Plug Power, the green hydrogen manufacturing firm based in Lathan, with a plant under construction in the town of Alabama, has closed on a $1.66 billion loan guarantee with the U.S. Department of Energy.
The loan guarantee has been under negotiations for months and closes just days before President Joe Biden leaves office.
“Finalizing this loan guarantee with the Department of Energy represents a significant step in expanding our domestic manufacturing and hydrogen production capabilities, which create many high-quality jobs throughout the U.S.,” said Plug CEO Andy Marsh in a release. “In addition to reducing carbon emissions and enhancing the resilience of the U.S. energy grid, we believe the hydrogen economy aligns closely with national security interests, ensuring that the U.S. remains at the forefront of energy technology development and deployment on a global scale.”
Based on prior reporting, it's unclear if Plug intends to use a portion of the loan funds to complete its $290 million green hydrogen fuel plant under construction in WNY STAMP.
Chris Suozzi, VP for business and workforce development at the Genesee County Economic Development Center, reportedly told a Washington, D.C.-based commercial real estate firm that Plug Power's STAMP project is on hold.
However, throughout the negotiations process, Plug Power has publicly maintained that it intends to use the fund to complete six plants, which has previously included the local plant.
In a release on Thursday, Plug stated:
The loan guarantee will help finance the construction of up to six projects to produce and liquify zero- or low-carbon hydrogen at scale throughout the United States. Plug’s Graham, Texas, green hydrogen plant, the first to benefit from this financing, will create hundreds of high-quality jobs. Powered by an adjacent wind farm, Plug’s green hydrogen production plant will utilize the company’s electrolyzer stacks manufactured at its factory in Rochester, N.Y., and its liquefaction and storage systems built at its facility in Houston.
The company already has operational plants in Georgia, Charleston, Tennessee, and Louisiana.
The loan is for $1.55 billion in principal, and Plug is expected to pay $107 million in interest.
Advancing clean hydrogen is a key component of the Biden-Harris Administration’s whole-of-government approach to building a robust clean energy economy that creates healthier communities, strengthens energy security, and delivers new economic opportunities across the nation. Today’s announcement will help unlock the full potential of this versatile fuel and support the growth of a strong, American-led industry that ensures the United States remains at the forefront of the global economy for generations to come. Plug submitted its application to LPO in November 2020.
The release states the Plug is positioned to build out clean hydrogen facilities in several potential locations and to supply its national customer base with end-to-end clean hydrogen at scale.
This project advances President Biden’s efforts to strengthen domestic clean energy supply chains, which are essential to meeting the nation’s ambitious climate goals and enhancing our national and energy security.
The DOE expects that hydrogen from the plants will fuel cell-electric vehicles in material handling, transportation, and industry, which could result in an 84 percent reduction in greenhouse gas emissions compared to conventional hydrogen production.
The clean hydrogen facilities will utilize Plug’s electrolyzer stacks that are manufactured at the company’s state-of-the-art gigafactory in Rochester, NY and will use modular designs to ensure a resilient hydrogen fuel delivery network. Plug is among the leading commercial-scale manufacturers of electrolyzers in the United States and currently operates the largest Proton Exchange Membrane (PEM) electrolyzer system in the United States at its Georgia hydrogen plant.
The DOE explains the process:
Electrolyzers use electricity to split water into its component parts, hydrogen and oxygen. Plug’s PEM technology allows it to operate efficiently even with variable electricity, enabling it to leverage electricity from intermittent renewables. Electrolyzers that use renewables to power their hydrogen production produce emissions-free clean hydrogen. The electrolyzer stacks can be easily configured to produce systems at 1 megawatt (MW), 5 MW, and 10 MW scales. (One MW powers the equivalent of 750 American homes based on their instantaneous demand.)
Wall Street's reaction to the news of the loan? A 7% drop in the stock price, bringing it down to $2.44 a share by the close on Friday.
The Motley Fool stock news site suggests history is working against Plug in investor's minds.
In its 28-year history, Plug has never turned a profit. The company has reported reported $1.4 billion in losses. It also has $930 million in debt already on its books.
