Plug Energy has raised $1.5 billion from South Korea’s SK Group, aimed toward boosting hydrogen gasoline cells and inexperienced hydrogen electrolyzers as a cleaner supply of power for transport and trade all through Asian markets.
Wednesday’s announcement marks the second huge funding up to now three months for the Latham, N.Y.-based maker of gasoline cells for forklifts and different work autos, because it seeks to capitalize on a world increase in funding in hydrogen generated from clear energy as a alternative for fossil fuels.
In November, Plug Energy raised $1 billion in a purchased fairness transaction to fund an enlargement of its gasoline cell and electrolyzer manufacturing capability, and to construct 5 large-scale inexperienced hydrogen manufacturing stations throughout the U.S..
However coverage assist for inexperienced hydrogen within the U.S. will not be practically as developed as it’s in different elements of the world with extra aggressive decarbonization targets. That features the European Union, which has set a goal of 40 gigawatts of inexperienced hydrogen electrolyzers by 2030.
That additionally consists of South Korea, whose 2019 “hydrogen financial system” plan requires 15 gigawatts of gasoline cell manufacturing capability by 2030, and to turn into the world’s prime maker of hydrogen-powered automobiles by decade’s finish, with the commensurate refueling infrastructure to assist their home use.
Over the previous decade, South Korean firms have fashioned partnerships with U.S. gasoline cell makers together with Bloom Power, FuelCell Power and United Applied sciences — not all of them profitable over the long term. However SK Group’s funding in Plug Energy is way bigger than these previous agreements, Jeffrey Osborne, analyst with Cowen & Co., mentioned in a Wednesday notice to buyers.
Plug Energy CEO Andy Marsh mentioned in a Wednesday assertion that the relationship with SK Group “provides instant strategic advantages” to increase into Asian markets, and is meant to yield a proper three way partnership by 2022.
Inexperienced hydrogen progress plans
“We count on fast progress and important income technology from the three way partnership which are incremental to our 2024 plan,” he mentioned. Plug Energy makes use of about 20 tons of liquid hydrogen per day to gasoline the roughly 40,000 gasoline cell-powered forklifts in use by prospects together with Amazon, Walmart, DHL and Dwelling Depot.
By 2024 it’s concentrating on one other 85 tons per day of manufacturing capability, 25,000 gasoline cell models a yr and $1.2 billion in annual gross sales. Its $1 billion elevate in November is aimed toward opening a huge manufacturing unit, anticipated to open in 2021 in Rocherter, N.Y., that may permit it to supply 1.5 gigawatts of gasoline cells and about 500 megawatts of electrolyzers per yr by then.
Gasoline cells have fallen far behind batteries because the know-how of alternative to exchange fossil fuels in most autos within the nascent clear transportation sector, given the relative challenges of making a fueling infrastructure to provide hydrogen versus electrical energy. However gasoline cells have taken off within the forklift market, largely as a result of they’re quicker to refuel and may run longer than battery-powered fashions, a vital function for companies that depend on near-constant uptime for work autos.
Plug Energy needs to increase to different work autos, corresponding to freight movers serving ports within the U.S. and Europe. It’s additionally engaged on stationary gasoline cells to energy knowledge facilities and distribution hubs, the place it might tackle opponents corresponding to Bloom Power and FuelCell Power.
However for gasoline cells to cut back general carbon emissions, the trade might want to change from changing fossil fuels to hydrogen — the supply of the overwhelming majority of the fuel in the present day — to creating it by way of electrolysis of water utilizing renewable power.
Inexperienced hydrogen prices three to 4 instances as a lot to supply in the present day because the dominant “grey hydrogen” various, which makes use of steam reforming of pure fuel. However large-scale investments in Europe and Asia may deliver it inside price parity by 2030, based on Wooden Mackenzie and different analysts.
Hitting price parity will require important price reductions in clear energy provide, price reductions and effectivity enhancements in electrolyzer applied sciences, and economies of scale in manufacturing and transport. It can additionally require a buildout of the infrastructure for utilizing hydrogen as a alternative gasoline, whether or not that’s for transportation, chemical compounds manufacturing or as a alternative for pure fuel in electrical energy technology and constructing heating.