Technip Energies, the engineering and technology powerhouse quietly fueling the energy transition, delivered a solid Q1 2024 performance. The headline numbers - a 5% year-over-year revenue increase and an adjusted recurring EBIT margin of 7.3% - are impressive on their own. But buried within the transcript of their Q1 2024 earnings call lies a tantalizing clue, an overlooked detail that hints at a potentially explosive growth trajectory in a sector poised to reshape the global energy landscape: green hydrogen.

While much of the market's attention has focused on Technip Energies' recent successes in LNG and carbon capture, a subtle shift in their Technology, Products & Services (TPS) segment is taking place. CEO Arnaud Pieton casually dropped this bombshell: "The work we do for building the demo plant, which is progressing quite well. The start of the integration team on really trying to develop a balance of plant view and trying to optimize the total and levelized cost of hydrogen..." This seemingly innocuous statement reveals that Technip Energies is not simply dabbling in green hydrogen; they are actively building a demo plant and assembling a dedicated integration team focused on optimizing the entire green hydrogen production process. This signals a strategic commitment to become a key player in this burgeoning sector.

Why Green Hydrogen Matters

Green hydrogen, produced using renewable energy sources, is rapidly gaining recognition as a critical component of the global energy transition. It offers a clean and sustainable alternative to fossil fuels, particularly in hard-to-abate sectors like heavy industry and long-distance transportation.

Produced using renewable energy sources like solar and wind power

Offers a clean alternative to fossil fuels, emitting only water vapor

Versatile applications in sectors like steelmaking, transportation, and chemicals

Technip Energies: Poised for Explosive Growth

The global green hydrogen market is projected to reach a staggering $189 billion by 2030, growing at a compound annual growth rate (CAGR) of 54%. Technip Energies, with its proven expertise in large-scale engineering projects, proprietary technologies, and strategic partnerships, is uniquely positioned to capitalize on this explosive growth. Their existing portfolio already includes eFurnace by T.EN, a revolutionary electric furnace technology that can be powered by renewable energy sources, paving the way for green hydrogen-based steel production. Additionally, their acquisition of Processium, a leading specialist in sustainable chemistry, further strengthens their capabilities in green hydrogen production and applications. But the real game-changer lies in their commitment to developing a holistic "balance of plant" view. This signifies a move beyond individual technologies and components towards optimizing the entire green hydrogen production ecosystem. Technip Energies is aiming to deliver integrated solutions that encompass everything from renewable energy generation and electrolysis to hydrogen storage and distribution.

The "Balance of Plant" Advantage

This comprehensive approach could dramatically reduce the levelized cost of hydrogen, making it more competitive with fossil fuels and accelerating its adoption across various industries.

Sizing the Opportunity

Let's delve into the numbers to illustrate the potential impact. Assuming Technip Energies captures just 5% of the projected $189 billion green hydrogen market by 2030, this translates to a potential revenue stream of $9.45 billion. To put that in perspective, their projected revenue for 2024 is €6.1 billion to €6.6 billion.

Conclusion

While the green hydrogen market is still in its nascent stages, Technip Energies' strategic moves and the sheer scale of the opportunity suggest that their quiet foray into this sector could be a game-changer, not only for the company itself but for the global pursuit of a sustainable energy future.

"Fun Fact: Did you know that Technip Energies played a crucial role in the construction of the world's largest offshore wind farm, Hornsea 2, off the coast of the UK? Their expertise in offshore engineering and installation is not just limited to oil and gas but is actively contributing to the growth of renewable energy sources."