Key Takeaways
- Plug Power said Tuesday that it has received a conditional loan guarantee valued at up to $1.66 billion from the U.S. Department of Energy to add green hydrogen facilities.
- The company said it would use the money to pay for the development, construction, and ownership of as many as six new sites to produce hydrogen through splitting water molecules.
- Plug Power CEO Andy Marsh called green hydrogen essential to industrial decarbonization in the U.S.
Shares of Plug Power (PLUG) skyrocketed Tuesday after the producer of green hydrogen announced that it had received a conditional U.S. government loan guarantee valued at up to $1.66 billion to expand its operations.
The company said the money from the Department of Energy (DOE) would “finance the development, construction, and ownership of up to six green hydrogen production facilities.”
What Is Green Hydrogen?
Green hydrogen is produced by splitting water molecules by electrolysis using renewable electricity, and causes significantly lower greenhouse gas emissions than the production of “gray” hydrogen, which traditionally has used fossil fuels like natural gas.
Plug Power said that the new facilities would be built across the nation and supply major companies, including its current customers. It explained that the hydrogen generated would be used “in applications in the material handling, transportation, and industrial sectors.”
Plug Power noted that so far it has deployed more than 69,000 hydrogen fuel cell systems and more than 250 fueling stations. It said it is the largest buyer of liquid hydrogen worldwide.
Chief Executive Officer (CEO) Andy Marsh said green hydrogen is “an essential driver of industrial decarbonization in the United States.” In its announcement, the DOE said the conditional loan “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.”
Must Meet DOE Loan Requirements
The company said that the DOE requires “certain technical, legal, environmental and financial conditions, including negotiation of definitive financing documents,” before giving final approval of the funding.
Despite Tuesday’s almost 24% advance to $3.57 as of 1:48 p.m. ET, shares of Plug Power remain more than 20% lower year-to-date.