EXPlAINER:
- Plug Power is a New York-based company with headquarters in Lathan. It is a "green hydrogen" company, which means it uses renewable energy sources to convert water into hydrogen fuel, which can be stored in fuel tanks and sold to power vehicles and factory equipment.
- In its 20-year history, Plug Power has never turned a profit. It's annual revenue is currently about $800 million. In 2023, the company reported a $1.4 billion loss.
- Plug Power is building a $290 million hydrogen energy plant in WNY STAMP, the GCEDC-developed high-tech business park in Alabama. The plant is expected to employ 69 people with an average annual salary of more than $70,000. In exchange for the job creation, the company is anticipating $2 million in grants from New York State.
- The company received $118.2 million in sales and property tax exemptions from the Genesee County Economic Development Center. Over the 20-year life of the property tax extensions, Plug Power will make payments in lieu of taxes totaling $2.3 million annually, which will be shared by Genesee County, the Town of Alabama, and the Oakfield-Alabama School District. Each jurisdiction will also receive an increasing amount of property tax payments each year over the life of the agreement.
- In March, the DOE awarded Plug Power grants totaling $75.7 million.
- The DOE loan, if finalized, is expected to help Plug Power complete the WNY STAMP plant, along with five others in the nation, which is reportedly critical to the company generating the hydrogen fuel sales necessary to start achieving profits.
- This phase of the loan guarantee process requires the DOE and Plug Power to negotiate a term sheet, which means "certain technical, legal, environmental and financial conditions, including negotiation of definitive financing documents, must be satisfied before funding of the loan guarantee" (company statement).
Press release:
U.S. Senate Majority Leader Charles E. Schumer today released the following statement on the U.S. Department of Energy announcing a conditional commitment to Plug Power for an up to $1.66 billion loan guarantee to supercharge American-led industry clean hydrogen production:
“This $1.6 billion federal investment will supercharge Plug’s world-class workforce across Upstate New York as Plug builds new facilities across the nation, all powered by the equipment made in New York. Green hydrogen has the potential to help us decarbonize some of the trickiest parts of our economy – from the industrial sector to marine shipping – and with the major federal investments through the Inflation Reduction Act I championed, Upstate NY is poised to lead the way in powering America’s clean energy future. From the electrolyzers made at Plug’s state-of-the-art Gigafactory in Henrietta, NY to the fuel cells manufactured at Plug’s Capital Region facility, this means new growth, new demand for Plug across Upstate NY. With federal investments like this we are unlocking the potential for green hydrogen to power America’s clean energy future, with Plug and Upstate NY leading the way.”
UPDATE, Press release from the Department of Energy:
Today, the U.S. Department of Energy’s (DOE) Loan Programs Office (LPO) announced a conditional commitment to Plug Power Inc.’s (Plug) subsidiary, Plug Power Energy Loan Borrower, LLC, for an up to $1.66 billion loan guarantee to help finance the construction of up to six facilities across several states to produce clean hydrogen utilizing the company’s own electrolyzer technology. 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 strong, American-led industry that ensures the United States remains at the forefront of the global economy for generations to come.
As part of President Biden’s Investing in America agenda to create good-paying, high-quality job opportunities for American workers, this loan guarantee, if finalized, will support an estimated 100-300 jobs during the construction period when at full capacity, and at least 50 new full-time jobs for each location. Together with the Regional Clean Hydrogen Hubs, and ongoing research, development, and demonstration in the DOE Hydrogen Program, this announcement will help strengthen local economies, create and maintain high-quality jobs, reduce greenhouse gas emissions in sectors critical to meeting U.S. net-zero goals, and enhance America’s manufacturing and industrial competitiveness.
Plug has a development pipeline that includes the build-out of clean hydrogen facilities in several potential locations across the United States to supply its national customer base with end-to-end clean hydrogen at scale. This conditional commitment 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. If finalized, the project will support an integrated and resilient commercial scale clean hydrogen fueling network across several regions of the United States.
The hydrogen fuel from the project is expected to power fuel cell-electric vehicles used in the material handling, transportation, and industrial sectors, resulting in an estimated 84% reduction in greenhouse gas emissions compared to conventional hydrogen production, which derives hydrogen from natural gas (CH4) and ultimately produces carbon dioxide (CO2). The benefits of harnessing hydrogen fuel cells in applications such as material handling equipment include enhanced operational efficiency, reduced environmental impact through zero-emission operations, and increased productivity due to faster refueling times compared to conventional batteries. Major corporations such as Amazon, Walmart, and Home Depot use Plug’s hydrogen fuel cells across their warehouse and distribution centers.
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.
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.)
