“The key benefit of using SOEC technology to generate this hydrogen is its efficiency”
The broker has a share price target is 1,560p and said it is an “opportune time to revisit what we believe is a long-term winner of the clean energy”.
The technology is the same core as it uses already, but addresses a whole new market, it added.
A solid-oxide electrolyser operates in reverse to a fuel cell, so Ceres is able to use the same core stack technology across both products.
“This is important as it gives Ceres an extremely mature point of departure for the new business.
“It can leverage 20 years of stack development, the same IP portfolio, the same supply chain, the same manufacturing process and potentially the same partners (eg Bosch, Doosan) to provide scale.”
Management said it does not see the need for any technology breakthrough to exploit SOEC commercially, Berenberg reported.
Green hydrogen is expected to play a key role in reducing carbon footprints for industries such as steel, high-value chemicals and transportation.
“The key benefit of using SOEC technology to generate this hydrogen is its efficiency, particularly when coupled with industrial processes in those hard-to-abate sectors.
“By utilising the high-temperature steam from these applications, the system can generate efficiency of up to 95%.
“No other electrolyser technology – eg alkaline and proton-exchange-membrane – can reach this level. “
Berenberg notes that a 1MW-class SOEC system demonstrator is due to be operational in the second half of 2022 with this pilot site allowing potential licensees and partners to validate the technology at a meaningful scale.
The broker estimates SOEC could generate £150-200mln in royalty sales by 2035, with the company having more than enough cash at £230mln to grab the opportunity.
Read More: Ceres Power HoldingsPLC impresses with technology demonstration, says broker