Plug Power tees up $1.6bn government loan and commissions the ‘largest liquid green hydrogen plant in the US’

Plug Power, electrolyser manufacturer, has inaugurated its 40MW liquid green hydrogen plant in Georgia, USA, touting it as the largest liquid renewable hydrogen facility in the country. The plant's commissioning coincided with the company's efforts to stabilize its financial standing amid challenges faced in the past year. Plug Power faced severe financial setbacks in 2023 due to a hydrogen supply shortage and a series of unplanned and forced outages in its fuel network, prompting concerns about the company's ability to sustain operations for a full year without adequate cash reserves.

In a recent business update, CEO Andy Marsh and CFO Paul Middleton revealed that Plug Power has concluded term sheet negotiations for a $1.6 billion loan from the Department of Energy (DOE). The loan application is currently under review by the DOE's credit review board and, if approved, would provide funds for six additional green hydrogen plants. This financial injection is expected to "catalyze" Plug's ongoing projects, allowing the company to increase its hydrogen production capacity to 200 tonnes per day. However, a decision from the DOE is not anticipated before the filing of Plug Power's Q4 2023 results in the coming weeks.

In response to the uncertainty, Plug Power will curtail capital expenditures (capex) in 2024, including slowing down the development of its green hydrogen plants in New York and Texas until DOE funding is secured. Additionally, the company plans to implement a recruitment freeze, reduce inventory spending, and discontinue the practice of subsidizing green hydrogen to attract customers to its hydrogen refueling network.

While the announcement led to a slight uptick in Plug Power's share price to $3.34, the company still has ground to cover to regain the value lost since February of the previous year, when its stock was valued at $17.89. At its peak in January 2021, the stock commanded $66.87 per share.

The recently commissioned plant in Woodbine, Georgia, is significant despite its smaller scale compared to global projects in the hundred-megawatt and gigawatt range. It stands out as the largest green hydrogen installation in Europe or North America exclusively utilizing proton exchange membrane (PEM) electrolysers. The facility, incorporating a liquefaction unit for cryogenic hydrogen production, is capable of generating around 15 tonnes of liquid hydrogen per day or 5,475 tonnes annually at full utilization. This capacity is sufficient to power 15,000 forklift trucks daily, according to Plug Power.