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Quietly, Plug Power slips in two big fuel cell advancements
Hydrogen fuel cell manufacturer and innovator has two new developments in its stable that could directly apply to commercial use.
After a few of its moves caught some attention earlier this year, Latham, NY-headquartered hydrogen fuel cell manufacturer Plug Power Inc. has new developments that could affect the commercial as well as automotive markets. One is a particular part that's just gone into production and the other could be a practical element of autonomous hydrogen-powered vehicles yet to come.
The company was part of a project earlier this year where FedEx put a hydrogen fuel cell-powered delivery truck into operation. The medium-duty delivery van came from Workhorse Group, while Plug Power built in the fuel cell motivation.
Then in June, Plug Power announced it had acquired American Fuel Cell (AFC) and would be working to assimilate that company's technology into its own to advance hydrogen fuel cells. That has now materialized.
Several months after the acquisition, Plug Power has brought AFC's membrane electrode assembly technology into the Plug Power ProGen hydrogen fuel cell systems. Think of membrane electrode assemblies, or MEAs, as a stack of plates; they contain the catalysts and other elements used to produce electricity that powers an electric motor, in this case.
The AFC acquisition brought to the equation that company's metal MEAs, which have twice the power density and a longer life than the graphite MEAs Plug Power used before. With higher power density, that could mean lighter fuel cell systems—a particular benefit for on-road commercial vehicles—and the longer product life also makes a good argument in commercial use.
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"It's no secret that fuel cell adoption is on the rise," said Andy Marsh, CEO of Plug Power, pointing to KPMG identifying fuel cell electric vehicles earlier this year as having overtaken battery electric vehicles as the key "megatrend" in the automotive industry.
"Plug Power has the infrastructure required to ramp up production of our new ProGen metal plate stack, ensuring we're meeting the demands of this rapidly expanding industry," Marsh noted.
Hydrogen fuel cells used to power electric vehicle motors claim a number of benefits over battery banks that are charged from the grid and store electricity. Hydrogen is the most abundant element by far in the universe, and the only byproducts of a hydrogen fuel cell producing electricity are heat and water.
Fuel cells can produce that electricity instantly, and the vehicles can be refueled in as little as three minutes with Plug Power's stations. Between those stops, depending on how much hydrogen fuel is onboard, fuel cell-powered vehicles can offer much more range than battery-electrics.
Pro Gen--Battery-electric vehicles not only may require very heavy banks of batteries to reach the range that vehicles—especially commercial ones—may need, they typically are charged overnight for hours. DC fast-charging can cut that down to a fraction of the time, but also shortens the batteries' usable service life.
And battery-electric vehicles can suffer a stiff performance drop in the cold or certain climate conditions, which can be another problem for commercial vehicles that often need to operate no matter what's going on outside. Hydrogen fuel cell-powered electric vehicles work just fine in the cold.
Further step in automation
Meanwhile, Plug Power has another trick up its sleeve with a project now underway in partnership with Rensselaer Polytechnic Institute's Center for Automation Technologies & Systems. RPI and Plug Power are developing a refueling station for hydrogen fuel cell vehicles run by robots.
It's initially intended for warehouse vehicles—not surprising, given that Plug Power's first application of its fuel cells was in forklift trucks. The project will be supported by a $2 million grant from the U.S. Dept. of Energy's Office of Energy Efficiency and Renewable Energy.
Students at the RPI institute developed the technology used to demonstrate how the robotic fueling station would work, including computer vision, sensors, robotic manipulation of the fueling nozzle, and remote-controlling mechanisms.
"The immediate goal of the robotic fueling station is to increase the ease and efficiency of fueling hydrogen-powered vehicles in warehouse settings, where every second amounts to more than $1,000 in annual cost impact for medium-to-large sites," according to Plug Power.
The company clearly sees expanded potential for such a system going forward.
What is green hydrogen?
Green hydrogen uses renewable energy to electrolyze water and separate the hydrogen atom from the two oxygen atoms. Hydrogen has many uses, including replacing fossil fuels to produce power. That would make it a perfect substitute since it would provide emission-free energy without the intermittency associated with renewables.
Unfortunately, it currently comes at a high cost because it's energy-intensive. However, that's changing as the cost of developing renewable energy projects declines, making green hydrogen a more affordable option.
Because of hydrogen's versatility and the decline in costs, Goldman Sachs believes it has massive growth potential. For example, it estimates that green hydrogen could become the largest electricity consumer in Europe, which is currently leading the way in its development. It could double the continent's demand for power, which would be good news for renewable energy development and conventional energy infrastructure like gas pipelines and thermal power plans since they could get converted for green hydrogen. Add in the opportunities in the U.S. and Asia, and the bank sees a nearly $12 trillion addressable market for green hydrogen by 2050. That led its analysts to call green hydrogen a "once-in-a-lifetime opportunity."
