Sparc Technologies (ASX:SPN) joins the green hydrogen boom, up 15%

There’s green hydrogen, and now there’s ‘ultra-green’ hydrogen…

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The Sparc Technologies Ltd (ASX: SPN) share price soared on Wednesday afternoon, closing up 15%. This comes after the South Australia-based company announced a joint venture with the University of Adelaide to develop ‘ultra-green’ hydrogen technology.

Shares in the technology solutions company finished the day at $1.03 after hitting an all-time high of $1.16 earlier in the session.

Let’s flesh out the details of this newly-made joint venture involving ASX-listed Sparc Technologies.

Another ASX company diving into hydrogen

The flavour of the year seems to be green hydrogen, among other alternative energy sources. As the pressure to transition to renewables rises, so have the share prices of any company on the ASX that is dabbling in the industry.

All the excitement might be warranted considering the large addressable market potentially on offer. As discussed previously, Australia is currently utilising renewables for only 24% of its total electricity generation. In addition, research suggests a further 5 to 10-fold increase in low carbon technologies is necessary to meet our Paris Accord targets.

That said, a new hydrogen contestant has entered the fray on Wednesday. Sparc Technologies seeks to do hydrogen production a little differently from the rest — hence the ‘ultra-green’ terminology.

Typically, green hydrogen is produced using renewable electricity (solar, wind) to conduct electrolysis using an electrolyser.

Meanwhile, Sparc’s proposed technique entails solar radiation being directly applied to a reactor where photocatalytic water splitting takes place. This removes the need for expensive electrolysers, resulting in a significantly reduced capital expenditure. Investors were likely bidding up the share price of ASX-listed Sparc Technologies due in part to this development.

This technology has been jointly devised by Sparc and its partners at the University of Adelaide (UA) and Flinders University.

In its announcement today, the company has executed a non-binding term sheet with UA to form a joint venture hydrogen technology company. According to the release, Sparc will hold a 72% stake with UA holding the other 28% in Sparc Hydrogen Pty Ltd.

Under the agreement, Sparc Hydrogen will have an exclusive license to 100% of UA’s Project intellectual property. Conversely, Sparc Technologies will develop graphene coatings to be applied to the photocatalyst.

Sparc Technologies share price snapshot

In the last year, ASX-listed Sparc Technologies has skyrocketed in value. While the share price floundered for the first half of this year, it has since taken off. As a result, shares in the company are now up 234% in the past 12 months.

For context, the S&P/ASX 200 Index (ASX: XJO) is up a mere 23% over the same time period.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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