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Plug Power awarded $76M from DOE, still awaiting word on loan, reports record revenue but still no profits

By Howard B. Owens
plug power WNY STAMP
File photo of Plug Power facility under construction at WNY STAMP.
By Howard Owens.

The Department of Energy has awarded grants totaling $75.7 million to Plug Power, the Latham-based green hydrogen power company currently constructing a production facility in WNY STAMP in the town of Alabama.

The funds are part of a $1 trillion infrastructure bill approved by Congress and President Joe Biden in 2021 and are intended to help with research and development of hydrogen fuel production.

The company has also applied for a $1.6 billion low-interest loan from the DOE. That loan is apparently still under consideration.

Plug Power is betting that hydrogen power will become a big winner in the race to develop clean, renewable energy to sustain the economy and protect the environment in the coming decades. The Latham-based company specializes in "green hydrogen," which is the generation of hydrogen fuel using renewable energy sources such as solar and hydropower. An apparent attraction of WNY STAMP is the ability at that location to tap into hydropower generated by Niagara Falls.

Plug Power aims to provide customers with fuel cells, electrolyzers (splitting water into hydrogen and oxygen), to liquid hydrogen fuel. Plug Power wants to provide distribution, delivery, and services and foresees a future for hydrogen that includes uses such as long-haul trucking.

Plug Power's executives have set ambitious goals -- producing 2,000 tons of hydrogen daily by 2030. At that rate, the company hopes to generate $20 billion in annual revenue at that point with a profit margin of at least 30 percent.  

“The Bipartisan Infrastructure & Jobs Law is helping supercharge Upstate NY’s clean hydrogen sector. With this federal funding, Plug Power and other cutting-edge companies will be able to increase production capacity and spark new innovation to reach the next frontier of clean hydrogen manufacturing and research, all while supporting good-paying clean energy jobs and boosting the fight against climate change,” said, Sen. Charles Schumer. “Clean green hydrogen is one of the most exciting forms of new energy production, and with the major federal investments being made thanks to the Bipartisan Infrastructure Law and Inflation Reduction Act I championed, Upstate NY is poised to lead the way in powering America’s clean energy future.”

The grants are divided into two components.

The company will receive $45.7 million for the following project description:

The goal of this project is to establish and implement automation capabilities within our high-performance PEM stack manufacturing facility in Rochester, New York capable of producing 5,000 1 MW stacks per year.

This project will scale up manufacturing of proton exchange membrane electrolyzer stacks to the multi-GW scale, driving down costs to meet DOE targets. This project will automate membrane electrode assembly fabrication and stack assembly and enable automated inspection with machine learning to accelerate factory acceptance testing.

The project description for the second grant, $30 million:

This project will demonstrate a production pathway to meet a projected 2030 system cost of $80/kW for 100,000 heavy-duty fuel cell systems per year and automate the manufacturing of high-performance, low-defect membrane electrode assemblies in collaboration with the National Renewable Energy Lab.

The project will demonstrate an innovative expansion of their current manufacturing line.

“We are very appreciative and excited about the DOE's clean energy manufacturing initiatives and their profound impact on propelling Plug's industry-leading manufacturing capabilities in fuel cell and electrolyzer MEAs (Membrane Electrode Assemblies) and stacks," said Andy Marsh, CEO of Plug. “Congress enacted these policies to advance hydrogen and fuel cells as vital components of the United States’ climate strategy.  This funding will advance Plug’s fuel cell and electrolyzer manufacturing capabilities, create good paying jobs in New York, and fortify the region’s leadership in the national clean energy transition.”

The company selected WNY STAMP for the construction of a liquid hydrogen plant in February 2021.  The plant will cost more than $290 million to complete. 

Plug Power expects to generate 74 tons per day of liquid hydrogen at its WNY STAMP plant. The company recently opened two new production facilities in Georgia and Tennessee, and the WNY STAMP plant is expected to open in early 2025.

Empire State Development is scheduled to pay up to $2 million in Excelsior Tax Credits in exchange for the creation of 68 jobs at the plant, or about $2,941 per job per year over 10 years. Plug Power is not eligible to receive the tax credits until the jobs are filled. The average starting salary is expected to be approximately $70,000 plus benefits.

As part of the project, Plug Power agreed to invest $55 million in a 450-megawatt electrical substation that will make electricity available to other WNY STAMP tenants.

The company received $118.2 million in sales and property tax exemptions from the Genesee County Economic Development Center. Over the 20-year life of the property tax extensions, Plug Power will make payments in lieu of taxes totaling $2.3 million annually, which will be shared by Genesee County, the Town of Alabama, and the Oakfield-Alabama School District.  Each jurisdiction will also receive an increasing amount of property tax payments each year over the life of the agreement.

In accordance with Security and Exchange Commission Rules, Plug Power disclosed in November that a shortage of cash threatened its ability to remain a "going concern" within the following 12 months.  It suggested it could raise more cash by selling stock and that the company expected to receive a sizable loan from the Department of Energy.

Since then, Plug Power authorized B. Riley Securities to offer additional public shares of the company for sale at market rate with the goal of raising an additional $1 billion in capital.  That agreement was announced in January.  Since then, it has reportedly sold 77,417,069 new shares of stock, raising more than $300 million in cash. The company is continuing to sell new shares with a goal of selling another $700 million in 2024.

On Monday morning, the company announced its fourth quarter 2023 results and that it has removed its "going concern" guidance, stating, "The Company has determined it has sufficient cash on hand coupled with available liquidity to fund its ongoing operations for the foreseeable future."

It also announced record revenue of $891 million for the year, a 27% increase over the prior year.

However, the company continues to lose money and has never turned a profit, which, 25 years into its existence, continues to spook investors. After the Q4 report was released on Monday, the price per share of the company's stock dropped 17 cents and closed at $3.37. It hasn't traded above $5 since November. In early 2021, it was trading for more than $60 a share.

For previous Plug Power coverage, click here.

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