Plug Power spending millions, eyeing trillions
Firm positions itself to compete in $10T green hydrogen market
It’s all about the hydrogen at Plug Power. Green hydrogen, that is.
Plug Power, the Latham fuel cell maker that is trying to become one of the world’s largest producers of so-called green hydrogen to power its fuel cell technologies, is continuing one of the biggest corporate spending sprees in Capital Region business history.
And while Plug Power is not yet profitable — the company announced Tuesday it lost $106 million during the third quarter of 2021 — it says that it expects 2022 revenues to eclipse $900 million, an 80 percent increase over this year.
And by 2025, Plug Power (Nasdaq: PLUG) believes that revenues will rise to a whopping $3 billion.
A lot of that growth has been fueled by Plug Power’s $3.3 billion war chest of cash it has accumulated through several aggressive rounds of fundraising on Wall Street.
The company has been putting that money to work, acquiring other companies, establishing joint ventures across the globe, and building hydrogen manufacturing sites across the United States and abroad.
“You’ll continue to see Plug travel down this path as we aggressively stake our claim in the potential market of $10 trillion,” CEO Andy Marsh told analysts on Tuesday during a conference call on the company’s quarterly financial results.
Although casual investors may be turned off by the fact that Plug Power has yet to turn a profit, the company continues to focus on positioning itself to be the leader in the fuel cell market when the transportation sector — and the public — is ready to adopt it on a wide scale.
Plug Power had been focused on supplying fuel cells to power forklift trucks used in warehouses. Amazon, Walmart and others are major Plug Power customers.
But the future of the company is in other forms of transportation — delivery trucks, automobiles, and even airplanes one day.
The problem is that fuel cells run on hydrogen, and the U.S. and other countries lack widespread hydrogen fueling infrastructure.
So Plug Power, which is already the largest single user of hydrogen in North America, has embarked on a plan to build its own “green” hydrogen manufacturing plants that make hydrogen out of water using electrolyzers powered by renewable energy.
The strategy could be a gamechanger since today most hydrogen is made from natural gas, which isn’t ideal for an industry whose value is based on providing power sources that no longer rely on fossil fuels. When hydrogen is burned, or consumed, in a fuel cell, the only byproduct is water vapor and warm air. But to make the fuel entirely clean, it must be made from water by electrolysis, using electricity generated from renewable sources like wind, hydro or solar.
To achieve its goals, Plug Power moved ahead with building a network of green hydrogen factories across the U.S., with sites announced or built in western New York, Georgia, Tennessee and California. The New York facility, its largest planned so far, will cost $290 million, meaning Plug Power is looking at billions of dollars in spending over the next decade to build its clean hydrogen empire.
An Australian facility was also recently announced, and Plug Power believes it will be producing 1,000 tons of liquid hydrogen a day by 2028, making it one of the world’s largest suppliers of the clean fuel, which currently is much more expensive than hydrogen made from gas.
“We are on track to build the first of its kind force-majeure resilient green hydrogen generation network in North America with a core focus on making green hydrogen economical and ubiquitous,” Plug Power said in its third-quarter letter to investors.