Key points:
- Plug Power stock rallied despite cancelling plans for a hydrogen plant.
- Investors were unbothered by the news since the project was yet to start.
- PLUG has other major projects that it should focus on in future.
The Plug Power Inc (NASDAQ: PLUG) stock price rallied higher this week despite the green hydrogen company deciding to cancel plans to build a green hydrogen production plant in Martic Township, Pennsylvania.
Investors barely reacted to the decision, maybe because many were unconvinced that the project could take off rapidly, given the lengthy approval processes for such industrial projects in the United States. Such projects usually take years, from being announced to getting all the necessary permits and approvals before breaking ground.
Also read: Five Best Green Energy Stocks For 2022.
Plug Power unveiled plans for the hydrogen production plant on March 30, 2021. The project was to be executed in collaboration with Brookfield Renewable Partners, which operates the nearby Holtwood Hydroelectric Dam on the Susquehanna River. The hydroelectric plant was supposed to provide renewable electricity to the hydrogen plant.
State and Federal officials have denied receiving planning and permit requests from Plug Power regarding the project. Some say they were unaware of the proposal to build the hydrogen plant in Martic Township. The unclear circumstances in which the project was cancelled leaves many questions.
Plug Power claimed that its decision to cancel the project was based on discussions with officials at the U.S. Fish and Wildlife Service, which highlighted that the plant could damage the local ecosystem, which hosts some endangered species.
However, a Fish and Wildlife spokesperson said that the agency’s Pennsylvania Field Office did not have a record of any discussions with Plug Power. The staff at the field office also said that they were unaware of the existence of any federally endangered species in the area.
The muted reaction from investors indicates they did not have a lot of interest in the project. However, plug Power has other projects that its shareholders care more about, such as the 1 GW contract with H2 Energy Europe to build a hydrogen production complex in Denmark, awarded on May 17, 2022.
Plug Power shares recently bounced off the $13 long-term support level and could be headed higher if the level holds. However, a break below this crucial level could lead to further declines.
*This is not investment advice. Always do your due diligence before making investment decisions.
Plug Power stock price.
The Plug Power stock price is down 41% in 2022, with its losses from the November 2021 high reaching 63.6%.
