Bloom Energy and SK ecoplant, a subsidiary of South Korean conglomerate SK Group are expanding their existing partnership in order to consolidate their market leadership in power generation and establish market leadership in the hydrogen economy.
The agreement will involve the purchase of at least 500 megawatts (MW) from Bloom Energy, representing a $4.5 billion revenue commitment; the co-creation of two hydrogen research centers; and an equity investment of roughly $500 million.
Since their strategic alliance began three years ago, Bloom Energy and SK ecoplant have completed approximately 200 MW of projects totalling more than $1.8 billion in equipment and anticipated service revenue. The firms will expand this existing business over the next three years with contracts for at least an additional 500 MW of power between 2022 and 2025, totaling about $4.5 billion in equipment and future service revenue.
“Bloom Energy is SK ecoplant’s largest strategic partner in clean energy,” said Kyung-II Park, CEO, SK ecoplant. “We have seen the unparalleled performance of Bloom Energy’s product over the past three years and the company’s ability to execute and deliver a superior solution. We have also had firsthand experience with Bloom’s new hydrogen fuel cells and highly efficient electrolyzers, and we are excited about the competitive advantage we will have. Our work together has established a shared commitment to sustainability, innovation, and creating value. We are demonstrating our confidence and furthering our commitment to this partnership by making this financial investment.”
“From the start of our relationship with SK ecoplant, we have recognized that working together will accelerate our growth and enable SK to become a leader in clean energy and infrastructure solutions,” said KR Sridhar, founder, chairman, and CEO, Bloom Energy. “I am thrilled that over the past three years the superior performance of our products, execution capability, and the scale of our operations have led to such a strong relationship with SK ecoplant. SK ecoplant’s confidence to invest in us is a clear validation of our products and our people. Together, we can accelerate the hydrogen economy on a global basis. This is a win, win, win, win for our company, partners, customers, and investors.”
Bloom Energy and SK ecoplant have entered into an agreement to establish Hydrogen Innovation Centers in the United States and South Korea, respectively. The goal is to considerably accelerate Bloom Energy’s global market expansion for hydrogen fuel cells and hydrogen electrolyzers. Additionally, the agreement represents Bloom Energy’s and SK ecoplant’s increased commitment to a zero-carbon future and continued adoption of environmental, social, and governance best practices.
Additionally, Bloom Energy and SK ecoplant committed to strengthen their strategic alliance by expanding their commercial cooperation in worldwide markets, which may include the acquisition of exclusive distribution rights in select new areas.
SK ecoplant will invest $255 million in Bloom Energy through the acquisition of ten million shares of no-coupon, non-voting redeemable convertible preferred stock at a price of $25.50 per share. SK ecoplant has the option to acquire a minimum of 11 million additional shares of Class A common stock at a 15% premium to the then-current stock price, which must occur no later than November 30, 2023, and is subject to a maximum ownership of 15%.
SK ecoplant will join the Bloom Energy Board of Directors following the conclusion of its second tranche purchase. SK will provide Bloom Energy with an irrevocable proxy to vote on its shares.
Bloom Energy wants to use the revenues to expand the market for hydrogen solutions, accelerate their commercialization, and for other corporate reasons.