Hydrogenics Corporation (NASDAQ:HYGS, TSX:HYG.TO) has entered into a manufacturing and supply agreement with American Power Conversion (APC) (NASDAQ:APCC). Under the agreement, Hydrogenics will deliver up to 500 HyPM XR 12 kW Fuel Cell Power Modules for integration into APC’s NCPI solutions, specifically its InfraStruXure architecture.
APC integrates the fuel cell power module into its advanced, centrally managed, modular and scalable InfraStruXure architecture. The systems are scalable in increments of 10 kW with 30 kW available per standard 19″ server cabinet.
Today, this fuel cell product is available as an option for APC’s InfraStruXure system targeting customers requiring high quality, three-phase AC ‘extended run’ backup power in business-critical data centers, satisfying both the air conditioning and electrical needs of these applications.
“This is a tremendous opportunity for Hydrogenics to continue our development of a commercial fuel cell product for an identified high potential market that can start reaping cost-effective benefits today,” said Pierre Rivard, President and CEO of Hydrogenics. “Securing this largest single order to date for fuel cell units is a great show of confidence from a world leading NCPI systems provider- not only in Hydrogenics’ products and expertise, but in the first-mover opportunity that fuel cell technology provides. The order was achieved in part by setting a new industry benchmark for volume production, enabling significant cost reductions that can be passed to the customer. Here is proof that the fuel cell industry has made real progress in getting to a pricing structure that offers commercial potential for substantial and growing markets.”
“Business critical applications demand constant availability,” said Dwight Sperry, APC’s vice president of Enterprise Systems and Business Networks. “For those customers where generators are not a viable solution, APC’s InfraStruXure architecture with integrated fuel cell technology provides a reliable, environmentally-friendly extended run solution. This new agreement extends our existing relationship with Hydrogenics demonstrating APC’s commitment to continue providing the market with the only integrated network critical physical infrastructure system in this range incorporating fuel cell technology for data center applications globally.”
Interest from the backup power market for Hydrogenics’ fuel cell solutions is based on the ability to deliver reliable cost-effective high-quality power, in a compact footprint, for long periods of time as long as there is a sufficient supply of hydrogen. This overcomes the deficiencies of batteries which need to be replaced every three to ten years and require a large amount of weight-bearing space. Fuel cells also overcome the reliability shortcomings of diesel generator systems which may fail to start up on demand and be subject to increasingly prohibitive and costly siting restrictions.
In the 1-50 kW range, the current market for critical extended run backup power for AC-powered datacenters is over US $2 billion. As the cost of fuel cells continues to come down, it is anticipated that these products will become an increasingly viable backup power solution for the large base of customers that require longer durations of run-time.
The agreement expires three years from execution, or on the date of delivery of the 500th fuel cell power module supplied under the agreement, whichever occurs first. The contract allows that, if an unanticipated development precludes delivery of the full 500 units, Hydrogenics is entitled to a fair and commensurate consideration.
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