Make Hydrogen Happen

Plug Power has fought strict federal guidelines for clean hydrogen tax credits. Now it’s securing federal backing to scale up its U.S. production.

 

Fuel cell and electrolyzer manufacturer and would-be green” hydrogen supplier Plug Power has won a conditional commitment for up to a $1.66 billion loan guarantee from the U.S. Department of Energy, providing a boost to its plans to build six large-scale hydrogen production sites across the U.S.

CEO Andy Marsh said in a Tuesday statement that its federal 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 Power must still meet certain milestones before the loan guarantee is finalized. If approved, the loan guarantee would cover any losses to loans Plug Power receives from private-sector lenders, allowing it to lower its cost of capital.

Plug Power recorded a $1.4 billion loss in 2023 and a $296 million loss in the first quarter of 2024. The company has been a longtime supplier of fuel cells for forklifts and other vehicles but has anchored its hopes for future growth and profitability on becoming a major supplier of electrolyzers for the still-nascent clean hydrogen industry. It also plans to reach 500 tons per day of liquid hydrogen production by next year.

Now the question is whether Plug Power, which has never turned a profit in more than 20 years as a publicly traded company, can utilize the federal financial backstop to bolster its multibillion-dollar buildout — and whether the hydrogen it will produce at facilities across the country ends up being eligible for key federal tax credits.

In December, the U.S. Treasury Department issued guidance on how it intends to administer the Inflation Reduction Act’s 45V production tax credit, which offers a lucrative $1-per-kilogram credit for hydrogen produced with very low to zero greenhouse gas emissions.

The proposed rules require hydrogen producers using electricity to split water into hydrogen and oxygen — as Plug Power does with the electrolyzers it builds at its Rochester, New York, factory — to measure the carbon intensity of the electricity they use on an hour-by-hour basis. That electricity must also come from sources that are connected via existing power grids and must be produced by newly built generation facilities.

 

[Read more on the Canary Media website]