News | May 14, 2024

LPO Announces Conditional Commitment To Plug Power To Produce And Liquify Clean Hydrogen Fuel

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 $1.66B 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.

Source: The U.S. Department of Energy