Plug Power hopes to use a new federal loan guarantee to scale up production of hydrogen made by splitting the elemental fuel from water with electricity.
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Plug Power, which makes fuel cells and electrolyzers that generate carbon-free hydrogen from water and electricity, got a $1.66 billion loan guarantee from the Energy Department to construct large-scale hydrogen plants aimed at supplying industrial customers and to power non-polluting forklifts.
The funding line will help Plug build as many as six U.S. facilities to make and liquefy hydrogen, the company said. The first of those will be a green hydrogen plant in Graham, Texas, that will make 45 tons of fuel per day, powered by a nearby wind farm. It will open within 18 months and the hydrogen made there will also qualify for a recently announced production tax credit worth as much as $3 per kilogram, CEO Andy Marsh told Forbes.
“The DOE loan helps take care of how we can support customers, making sure they have cost-effective fuels,” he said. Additionally, “we really envision this as an opportunity to bring equity investors in. Hydrogen plants can start looking more and more like how solar and wind are financed, with both debt and private equity folks. We’ll bring some private equity folks into the [Graham] project coupled with the DOE debt. It really will allow us to push out our vision of making hydrogen available nationwide.”
The loan guarantee comes in a final flurry of cleantech investing and credits by the Biden Administration, which has prioritized a range of energy technologies coupled with domestic manufacturing to help reduce the country’s emissions of greenhouse gases under the Bipartisan Infrastructure Law and Inflation Reduction Act. Though the incoming Trump Administration hasn’t made any specific comments about clean hydrogen, it’s unclear whether the kind of robust support for increased domestic production of wind and solar power, batteries and hydrogen will continue.
Plug Power supplies hydrogen to customers including Amazon and Walmart, which use it to power emission-free forklifts at warehouses, and is exploring data center projects with Microsoft. Main customers for green hydrogen are likely to be companies that use it to produce ammonia and cleaner aviation fuel.
Marsh thinks the new administration will remain generally supportive of hydrogen, as part of an overall strategy to increase all forms of domestic energy, particularly as most of Plug’s initial projects are in Republican states like Georgia, Tennessee, Louisiana and Texas.
“Almost all the production work we’re doing is in red districts. We can name 25 red district Republicans–not folks who are in districts that are in question, but true red–who support hydrogen and fuel cells,” he said. “I think the Trump administration will think about energy security and hydrogen’s going to be part of energy security for the future. I think they’re going to think about American jobs, they’re going to think about competition with China and all those things.”
Plug shares rose about 3.7% to $2.84 in after-hours Nasdaq trading, following news of the DOE loan guarantee.
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