Dive Brief:

• Amazon has agreed to spend about $70 million on fuel cells and hydrogen technology from Plug Power for use in its e-commerce fulfillment network, and also has obtained an option to acquire up to about 23% of the alternative energy firm.

• Amazon plans to power forklifts and other industrial equipment at 11 fulfillment centers with Plug Power’s GenKey technology, which the latter said will enable faster charging times, reduced costs and support energy-efficiency in Amazon’s fulfillment operations. 

• Regarding the investment option, a Plug Power press release stated that the company “has granted Amazon warrants to acquire up to 55,286,696 of Plug Power’s common shares at $1.1893 per share.”

Dive Insight:

It sounds like Amazon will have to spend quite a bit of money with Plug Power for the stock purchase option to kick in — $600 million or so, according to Plug Power — but $70 million or so is a pretty good start, and some coverage of this news suggested Amazon already is planning to spend even more on Plug Power technology in 2018.

The news certainly did wonders for Plug Power's stock price, which jumped 73% yesterday after the announcement was made. It's still hovering around $2.25 per share, so it appears to be a bargain for now, especially if you believe Amazon is set to make good on what looks like a several-hundred-million-dollar investment in alternative energy technology.

Amazon has not shied away from investing in sustainability projects in recent years, as it was It was the leading corporate purchaser of renewable energy in the U.S. last year, according to the 2017 State of Green Business report. The Plug Power deal appears to be the first step in a major effort to adopt fuel cells and hydrogen technology to power some of the e-commerce giant's fulfillment centers, but just last month Amazon also committed to deploy solar panels at 15 fulfillment centers this year, and many more over the next few years.

Retailers that make these sorts of moves stand to save money in the long run in most cases, though it can also be good for a company's competitive image. Several retailers have embarked on sustainability initiatives, with Wal-Mart long ago taking the lead. That may be enough right there to make Amazon want to ensure it remains the top corporate adopter of these technologies.