Plug Power Inc.’s PLUG shares gained 4.5% yesterday to close at $2.80, thanks to its deal with Walmart Canada, a division of Wal-Mart Stores Inc. WMT. Per the deal, Plug Power will supply 124 GenDrive fuel cells for Walmart Canada’s new High Velocity Distribution Center building in Balzac, Alberta, Canada.
Plug Power has been supplying GenDrive units to this Canadian division of Walmart since 2010. The total number of GenDrive units at this Canadian facility will exceed 230 following this deal.
As part of the deal, Walmart Canada will also receive Plug Power's GenFuel infrastructure that will support its Balzac distribution center. The GenFuel system provides advanced diagnostics to help customers monitor fleet fueling and operational metrics.
Demand for Hydrogen Fuel Cell
Hydrogen fuel cell batteries have become a preferred choice for Walmart to power its lift truck fleets over lead-acid batteries. Hydrogen fuel cells provide consistent power to lift trucks, eliminating the need to change and charge batteries. In addition, fuel cells lower the carbon footprint of the company as it emits only heat and water as byproducts.
Long Relationship with Walmart
Plug Power has been working with Walmart since 2007 and has supplied in excess of 1,800 GenDrive units. These units are being used in eight distribution centers in the U.S. Each of these centers uses Plug Power's proprietary GenFuel system.
Focus on Fuel Cell Stocks
Given the ongoing R&D on developing fuel cell technology, the cost of generating power from fuel cells is expected to come down. Undoubtedly, this alternate electricity generation technique has started to come into prominence and has caught the attention of investors.
Gains for Other Players
The positive attributes of fuel cell technology are expected to drive fuel cell stocks. The Wall-Mart deal not only drove Plug Power stock higher, but triggered off gains in other fuel cell stocks as well. FuelCell Energy Inc. FCEL and Ballard Power Systems Inc. BLDP registered respective gains of 4.24% and 0.98% yesterday.
Ballard Power Systems also has its order book ticking with its latest order from Nisshinbo Holdings Inc. – an energy company – for the next phase of the Technology Solutions project. (read: Ballard Power Advances on Technology Solutions Project).
Zacks Rank
Plug Power Inc. currently carries a Zacks Rank #4 (Sell)
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