FuelCell Energy Inc (NASDAQ: FCEL) is having an incredibly strong start to the trading session this morning after the company announced that it has entered into a new collaboration in an attempt to penetrate the European market. As a result of the announcement, the stock is up more than 23% early on. Here’s what’s going on:
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FCEL Stock Gains On Collaboration Agreement
In a press release issued early this morning, FuelCell Energy announced that it has entered into a new collaboration agreement with E.ON Business Solutions. E.ON is a German company that specializes in integrated energy solutions for customers in commercial, industrial and public sectors.
E.ON is known for providing its customers with tailored solutions for energy efficiency, decentralized power generation, flexibility, virtual power plants, and battery power storage. The company’s partnership with FCEL is a match made in heaven as both are focused on the clean energy space, a commodity that is coming into very high demand in Europe. In a statement, Jason Few, President and CEO at FCEL, had the following to offer:
We are excited to partner with E.ON for the continued advancement of our fuel cell multi-featured platform in Europe. E.ON owns two of our existing power plant projects already. Our solution is a perfect fit for a number of needs throughout Europe, offering both distributed cost-effective energy for sub-megawatt applications, and large scale multi-megawatt continuous clean power for industrial and utility-scale applications. With this collaboration, together, we will be able to offer customers across Europe flexible financial solutions ranging from power purchase agreements, capital leases, and attractive purchase options with the full support of E.ON. With E.ON, FuelCell has a partner who understands both the value and environmental benefits of our solution, is excited about owning future projects, adding our fuel cell leading multi-function energy platform to its direct customer offering and diversifying and advancing its clean energy portfolio.
We have seen a significant increase in demand for clean, alternate baseload power solutions throughout Europe recently. Pollution in the form of NOx, SOx, and particulate matter generated from traditional combustion-based solutions also is an increasing issue, especially in highly populated areas. Customers who rely on power, such as industry, hospitals, hotels, and data centers, all have reacted extremely favorably to our announcement a couple of months ago.
Why This News Is So Important
At first glance, this partnership may not seem like such a big deal. However, the truth of the matter is that it is huge. Here are a few reasons why:
Reason #1: The European Market Is The Place To Be
At the moment, there are several government initiatives in Europe surrounding clean, renewable energy. Most recently, the renewable heat incentive policy is intended to increase the amount of energy generated from renewable sources in Europe.
Due to the government initiatives and overall awareness of the environmental impact of oil-based energy, Europe has become one of the fastest growing regions in the fuell cell technology market.
As the demand for clean energy and fuel cell technology continues to grow in Europe, the opportunity for companies like E.ON and FuelCell Energy will continue to grow as well. So, tapping into this market now is a VERY smart move.
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