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Duke Energy Arm to Acquire Bloom Energy's Fuel Cell Projects

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Duke Energy Corporation’s (DUK - Free Report) subsidiary, Duke Energy One, recently announced intention of acquiring a portfolio of distributed fuel cell technology projects from Bloom Energy Corporation (BE - Free Report) . The alliance will enable the company to offer cost-effective clean energy solutions to customers.

Details of the Deal

Per the terms, Duke Energy One will purchase approximately 37 megawatts of solid oxide fuel cell generation servers from Bloom Energy. Over the next 18 months, the two companies will deploy these servers at more than 30 sites across a portfolio of customers, including hospitals, technology companies, data centers and universities.

Why Choose Bloom Energy?

Bloom Energy’s fuel cell generation servers are known for uniquely producing clean energy by converting natural gas or biogas into electricity without combustion. This further helps in reducing greenhouse-gas emissions. Moreover, these servers do not generate combustion-related pollutants, such as sulphur oxides, nitrogen oxides or other particulate matter.

Since Duke Energy is steadily focusing on expanding its clean energy footprint, choosing Bloom Energy’s fuel cell technology seems to be an appropriate decision for the utility major, as this will help it reap benefits of the booming global renewable energy market.

With the deployment of the solid oxide fuel cell generation servers, the company can also provide baseload power all week long to industrial customers, leading to fewer intermittent interruptions in power flow for their facilities and operations. This move will help the company expand operations and attract new customers.

Growing Global Prospect of Fuel Cell Technology

In recent times, utility companies have shown an increasing willingness in adopting fuel cell technology, as it generates clean electricity with high-power density. The demand for fuel cell technology is gaining popularity on the back of reliability and cheaper-than-conventional power sources. Going ahead, the global fuel cell market size is projected to reach $24.81 billion at a CAGR of 20.9% by 2025 from 2014, per Grand View Research.

As a result, the market is likely to witness aggressive alliances in the days ahead, with companies looking to expand their end-user segments in emerging markets. The recent acquisition of fuel cell technology projects made by Duke Energy is one such example.

Furthermore, the rising popularity of fuel cell technology has also encouraged alternative energy producer like Plug Power (PLUG - Free Report) to acquire Canada-based EnergyOr Technologies that manufactures advanced lightweight and compact PEM hydrogen fuel cell systems. Similarly, in 2018, Ballard Power Systems (BLDP - Free Report) acquired fuel cell assets from AFCC.

Price Performance

This Zacks Rank #3 (Hold) stock has gained 10.3% compared with the industry’s growth of 10.4% in the past year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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