What happened
Plug Power (PLUG -5.17%) stock shot up this morning, rising 4.5% as of 9:40 a.m. ET. With the hydrogen fuel cell company making headway into Europe, investors in clean energy saw an opportunity in Plug Power stock today.
So what
This morning, Plug Power announced that it'll build a 100-megawatt green hydrogen generation plant at Port of Antwerp-Bruges in Europe with an annual capacity of 12,500 tons per year.
The deal caught the market's attention for two reasons.
First, the Belgian port is the second-largest in Europe and is strategically located, so the green hydrogen generated from Plug Power's plant will serve multiple industries and help the port decarbonize. Second, and more importantly, this deal comes at a time when the region is grappling with an energy crisis and scrambling for alternatives to traditional fuels like coal and natural gas amid sky-high prices.
Of course, it's not that Plug Power will start supplying green hydrogen overnight under this deal -- construction of the plant may not begin before late 2023, and it could take another year before production begins.
Yet, Europe is now more focused than ever on energy security, and is transitioning to reduce its dependence on fossil fuels. The European Union, for instance, has adopted a target to increase the share of renewables in its total energy production to at least 32% by 2030.
Plug Power's deal to build the green hydrogen plant, therefore, could open the doors for more opportunities for the company in Europe.
Now what
It's worth noting that Plug Power will use its own electrolyzer and liquefaction technology at its Belgian port plant. Electrolyzers are critical devices used to produce green hydrogen, and Plug Power is working hard on its electrolyzers to reduce its costs and help the company achieve its operating margin goal of 17% by 2025. Barely three weeks ago, Plug Power bagged its largest electrolyzer order yet, and that again was from a European company.
Although Plug Power could still be years away from profitability, these orders and deals should drive its revenue higher; and that's what growth investors often bet on.
