSE listed shares via most UK stockbrokers including Hargreaves Lansdown and IG

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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