Commercial, Distributed Energy Resources, Industrial, Sourcing Renewables - April 7, 2017
Amazon invests in fuel cell biz to boost efficiency
Image of Plug Power's GenDrive forklift fuel cells provided by Plug Power.
In a move aimed at increasing the energy efficiency of its fulfillment centers, Amazon.com Inc. struck an agreement with fuel cell manufacturer Plug Power Inc. potentially valued at $600 million.
At select fulfillment center locations, Amazon will begin powering its industrial equipment such as forklifts using Plug Power's GenKey technology which will enable faster charging times, reduced costs, and support energy-efficiency in Amazon's fulfillment operations, according to an April 5 news release. As part of the purchasing commitment, Amazon has options to acquire Plug Power common shares that, once vested, could total up to $600 million in aggregate.
This year, Amazon plans to spend about $70 million with Plug Power, according to the release.
"This agreement is a tremendous opportunity for Plug Power to further innovate and grow while helping to support the work Amazon does to pick, pack and ship customer orders," Plug Power CEO Andy Marsh said in a statement. "Our hydrogen fuel cell technology, comprehensive service network, and commitment to providing cost-savings for customers has enabled Plug Power to become a trusted partner to many in the industry and we are excited to begin working with Amazon."
Additionally, Amazon and Plug Power will begin working together on technology collaboration, exploring the expansion of applications for Plug Power's line of ProGen fuel cell engines.
The Wall Street Journal reported April 5 that Amazon and Plug Power started working together about a year ago, and in the fourth quarter of 2016, Amazon completed an installation of Plug Power technology at one of its warehouses. The online retail giant has been known for its efficient and cost-focused approach to product distribution, which includes the utilization of energy efficiency and renewable energy installations at a growing number of its facilities.
Wal-Mart Stores Inc. has also done business with Plug Power; WSJ noted that Wal-Mart was the company's largest customer in 2016, representing more than a third of Plug Power's total sales.
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