March 19, 2014

Hydrogen cells more widely accepted, moving into new applications

By DC Velocity Staff

Conventional wisdom has it that the only reason a few companies have adopted hydrogen cells to fuel forklifts in warehouses and DCs is that U.S. Dept. of Energy subsidies are making them cost-effective. That may have been true in the early days of the clean technology, but if Plug Power's experience is any indication, hydrogen fuel cells are on the brink of much wider acceptance—with or without subsidies.

Plug Power currently has approximately 5,000 units in the field in North America, with customers like Sysco, P&G, and BMW. In February, the company announced that Walmart Stores Inc. had signed on for a comprehensive equipment, fuel, and service package at six distribution centers. The contract includes more than 1,700 of Plug Power's GenDrive fuel cell units, fueling infrastructure and hydrogen supply, and a six-year service agreement. The equipment is in addition to the 535 units Walmart already operates at two DCs in Canada (where there are no subsidies) and one in the U.S.

Plug Power says it has worked to bring material and production costs down, and has been able to reduce pricing to make its fuel cells more affordable. And sales are growing at a notable clip. In the fourth quarter of 2013, Plug Power booked $40 million in orders, and since January 1 it has booked $60 million, according to spokesperson Teal Vivacqua. The company also plans to expand into transportation—an "adjacent" market with warehousing and distribution—and is currently involved in two pilot programs in that area. One is a collaboration with ThermoKing and Carrier Transicold, which is testing the feasibility of replacing diesel fuel with hydrogen fuel cells in generators for refrigerated trailers and containers. The other is a project to help FedEx Express extend the range of the electric vehicles it operates in Los Angeles by enabling the vehicles to switch over to hydrogen fuel when their battery levels are low.

More coverage from MODEX 2014