Its fuel cells and hydrogen storage system will be installed in Calistoga, a town in the Napa Valley. Energy Vault will own the new system.
Energy Vault rose 10% on the news and another 3% overnight. NRGV stock opened this morning at $2.85, a market capitalization of around $400 million. Plug Power rose over 7.5% on the news and 4% more overnight. PLUG stock opened this morning near $9.40/share. That’s a market cap of $5.5 billion on 2022 revenue of $700 million.
PLUG stock is still down 32% for all of 2023.
Energy Vault is replacing a system of rented diesel generators previously used to provide backup power during wildfires. The installation will begin construction late this year and go online in the third quarter of 2024. Plug Power says it is the largest of its kind in the U.S.,
Hydrogen backup power has become popular with electric utilities because the fuel cells are quiet. They don’t disturb neighborhoods where they’re installed.
In the past, most of Plug Power’s business has involved small fuel cells used in warehouse forklifts. For the California deal, it beat FuelCell Energy (NASDAQ:FCEL), which specialized in utility backup. FuelCell, however, also rose 10% on June 6 and another 2.5% overnight. FCEL stock opened this morning at $2.44/share, a market cap of nearly $1 billion on 2022 revenue of $130 million. FuelCell is processing biogas from landfills into hydrogen, some of which is used as transportation fuel.
The two fuel cell stocks have mirrored one another since the start of 2023. Plug Power was a much bigger speculation in 2021, rising to over $60/share. That year it reached agreements to provide “green hydrogen” with Olin (NYSE:OLN), whose caustic chemical production gives off hydrogen as a byproduct.
PLUG Stock: What Happens Next?
The deal is another indication that hydrogen is becoming a real industry, with increased competition and serious growth.
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On the date of publication, Dana Blankenhorn 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.