Ballard announces $40 million in DOE grants to support build-out of industry-leading integrated fuel cell production Gigafactory in Rockwall, Texas

Rhea-AI Summary

Ballard Power Systems (BLDP) secures US$40 million in grants from the U.S. Department of Energy for the construction of a fuel cell production Gigafactory in Rockwall, Texas. The facility, named Ballard Rockwall Giga 1, will have an annual production capacity of 8 million membrane electrode assemblies (MEAs), 8 million bipolar plates, 20,000 fuel cell stacks, and up to 20,000 fuel cell engines per year. The grants are part of the Clean Hydrogen Electrolysis, Manufacturing, and Recycling Program under the Bipartisan Infrastructure Law, aiming to boost hydrogen and fuel cell scaling in the U.S. Ballard plans to invest approximately US$160 million in the facility from 2024 through 2027, with potential for future expansion phases.

Insights

Energy Sector Analyst

The announcement from Ballard Power Systems regarding the potential financial awards from the U.S. Department of Energy is a significant development for the company and the energy sector at large. These grants aim to bolster the clean energy industry and are aligned with the broader governmental push towards environmental sustainability and energy security. Ballard's proposed Gigafactory in Rockwall, Texas, represents a strategic expansion of its manufacturing capabilities, which is expected to enhance its production capacity significantly. The focus on advanced proton exchange membrane (PEM) MEAs and automated stack assembly, as well as next-generation flexible graphite bipolar plate manufacturing, indicates a technological advancement that could lead to more cost-effective fuel cell solutions.

When assessing the potential impact on Ballard's financials and market position, the planned investment of US$160 million, offset by the US$40 million in grants, suggests a strong commitment to scaling up operations. Moreover, the expected increase in production capacity to 3 gigawatts of fuel cells annually could position Ballard as a more competitive player in the clean energy market, potentially improving its revenue streams and market share. The long-term implications for stakeholders include the potential for increased job creation, contribution to local tax bases and bolstering of critical supply chains within the United States.

Market Research Analyst

The support from the Rockwall Economic Development Corporation (REDC) in the form of land, financial incentives and assistance with planning and approval processes is a testament to the local government's commitment to attracting high-tech manufacturing. This partnership could serve as a blueprint for other companies seeking to expand their manufacturing footprint in the U.S. The proximity to the Gulf Coast hydrogen hub also suggests logistical advantages that could reduce transportation costs and streamline Ballard's supply chain.

Furthermore, Ballard's 'local for local' manufacturing strategy aligns with a growing trend of reshoring and localizing supply chains to mitigate risks associated with global disruptions. This strategic move could resonate positively with investors and customers who are increasingly valuing supply chain resilience and local production. The anticipated cost reductions from advanced manufacturing technologies could enhance Ballard's competitiveness against other energy solutions, potentially leading to increased adoption of fuel cells across various industries.

Environmental Policy Analyst

The grants awarded by the U.S. DOE under the Bipartisan Infrastructure Law highlight the strategic importance of clean hydrogen as part of the U.S. energy policy. Ballard's alignment with these policies through the development of their Gigafactory could provide them with a competitive edge, especially as the U.S. government continues to incentivize clean energy technologies. The environmental implications of increasing fuel cell production capacity are substantial, as fuel cells offer a cleaner alternative to fossil fuels and can play a crucial role in decarbonizing sectors like transportation and industry.

Additionally, Ballard's initiative could stimulate further policy support and investment in the hydrogen and fuel cell sector, potentially leading to a more rapid transition to a low-carbon economy. This could have far-reaching implications for the business landscape, as companies that are early adopters of such technologies may benefit from first-mover advantages and the ability to shape emerging markets for clean energy.

 VANCOUVER, BC and ROCKWALL, Texas, March 14, 2024 /PRNewswire/ - Ballard Power Systems (NASDAQ: BLDP) (TSX: BLDP) announced it has received notification from the Hydrogen and Fuel Cell Technologies Office within the U.S. Department of Energy (DOE) that Ballard's applications for two grants totaling US$40 million under the Clean Hydrogen Electrolysis, Manufacturing, and Recycling Program have been selected and recommended for negotiation of financial awards. The grants will support Ballard's construction and build-out of an integrated fuel cell production Gigafactory based in Rockwall, Texas.

