Updates with details throughout
The US Department of Energy (DOE) has provided fuel cell system and electrolyzer manufacturer Plug Power a $1.7bn loan guarantee to finance up to six hydrogen production projects in the US.
A planned wind-powered hydrogen production facility in Graham, Texas, will be the first project to receive funding from this new line of financing, the company said. Construction on the 45 metric tonnes/d plant is expected to begin within a month and conclude in about 18 months, doubling the company's current capacity, Plug Power chief executive Andy Marsh said. Upon completion, the plant is expected to be the largest green hydrogen plant outside of China, Marsh said.
The loan guarantee comes in the waning days of President Joe Biden's administration, which has sought to kickstart a hydrogen economy to power the energy transition. With president-elect Donald Trump vowing to claw back unspent funds from Biden's signature climate legislation the Inflation Reduction Act, hydrogen proponents are also highlighting their industry's economic and national security benefits.
"We believe the hydrogen economy aligns closely with national security interests, ensuring that the US remains at the forefront of energy technology development and deployment on a global scale," Marsh said.
Plug has invested $250mn into the Texas facility and built about 14 miles of transmission lines to connect to a nearby NextEra Energy wind farm that will power the facility, Marsh said. Plug is also considering expanding its facility in Woodbine, Georgia, to 30 to 35 mt/d from its current 15mt/d capacity, with Marsh saying it will likely be the second project in the company's portfolio to benefit from the new credit line. Elsewhere, Marsh said the company is looking for opportunities across the US.
"We want to make sure that hydrogen is available throughout the country, so it's a broad footprint that we will be looking at."
Plug Power currently has a liquid hydrogen production capacity of about 45 mt/d at plants in Georgia, Tennessee and Louisiana and manufactures electrolyzer stacks at its factory in Rochester, NY.
A last-minute flurry of tax incentives intended to spur hydrogen development and further the outgoing administration's goal of a decarbonized grid, along with the loan, will make expansion in the US much easier, said Marsh. Finalized 45V guidelines for hydrogen production tax credits and a new technology-agnostic approach to 48E incentives are likely to unleash activity across the industry, said Marsh. "We sell things like electrolyzers and mechanical products, so we do think the combination of 48E and 45V will be very, very beneficial to our business."
Plug also signed a deal this week with Allied Green Ammonia (AGA) to supply a 3GW electrolyzer for a hydrogen-to-ammonia plant under development in Australia. AGA is expected to make a final investment decision by the second quarter of this year. If AGA greenlights the project, Plug will begin manufacturing and delivery of proton exchange membrane electrolyzers starting in the first quarter of 2027.
Marsh is confident the company's expansion plans and broader hydrogen incentives will withstand scrutiny from the incoming administration. Oil and gas executives applaud 45V guidelines that extend incentives to natural-gas based projects that include carbon capture technology, while expanded production brings high-paying, blue collar jobs to many Republican-voting districts, Marsh said. "We're creating factory jobs in this industry."
