FuelCell Energy to Supply Renewable Hydrogen to Toyota
Sign-Up for Free Energy, Facility, Power Newsletter (EFPN) newsletter
FuelCell Energy Inc. FCEL recently inked an agreement to sell renewable hydrogen to Toyota Motor Corp. TM. This tie-up, better known as hydrogen and power off-take agreement, is in line with FuelCell’s strategy to actively market its distributed hydrogen technology. This will offer a hydrogen fueling solution for fuel cell vehicles like that of Toyota and in turn expand FuelCell Energy’s business. Per the terms of the deal, FuelCell Energy will install a multi-megawatt SureSource fuel cell power plant at the Port of Long Beach in California. Once operational, this plant will produce 100% renewable hydrogen which will fuel Toyota’s Mirai fuel cell electric vehicles (FCEVs) as well as Heavy Duty hydrogen fuel cell class 8 trucks (Project Portal).
Notably, FuelCell Energy’s distributed hydrogen solution produces hydrogen and clean power from methane-based fuels such as biogas as by products. The latest SureSource plant will also generate renewable power, which will be supplied to the grid under the California Bioenergy Market Adjustment Tariff (BioMAT) program.
Benefits of the Deal
Apart from strengthening FuelCell Energy’s ties with Toyota, this latest agreement reflects a key progress in building a sustainable hydrogen ecosystem that will facilitate in powering Port operations.
With the growing popularity of fuel cell technology, this deal will represent an innovative and replicable global model for building an affordable hydrogen infrastructure. The renewable transportation fuel will enhance the demand of fuel cell electric cars, trucks and buses.
More adoption of fuel cell vehicles indicate increased demand for fuel cell technology, which in turn will definitely benefit FuelCell Energy and attract more companies like Toyota, which aims at popularizing their FCEVs, to ink deals with it.
What’s Favoring FuelCell Energy?
To reduce carbon emissions from diesel-powered vehicles, demand for FCEVs is on the rise. Toward this, in California, Governor Jerry Brown announced plans to make 100,000 zero-emission freight-hauling machines operational by 2030, under his California Sustainable Freight Action Plan (according to Bloomberg). This in turn has boosted the market for fuel cell energy in the state.
Naturally, companies with significant operations in California will try to tap the growing market for fuel cell energy in the state. The latest deal between Toyota and FuelCell Energy is an example of that.
And not only California, realizing the need for vehicles with lower emissions, prospects of fuel cell energy producers has enhanced worldwide. Notably, the global hydrogen fuel cell vehicle market is expected to grow at a CAGR of more than 82% during 2017-2022. This indicates at more growth prospects for fuel cell makers like FuelCell Energy, Plug Power, Inc. PLUG and Ballard Power Systems, Inc. BLDP.
In the past six months, FuelCell Energy, has outperformed the industry. The company’s shares have gained 64.1% compared with the industry’s rally of 14.2%. This may have been driven by the rising demand for fuel cell technology in recent times.