PLUG Stock Heats Up as Hydrogen Demand Grows

  • Shares of green hydrogen and fuel-cell solutions specialist Plug Power (PLUG) closed up over 8%.
  • Energy giant Shell (SHEL) made headlines when it announced it will build Europe’s largest renewable hydrogen plant.
  • PLUG stock and other sector-related securities are likely rising in sympathy.
PLUG stock - PLUG Stock Heats Up as Hydrogen Demand Grows

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Green hydrogen and fuel-cell solutions specialist Plug Power (NASDAQ:PLUG) appears to have another shot at attracting speculators to its cause. On Thursday, PLUG stock popped up over 8% as it raced toward the closing bell. While interest in hydrogen-related solutions has picked up, energy giant Shell (NYSE:SHEL) provided most of the fireworks.

Also on Thursday, Shell declared ambitiously that it seeks to “become a net-zero emissions energy business” by 2050, coincidentally aligning with President Joe Biden’s goal for federal sustainability within the same time span. To lay the groundwork for this target, Shell plans to build a major hydrogen plant in the Netherlands.

Called the Holland Hydrogen I facility, the hydrocarbon energy stalwart stated that it would be “Europe’s largest renewable hydrogen plant” when it goes operational in 2025, per a CNBC report.

Significant Implications for PLUG Stock

The business news firm went on to state that “Hydrogen has a diverse range of applications and can be deployed in a wide range of industries. It can be produced in a number of ways. One method includes using electrolysis, with an electric current splitting water into oxygen and hydrogen.”

Should the electricity used in the splitting process originate from renewable sources, industry experts refer to the resultant product as green or renewable hydrogen. For PLUG stock, the process has significant implications for the underlying business as green hydrogen is its core specialty.

As the Wall Street Journal detailed last month, while hydrogen is the most abundant element in the universe, the traditional methodology of extracting it from gas has always been costly. However, as renewable technologies improve, hydrogen may become economically viable, potentially boding very well for PLUG stock.

According to Plug Power CEO Andrew Marsh, “We’ve been in the wilderness for a long time, but we are coming out now.”

In fact, PLUG stock was not the only beneficiary of Thursday’s upside boost. Hydrogen players such as FuelCell Energy (NASDAQ:FCEL) and Bloom Energy (NYSE:BE) also saw robust gains of a similar magnitude.

Many Challenges Lie Ahead

Although the bump up in market value is encouraging for anyone holding a stake in PLUG stock, prospective investors should be prepared for a long ride. On a year-to-date basis, Plug Power is down over 32%, reflecting broader concerns of the green energy sector.

Further, the industry needs to see a breakthrough technology to help make green hydrogen specifically an economically feasible alternative to fossil fuels. So far, the costs remain prohibitive, though that can always change, helping to explain speculative enthusiasm toward PLUG stock and its ilk.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.


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