Fossil fuels won't last forever. Moreover, due to the high cost of oil and the high level of pollution that fossil fuels generate, alternative sources of energy such as natural gas and fuel cells are gaining traction, opening opportunities for the likes of Clean Energy Fuels (CLNE, Financial) and Ballard Power (BLDP, Financial). Let's take a look at the prospects of both companies and see how they will do in the coming times.
Clean Energy's moves
Clean Energy has been selected to build an LNG station and supply LNG fuel for Anaheim Resort Transit which operates an existing fleet of 35 LNG buses for Disneyland and the surrounding area. This five-year contract is expected to add approximately 500,000 gallons annually.
In the East, it completed construction of a CNG station for Hillsborough Area Regional Transit in Tampa, Florida and will replace the entire diesel-powered bus fleet to CNG over the next five years.
In Canada, Clean Energy completed and commenced operations of BC Transit to new CNG station in the Nanaimo, British Columbia which will fuel 50 buses currently operating from that transit depot. It has signed approximately 17 near operation and maintenance contract for the Nanaimo station and also TransLink ordered an additional 45 transit buses to fuel at its Clean Energy-operated station at Vancouver, British Columbia.
The refuse market for Clean Energy continues to thrive and expand. Clean Energy plans on building or upgrading a dozen or more stations for Waste Management and Republic Services this year. Most importantly, the two largest solid waste companies in the U.S. combined Republic and Waste Management are now operating approximately 5,500 natural gas refuse trucks.
Clean Energy opened a new station at New York’s JFK airport that will provide fuel for the Port Authority of New York and New Jersey, New York City Department of Sanitation and several other fleets operating around the airport.
Further, the port authority ordered 58 medium-duty trucks to operate at the three New York-area airports: JFK, LaGuardia and Newark.
Clean Energy began construction of the new CNG station under Orlando International Airport which is expected to be completed late in the second quarter of 2014. It recently purchased six existing CNG stations from PECO Philadelphia Regional Gas Utility and is making strategic upgrades to those sites to fuel the growing number of fleets in Pennsylvania transitioning to CNG including PECO’s own fleet.
The ready-mix truck market and bulk fuel hauling market are two attractive new markets that demonstrate large pentup demand for new cement mixture trucks as the economy and construction activity have rebounded.
Clean Energy is also expanding its relationship with its partner Mansfield Energy to form a joint venture focused on the bulk fuel hauling truck market.
What's Ballard doing?
On the other hand, Ballard's work on IP licensing continues with Ballard’s bus assembly licensing contract in China and on the second IP licensing contract. And now, it expects its licensing revenue growth to accelerate significantly with the United Technologies' IP portfolio acquisition and its new strategic alliance.
In addition, the combined portfolio will be instrumental in furthering its corporate strategy in other ways. First, it will expand its engineering services business through the combination of additional IP and its highly skilled fuel cell technology experts. Second, it will afford opportunities to enhance its products through cost reduction and durability improvement, thereby sharpening its competitive positioning and accelerating market penetration. Finally, it will ultimately strengthen Ballard's broader industry leadership position in technology.
Conclusion
Both companies are making smart moves to tap alternative sources of energy. Hence, investors would do well to take a closer look at both companies as they stand to profit from the growing usage of natural gas and fuel cells.