Ballard plans for the new facility, dubbed Ballard Rockwall Giga 1, to be located on a parcel of 22 acres of industrial land within the Rockwall Technology Park in Rockwall, Texas. In Phase I, Ballard plans to invest approximately US$160 million (net of the US$40 million in expected DOE grants) from 2024 through the end of 2027 to build and commission a new manufacturing facility with annual production capacity of 8 million membrane electrode assemblies (MEAs), 8 million bipolar plates, 20,000 fuel cell stacks, and up to 20,000 fuel cell engines per year, or the equivalent of 3 gigawatts of fuel cells. The land acquisition rights and facility design provide Ballard with optionality for additional future phases at the Rockwall site. Future phases are expected to further increase production scaling and capacity expansion with much lower capital requirements.

The facility represents the next stage of Ballard's 'local for local' and advanced manufacturing strategy. Ballard expects to make a final investment decision on this facility later in 2024, pending completion of customary conditions, including necessary approvals, negotiation of final awards with the DOE, and definitive agreements.

The $40 million in total DOE grants comprise a $30 million grant relating to advanced proton exchange membrane (PEM) MEAs and automated stack assembly, with the additional $10 million grant relating to a next-generation flexible graphite bipolar plate manufacturing line. The grants have been awarded by the U.S. DOE's Hydrogen and Fuel Cell Technologies Office to implement provisions of the Bipartisan Infrastructure Law, providing for the award of $750 million for Clean Hydrogen Electrolysis, Manufacturing, and Recycling. Ballard has also applied for additional funding under other U.S. government funding programs.

"We are thrilled to be recommended for participation in the Clean Hydrogen Electrolysis, Manufacturing, and Recycling Program," said Randy MacEwen, Ballard's President & Chief Executive Officer. "We are grateful for the strong support of the DOE's hydrogen policies that position the U.S. for future scaling of hydrogen and fuel cells. This is particularly important as the U.S. accelerates a path towards environmental sustainability and energy security, while continuing to boost domestic manufacturing and bolster critical supply chains. We are also excited to unveil the next stage of our 'local for local' manufacturing strategy, which will feature cutting-edge fuel cell manufacturing technologies across our fuel cell production value chain, enabling cost competitive solutions at scale."

Ballard has also received considerable support from the Rockwall Economic Development Corporation (REDC), which owns and manages the Rockwall Technology Park. The REDC has provided an attractive mix of land, financial, fee and permit incentives for the facility, while assisting in the planning and approval process. The facility will also benefit from its proximity to the Gulf Coast hydrogen hub.

"With an increasingly constructive policy environment and growing customer interest, it is critical to invest in this innovative manufacturing line," commented Dr. Lee Sweetland, Ballard's Chief Transformation Officer. "We have been working hard to develop next-generation, automated production processes for MEAs, bipolar plates, and stack assembly that will position Ballard to meet expected future market demand, while significantly driving down the cost of our market-leading fuel cell engines. We are delighted to partner with the REDC to establish Ballard Rockwall Giga 1, which we expect to contribute to the Rockwall tax base and add high quality jobs in Rockwall."

"We are thrilled that Ballard chose Rockwall, Texas for this transformative project. We believe the choice of Rockwall speaks to our strong advanced manufacturing workforce, logistical advantages, and first-class shovel ready sites we have available in the Rockwall Technology Park," said Phil Wagner, President of the Rockwall Economic Development Corporation. "Ballard's planned investment will go a long way in enabling continued high-quality services at the city, county, and school district levels. Likewise, we look forward to being a committed partner for Ballard in their future growth."

About Ballard Power Systems

Ballard Power Systems' (NASDAQ: BLDP; TSX: BLDP) vision is to deliver fuel cell power for a sustainable planet. Ballard zero-emission PEM fuel cells are enabling electrification of mobility, including buses, commercial trucks, trains, marine vessels, and stationary power. To learn more about Ballard, please visit www.ballard.com.

This release contains forward-looking statements concerning planned operations expansion, related investments, product cost and market impacts, and anticipated implementation timeline. These forward-looking statements reflect Ballard's current expectations as contemplated under section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Any such forward-looking statements are based on Ballard's assumptions relating to its financial forecasts and expectations regarding its product development efforts, manufacturing capacity, and market demand.

These statements involve risks and uncertainties that may cause Ballard's actual results to be materially different, including general economic and regulatory changes, detrimental reliance on third parties, successfully achieving our business plans and achieving and sustaining profitability. For a detailed discussion of these and other risk factors that could affect Ballard's future performance, please refer to Ballard's most recent Annual Information Form. Readers should not place undue reliance on Ballard's forward-looking statements and Ballard assumes no obligation to update or release any revisions to these forward-looking statements, other than as required under applicable legislation.

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SOURCE Ballard Power Systems Inc.

