Perhaps the best-performing stock in the clean energy sector today, Plug Power (NASDAQ:PLUG) is seeing some impressive price action. At the time of this writing, PLUG stock is surging more than 12% as investors price in a few important pieces of news.
As fellow InvestorPlace contributor William White pointed out earlier this morning, today’s move is tied to a series of deals Plug Power signed in Europe. The company will be bringing on three new electrolyzer projects, allowing for a significant power generation capacity boost.
These three electrolyzer projects are expected to come in at around five-megawatts each. For Plug Power, a company looking to grow its supply (and the demand side of the equation) for green hydrogen, these deals are big.
Additionally, the company is also expected to make a virtual appearance tomorrow at the Jefferies’ Renewables and Clean Energy Conference. Some investors clearly anticipate additional commentary around these deals at the event.
Let’s dive into why investors are buying PLUG stock heavily today.
PLUG Stock Surges on Series of Announcements
In order for industrial-grade green hydrogen to be produced, large electrolyzer projects need to be built. Thus, the deals announced by Plug are a big move in the right direction for the company looking to penetrate certain industries.
These deals — with Ardagh Glass Limmared AB, Hydro Havrand and the APEX Group — will essentially power glass, aluminum and steel makers in Europe. These carbon-intensive businesses will become much greener as these green hydrogen electrolyzers come online. With European regulations remaining among the strictest in the world, the projects will also help various countries hit their emissions targets. It’s a win for the businesses, the government and of course PLUG stock shareholders.
These deals are notable — and not just for the immediate revenue and earnings impact they will have on Plug Power. Rather, it’s their precedent-setting nature that’s significant. If Plug can prove that these electrolyzers can make sense for key industries, we may see greater adoption within the U.S. manufacturing sector. As people pay more attention to limiting industrial emissions, all eyes will be watching this key rollout, which could take some time to become commercialized.
On the date of publication, Chris MacDonald did not hold (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.