Hydrogenics climbs after announcing plans for Ontario energy storage plant

Shares of Hydrogenics (TSX:HYG) are up today after the company announced it had been selected to partner with Enbridge on a Power-to-Gas storage plant that will deliver two megawatts of storage capacity and will be located in the Greater Toronto Area.

Hydrogenics will supply its proton exchange membrane electrolyzers, which deliver carbon-free hydrogen without a compressor.

CEO Daryl Wilson commented on the initiative.

“We are very excited to have been awarded this Power-to-Gas project, the first of its kind in North America,” he said. “We have already experienced the positive impact of having a highly visible reference site with E.ON in Germany, and our partnership with Enbridge will make this application an excellent reference site closer to home. We appreciate the leadership of the Ontario Ministry of Energy to invest in clean energy storage technologies and the IESO for providing this platform for energy innovation.”

It’s been a memorable year for Hydrogenics, as the company has ridden a wave of renewed interest in fuel cell stocks such as Nasdaq-listed Plug Power and Vancouver-based Ballard Power.

Earlier this year, analyst Dev Bhangui explained why the renewed interest in hydrogen power had become so feverish.

The analyst said that while numerous technologies have been fighting for space in the renewable energy storage market, hydrogen-based solutions have a clear edge because they are simple, high capacity, flexible and economical. Hydrogen, noted the analyst, is the renewable energy source closest to being utility grade. For uses such as backup power, hydrogen solves a problem for utilities who have been forced to curb their use of the sources due to the instability of their supply and lack of storage buffers in traditional grid designs.

While the interest in fuel cells was white-hot from investors early this year, it has been fickle of late. The charts of Hydrogenics’ peer group all feature a similar spring peak and summer pullback, though most have made gains again this month.

At press time, shares of Hydrogenics on the TSX were up 9.9% to $21.42.