FAQ

What is the total amount of grants Ballard Power Systems (BLDP) received from the U.S. Department of Energy?

Ballard Power Systems has secured a total of US$40 million in grants from the U.S. Department of Energy for the construction of a fuel cell production Gigafactory in Rockwall, Texas.

What is the name of the facility Ballard Power Systems (BLDP) is planning to build in Rockwall, Texas?

Ballard Power Systems plans to build a facility named Ballard Rockwall Giga 1 in Rockwall, Texas.

What is the annual production capacity of the facility Ballard Power Systems (BLDP) is planning to build in Rockwall, Texas?

The facility planned by Ballard Power Systems in Rockwall, Texas will have an annual production capacity of 8 million membrane electrode assemblies (MEAs), 8 million bipolar plates, 20,000 fuel cell stacks, and up to 20,000 fuel cell engines per year.

What is the purpose of the grants received by Ballard Power Systems (BLDP) from the U.S. Department of Energy?

The grants received by Ballard Power Systems from the U.S. Department of Energy are part of the Clean Hydrogen Electrolysis, Manufacturing, and Recycling Program under the Bipartisan Infrastructure Law, aiming to boost hydrogen and fuel cell scaling in the U.S.

What is the expected investment amount by Ballard Power Systems (BLDP) in the new facility in Rockwall, Texas?

Ballard Power Systems plans to invest approximately US$160 million in the new facility in Rockwall, Texas from 2024 through 2027.

What is the significance of the grants awarded to Ballard Power Systems (BLDP) by the U.S. Department of Energy?

The grants awarded to Ballard Power Systems by the U.S. Department of Energy signify support for the advancement of hydrogen and fuel cell technologies, aiding in environmental sustainability and energy security in the U.S.

What is the role of the Rockwall Economic Development Corporation (REDC) in supporting Ballard Power Systems (BLDP) with the new facility?

The Rockwall Economic Development Corporation (REDC) has provided land, financial, fee, and permit incentives for the new facility, while assisting in the planning and approval process.

What is the expected contribution of the new facility in Rockwall, Texas to the local tax base and job market?

The new facility planned by Ballard Power Systems in Rockwall, Texas is expected to contribute to the local tax base and add high-quality jobs in the area, benefiting the city, county, and school district levels.

What is the timeline for Ballard Power Systems (BLDP) to make a final investment decision on the new facility in Rockwall, Texas?

Ballard Power Systems expects to make a final investment decision on the new facility in Rockwall, Texas later in 2024, pending completion of necessary approvals and negotiation of final awards with the U.S. Department of Energy.

What is the focus of Ballard Power Systems (BLDP) in the new facility in Rockwall, Texas?

Ballard Power Systems plans to focus on advanced manufacturing processes for membrane electrode assemblies (MEAs), bipolar plates, and stack assembly in the new facility in Rockwall, Texas, aiming to meet future market demand and reduce costs of fuel cell engines.

What is the role of the U.S. Department of Energy in supporting Ballard Power Systems (BLDP) with grants for the new facility in Rockwall, Texas?

The U.S. Department of Energy has awarded grants to Ballard Power Systems under the Clean Hydrogen Electrolysis, Manufacturing, and Recycling Program to support the construction of the new facility in Rockwall, Texas, as part of efforts to boost hydrogen and fuel cell technologies.

What is the expected impact of the new facility in Rockwall, Texas on Ballard Power Systems' (BLDP) future growth?

The new facility planned by Ballard Power Systems in Rockwall, Texas is expected to enable future growth, contribute to the company's manufacturing capabilities, and add high-quality jobs, enhancing the company's position in the market.

What is the partnership between Ballard Power Systems (BLDP) and the Rockwall Economic Development Corporation (REDC) for the new facility in Rockwall, Texas?

Ballard Power Systems has partnered with the Rockwall Economic Development Corporation (REDC) for the new facility in Rockwall, Texas, receiving support in terms of land, financial incentives, and assistance in the planning process.

What is the expected outcome of Ballard Power Systems' (BLDP) investment in the new facility in Rockwall, Texas?

Ballard Power Systems' investment in the new facility in Rockwall, Texas is expected to lead to the establishment of cutting-edge fuel cell manufacturing technologies and cost-competitive solutions at scale, benefiting the company's market position.

What is the significance of the location chosen by Ballard Power Systems (BLDP) for the new facility in Rockwall, Texas?

The choice of Rockwall, Texas for the new facility by Ballard Power Systems signifies the area's strong advanced manufacturing workforce, logistical advantages, and availability of shovel-ready sites, making it an ideal location for the project.