Wind, solar, and energy storage in a field.
One of the early leaders in green hydrogen in the U.S. is renewable energy giant- NextEra Energy (NYSE: NEE). The company's CFO, Rebecca Kujawa, noted on its second-quarter conference call- that "to achieve an emissions-free future, we believe other technologies will be necessary, and we are particularly excited about the long-term potential of hydrogen." She noted that the company is taking a "toe in the water approach" by planning a hydrogen pilot project at one of its utilities in Florida. It would invest $65 million into the project that could start-up by 2023. NextEra would use solar energy to produce green hydrogen to replace a portion of the natural gas consumed by one of the turbines at an existing power plant.
While the company is starting small, it sees massive potential for green hydrogen over the next three decades. In NextEra's estimate, green hydrogen could eliminate the need for fossil fuels in generating electricity while also expanding the market opportunity for renewable energy. Those catalysts lead it to estimate that the renewable energy market could grow tenfold in 30 years. Meanwhile, green hydrogen could also play an important role in electrifying the transportation and industrial sectors. Adding it all up, NextEra estimates that the market potential for renewables and green hydrogen is 19 to 24 times the current renewable energy market.
Another company that sees a bright future in green hydrogen is Plug Power (NASDAQ: PLUG). The company recently inked a deal with leading renewable energy producer- Brookfield Renewable (NYSE: BEP)(NYSE: BEPC) to supply its first green hydrogen facility with 100% renewable energy. The two companies are discussing a broader relationship that could yield additional green hydrogen development opportunities in the coming years. It's the first step in the hydrogen fuel cell company's strategy to produce more than 50% of its hydrogen supplies with renewable energy by 2024.
In addition to accelerating the development of new renewable energy projects, green hydrogen could also cause a major shift in the usage of conventional energy assets like natural gas pipelines and gas-fired power plants. That's because it could become a replacement fuel for natural gas in those existing electricity generating facilities.
According to Goldman Sachs, that would give them a "second life" as the industry could produce hydrogen offsite and ship it via former gas pipelines to existing power plants. Goldman Sachs believes that potential future green hydrogen plays could also include current gas infrastructure owners such as Consolidated Edison, NextEra Energy Partners, and Williams Companies, among others.
Green hydrogen has gone from a long-shot to a real possibility of helping achieve ambitious net-zero pledges thanks to rapidly falling renewable energy costs. Investors will want to keep a close eye on its development, since it represents a massive market opportunity. While there will likely be many winners if it's successful, NextEra Energy, Plug Power, and Brookfield Renewable stand out as intriguing candidates.
https://www.barrons.com/articles/green-hydrogen-is-like-smartphones-pre-2007-bank-of-america-says-these-sectors-will-benefit-51601394783
https://www.ir.plugpower.com/Press-Releases/Press-Release-Details/2020/Plug-Power-Signs-MOU-with-Linde-for-the-Demonstration-of-Fuel-Cell-Powered-On-Road-Vehicles/default.aspx
Hydrogen stocks leading the way today. Could we see $14+ next week?
"Industrial gas giant Linde will demonstrate Plug Power’s ProGen fuel cell engine in Class 6 and Class 8 vehicles, which will be used for the delivery of products.
The companies today announced the signing of a Memorandum of Understanding to solidify thier commitments.
Plug Power’s ProGen fuel cell engines are well suited to heavy-duty vehicles and, in long-haul transportation, provide a unique advantage over a battery electric vehicle.
Andy Marsh, CEO of Plug Power, said, “Plug Power values our long-standing relationship with Linde, and views Linde as a key strategic supplier of hydrogen fuel.”
“Both companies are vested in decarbonising hydrogen production in order to bring a true green solution to customers in line with Plug Power’s stated plans to have more than 50% of the hydrogen used be green by 2024.”
The fleet of hydrogen-powered vehicles are expected to be on roads in early 2021."
Think about the longer term implications and opportunities of this deal, for both companies, as over time, fossil fuels are phased out and replaced with the only obvious choice of liquified hydrogen. From both a production/supply/hauling/delivery end and a user/powertrain/consumer end with dozens of application. However, this partnership is the perfect end for both companies to not only showcase their wares but to exponentially benefit from their unlimited potential.
“The Bottom Line on PLUG Stock
Hydrogen looks poised to proliferate in the Western world, and Plug Power continues to appear to be well-positioned to benefit from that trend. Actually, I believe that Plug Power could become the Exxon Mobil (NYSE:XOM) of hydrogen.
Despite the strength of PLUG stock this year, the shares’ market capitalization remains below $5 billion.
Given that relatively low number and the company’s tremendous potential, I still think that longer-term investors should buy the shares.”
Morgan Stanley analyst Stephen Byrd upgrades Plug Power (NASDAQ:PLUG) from Equal-Weight to Overweight and announces $14 price target.
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