Bloom Energy shares BE rose 10% in trading on Tuesday after the company announced a partnership with California Resources Corporation and its carbon management subsidiary, Carbon TerraVault, to evaluate the development of at least 1 gigawatt (GW) of solid-oxide fuel cell power generation combined with carbon capture and storage in California.
The stock gained following the announcement of a non-binding memorandum of understanding (MOU) on Monday evening.
The proposed projects could combine Bloom’s fuel cell technology with Carbon TerraVault’s carbon dioxide transportation and underground storage capabilities.
The agreement comes after a difficult period for the company’s shares, which had lost roughly 31% over the previous month.
A Barclays upgrade also supported sentiment, with the investment bank raising its rating on Bloom Energy to Overweight from Equal Weight and setting a price target of $289.
Bloom Energy and California Resources target 1 GW of capacity
Under the MOU, the companies will evaluate and seek to advance projects involving at least 1 GW of solid-oxide fuel cell power generation paired with carbon capture and storage.
Bloom will provide its fuel cell technology and work with third-party carbon capture technology providers.
Carbon TerraVault will handle CO2 transportation and permanent underground storage, while California Resources will contribute project management expertise.
The proposed projects could make up to 3 million metric tons of CO2 per year available for capture and storage.
The companies are considering developments in Central and Northern California.
The initiative includes both front-of-the-meter and behind-the-meter projects.
The former would connect to Carbon TerraVault’s California storage portfolio and target utility customers.
Behind-the-meter installations would provide on-site power to industrial users across California Resources’ Central Valley footprint.
Potential buyers of the electricity include utilities, community choice aggregators, municipalities and data centres.
Bloom’s chief commercial officer, Aman Joshi, said the company’s non-combustion technology could make carbon capture more efficient and economically viable at scale.
The company also highlighted its high-concentration CO2 exhaust stream as a factor that could improve the efficiency and cost-effectiveness of carbon capture.
Barclays upgrades Bloom Energy as demand outlook improves
Barclays upgraded Bloom Energy to Overweight from Equal Weight, setting a price target of $289.
The bank pointed to the company’s expanding production capacity, higher customer deposits and new supply commitments as signs that demand is increasing faster than previously expected.
Barclays said these developments could support an improved revenue outlook, although it also flagged potential pressure on free cash flow in the near term.
The upgrade follows a period of significant weakness in Bloom Energy shares, which had declined around 31% over the preceding month.
The new price target and improved rating offer a more positive assessment of the company’s prospects amid growing interest in fuel cell power generation.
Oppenheimer highlights partnership but notes uncertainty
Oppenheimer reiterated its Perform rating on Bloom Energy following the announcement.
The investment firm viewed the agreement as validation of the potential for fuel cell technology to deliver carbon capture alongside baseload power.
However, it noted that the MOU is non-binding and does not include specific financial commitments.
The distinction is important because the proposed 1 GW development remains at the evaluation stage rather than representing a confirmed order or construction commitment.
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