Plug Power is a corporate sponsor of five of seven U.S. hydrogen hubs DOE selected last year to share a total of $7 billion in federal funding from the 2021 bipartisan infrastructure law.  

Citing supply chain constraints, the company said in a November federal filing, “there is no assurance that our hydrogen production will scale at the rate we anticipate or that we will complete hydrogen production plants on schedule." The firm also speculated it could lack “sufficient capital to fund our operations through the next twelve months.” BMO Capital analyst Ameet Thakkar noted an “arduous path” for the firm until its federal funding is in place.

But other analysts were more positive and Marsh was optimistic, referring to the filing as a short-term technical requirement. “While the industry growth over the past few years hasn’t met our initial expectation, we remain optimistic about its future, especially with increasing government support," he said. "The essential role of hydrogen in addressing climate change is undisputed.” 

Plug Power shares (NASDAQ: PLUG) rose 34.3% at their highest point in the week ending Jan. 26, said S&P Global Market Intelligence. 

The company now is building hydrogen plants in Texas, New York and Louisiana, with four sites under development.

Startup in Georgia

The Woodbine, Ga.. plant is a large proton exchange membrane electrolyzer coupled with a liquefaction plant that will initially produce 15 tons of fuel per day, which is expected to double. The company plant in St. Gabriel, La., under way in a joint venture with chemical manufacturer Olin, is set to start operation later this year. Olin is North America’s largest producer of electrolytic hydrogen, Plug Power said.

Plug Power CFO Paul Middleton, however, told analysts that US Treasury Dept. proposed rules last month on federal tax credits for hydrogen projects were not as favorable as expected. Marsh termed them "disappointing" but expected they would 'loosen up" as final rules are negotiated, he told Bloomberg TV. 

The added cost of construction for the Georgia plant was a source of concern, Marsh told investors. “Part of that was really difficult, because it was a first of its kind," he said, adding "we certainly made design changes."  Marsh said the EPC [contractor] '"was not willing to commit to how much it would cost." Project construction took 18 months to complete. S&B Engineers and Constructors Ltd. was the EPC contractor.  

The final plant cost was not disclosed and not provided by story posting time.

Plug Power expects to get a commitment on construction cost for its Texas plant, being built by Kiewit, said Marsh, who added that design changes would actually lower the figure. The 120-MW facility, under way for New Fortress Energy near Beaumont, is that company's first investment in green hydrogen. It would produce 50 tons per day initially and is scalable to 400 MW, Plug Power said in a 2022 announcement,

He expects that expansion of the Georgia plant's size will cost 40% less, and that the price of its hydrogen would be one-third of what it would be if purchased from a third party. Marsh estimated that figure at about $10 million per ton. 

Capital investment in the 45 ton-per-day plant in Texas and 74 ton-per-day plant in New York has slowed “until we find the right financing solution,” CFO Paul Middleton said during the call. The latter project, in Genesee County, N.Y., is part of what Marsh said during a November 2023 earnings call was an estimated $678-million overall investment in the state. On the latest call, he said Plug Power selected an EPC contractor for the electrolyzer but did not identify the firm.

Resolving Plug Power cash management issues is its “foremost priority,” but growth is critical, said the CEO on the January call. "We're focusing on growth that can enhance cash generation,” he noted. 

Amazon commissioned in December a 1-MW Plug Power electrolyzer system at a Colorado fulfillment center—the retaii giant's first—that is set to produce green hydrogen for more than 225 hydrogen fuel cell-powered forklift trucks at the site. Hydrogen will be compressed on site and stored. The energy firm said hydrogen used at Amazon sites now is produced offsite, liquified and delivered by truck to an on-site storage and dispensing system.

“We’re excited about our ability to produce hydrogen at Amazon facilities through this partnership with Plug,” said Asad Jafry, firm director of global hydrogen economy. "On-site production will make the use of hydrogen even more energy efficient for certain locations and types of facilities.”

Plug Power also announced last year it would build three electrolyzer facilities in Finland, at an estimated cost of $6 billion and capacity of 2.2 GW, to produce about 850 tonnes per day of green hydrogen and ammonia for the European market by 2030. 

Plug Power said Technip Energies is engineering and technology contractor for the projects, with a final investment decision in 2025 or 2026. 

"These projects are expected to represent some of the largest investments in the European [hydrogen] market," the firm said.