Plug Power Inc. is developing three green hydrogen production plants in Finland, which will produce 850 tons per day of green hydrogen in 2025 — some of Europe's most significant green hydrogen investments.
The plants will generate liquid green hydrogen used in transportation and make green ammonia for fertilizer, fuel, and heat. One of the plants will make green hydrogen to produce green steel. The company plans to have 1,500 tons per day of clean hydrogen by 2030.
The goal is to scale up the production of green hydrogen from wind and solar power — to transition from grey hydrogen generated from natural gas. Green hydrogen from renewables produces no pollution.
“Plug is building a comprehensive green hydrogen ecosystem, from production, storage, and delivery to energy generation, to help its customers meet their business goals and decarbonize the economy, said Andy Marsh, chief executive of the company, in an interview. “Plug is building green hydrogen production plants to produce 500 metric tons of liquid green hydrogen per day by 2025 in the U.S., and 1,000 metric tons of liquid green hydrogen globally by 2028.”
The U.S. Department of Energy reports approximately 3.7 GW of planned and existing electrolyzer installations as of May 2023. If all announced projects reach structure, the U.S. would be poised to produce 12 million metric tons of clean hydrogen supply annually by 2030. Globally, the total reported electrolyzer capacity stands at 230 GW in 2030.
The Hydrogen Council and McKinsey say hydrogen could decrease up to 7 gigatons of CO2 globally by 2050 — a cumulative reduction of up to 80 gigatons. They add hydrogen could meet 18% of the world’s energy demand.
The Environmental Protection Agency adds the hard-to-abate sectors represent more than three-fourths of U.S. greenhouse gas emissions, with transportation making up 28% of total emissions.
“It’s great to see ongoing momentum with hydrogen projects around the world. As we continue our quest to fight climate change, our focus needs to be on accelerating the action we take now,” said Board Chair of Cummins Tom Linebarger and Co-Chair of the Hydrogen Council.
Plug is just as active in the United States. It broke ground late last year on a liquid hydrogen plant in Fort Worth, Texas. It makes the liquid hydrogen using a NextEra-built 345 MW wind farm build, resulting in 45 tons per day.
It is building a similar plant in New York State to produce 74 tons daily. Plug has completed work related to on-site storage, procuring the major parts. This $290 million investment in green hydrogen production leads to decarbonizing freight transportation and logistics and supports the Empire State’s path to achieving carbon neutrality by 2050.
“Plug Power's future rightfully revolves around building the green hydrogen economy,” said Marsh. “We expect the levelized cost of hydrogen produced by renewables to continue to decline while providing active returns for our investors.”
According to McKinsey, the global hydrogen economy could be as large as $2.5 trillion by 2050.
But what could stop it? The industry wants favorable tax treatment.
Plug Power, the U.S. Chamber of Commerce, and 31 other signatories sent a letter to the Biden Administration to advocate for pragmatic, forward-looking guidance for the Section 45V Clean Hydrogen production tax credits. It says poorly devised rules could hamper the sector.
Suppose regulators adopt overly strict rules on tax qualifications. In that case, a Plug analysis projects a significant negative impact on the development of the green hydrogen industry, including domestic investment reductions of 65 percent by 2032, the loss of over 500,000 jobs over the next seven years, and energy security risks from the failure to develop hydrogen manufacturing and infrastructure.
That portends bad news for climate negotiators and global economists, negating carbon goals and economic potential. We may "not achieve a strong hydrogen industry in the future,” Marsh said. “Hydrogen is critical for decarbonizing a number of hard-to-abate sectors, and we need to develop the hydrogen economy now to achieve our climate goals."
Green hydrogen has the potential to green sectors of the global economy that have long been elusive. But Plug Power is breaking down barriers and illustrating its potential, albeit there is still a long way to go and many hurdles to overcome.