Plug is expected to develop and ultimately implement a strong Community Benefits Plan for each project and has committed to working with local communities for project siting, including soliciting input from local economic development corporations. In particular, Plug will initiate a community outreach program dedicated to promoting awareness, understanding, and utilization of hydrogen as a clean and sustainable energy source, which aims to engage and empower communities by providing educational resources, interactive activities, and collaborative initiatives that highlight the benefits and potential applications of hydrogen technology. Plug employs local workforce development strategies and programs that leverage the comprehensive suite of services offered by the Workforce Innovation and Opportunity Act’s network of One-Stop Career Centers, including the development of apprenticeship programs for operations jobs.
LPO works with all borrowers to create good-paying jobs with strong labor standards from construction through the life of the loan. Plug also supports President Biden’s Justice40 Initiative, which set the goal that 40% of overall benefits of certain federal investments flow to disadvantaged communities that are marginalized by underinvestment and overburdened by pollution.
This announcement is part of a broader suite of actions LPO has taken in line with the President’s Investing in America agenda, which is growing the American economy from the bottom up and middle-out—from rebuilding our nation’s infrastructure, to creating a manufacturing and innovation boom powered by good-paying jobs that don’t require a four-year degree, to building a clean-energy economy that will combat climate change and make our communities more resilient. Leveraging loan authority from the President’s Inflation Reduction Act, LPO is spurring billions in public-private investments to boost the nation’s competitiveness, strengthen supply chains, and create good-paying jobs to power the clean energy economy.
The financing would be offered through LPO’s Title 17 Clean Energy Financing Program, which includes financing opportunities for innovative energy and supply chain projects like Plug’s, certain state-supported projects, and projects that reinvest in existing energy infrastructure.
While this conditional commitment indicates DOE’s intent to finance the project, the company must satisfy certain technical, legal, environmental, and financial conditions before the Department enters into definitive financing documents and funds the loan guarantee.
Learn more about the U.S. National Clean Hydrogen Strategy and Roadmap, the Pathways to Commercial Liftoff: Clean Hydrogen report, and how the DOE Hydrogen Program and Hydrogen Interagency Task Force are supporting the Biden-Harris Administration’s all-of-government strategy to addressing the climate crisis and delivering a clean and equitable energy future for all.
UPDATE, Press release from Plug Power:
Plug Power Inc. (NASDAQ: PLUG), a global leader in comprehensive hydrogen solutions for the green hydrogen economy, received a conditional commitment for an up to $1.66 billion loan guarantee from the Department of Energy’s (“DOE”) Loan Programs Office (“LPO”) to finance the development, construction, and ownership of up to six green hydrogen production facilities.
The production facilities, which will be selected for financing in accordance with procedures to be set forth in definitive documentation with DOE, will be built across the nation and supply major companies, including Plug’s existing customers, with low-carbon, made-in-America green hydrogen. The hydrogen generated will be used in applications in the material handling, transportation, and industrial sectors.
“Green hydrogen is an essential driver of industrial decarbonization in the United States,” said Plug Power CEO Andy Marsh. “Earlier this year, Plug successfully demonstrated our innovation and technical ability by launching the first commercial-scale green hydrogen plant in the country in Woodbine, Georgia. This loan guarantee will help us build on that success with additional green hydrogen plants.”
Marsh added, “We appreciate the partnership with the DOE Loan Programs Office and are pleased to have worked through an intensive due diligence process. The loan guarantee will prove instrumental to grow and scale not only Plug’s green hydrogen plant network, but the clean hydrogen industry in the United States.”
Plug, the leading commercial-scale manufacturer of electrolyzers, currently operates the largest proton exchange membrane (PEM) electrolyzer system in the United States at its Woodbine, Ga., hydrogen plant. Plug’s current green hydrogen generation network now has a liquid hydrogen production capacity of approximately 25 tons per day.
Plug’s green hydrogen production plants utilize the company’s own electrolyzer stacks manufactured at its state-of-the-art gigafactory in Rochester, NY, and Plug’s liquefaction and hydrogen storage systems engineered at its facility in Houston.
DOE’s support for Plug’s green hydrogen projects represents a major milestone in the U.S.’s commitment to advance the development of large-scale hydrogen production, processing, delivery, and storage. It also underscores the application of green hydrogen to help meet decarbonization goals across multiple sectors of the economy.
While this conditional commitment represents a significant milestone and demonstrates the DOE’s intent to finance the project, certain technical, legal, environmental and financial conditions, including negotiation of definitive financing documents, must be satisfied before funding of the loan guarantee.
LPO works in support of President Biden’s ambitions to drive growth in US manufacturing and innovation, create jobs, and build a clean energy economy that will address climate change and make communities more resilient.
Plug’s projects under the loan will adhere to the Biden Administration’s Justice 40 Initiative. This process includes gathering input from local labor, workforce, and economic development organizations in addition to first responder and non-profit organizations. The plants are expected to create good-paying jobs accessible to a diverse talent supply and help develop workforce skills needed to drive the transition to a clean energy economy.
LPO’s Title 17 Clean Energy Financing Program, which supports innovative energy and supply chain projects and projects that reinvest in existing energy infrastructure, will provide the financing to Plug.
For prior Plug Power coverage, click here.
