Plug Power taps ABB for $300M hydrogen plants

The big picture: The first of the company's two new plants, "Project Gateway," will be North America's largest production facility for so-called green hydrogen. Located in Gennessee County in Upstate New York, it is set to produce 45 metric tons of liquid hydrogen daily.

• The second plant, located in Camden County in southeastern Georgia, will produce 15 tons of liquid green hydrogen per day.
• The plants, already under construction, are expected to begin producing hydrogen as soon as 2023.

Context: Companies are racing to deploy clean-burning hydrogen as a fuel in vehicles — especially those where batteries face greater technical and economic challenges, such as heavy trucks — and as a power source.

• Hydrogen is currently used in industrial processes like producing fertilizer and refining petrDoleum.

Details: Plug Power says that the hydrogen will be used for the transportation and logistics sectors.

• The value of the contract with ABB is not being disclosed, but the plant projects are valued at $200 million to $300 million, Plug Power vice president Kevin Kopczynski told Axios.
• Customers have signed on to buy power from the plants, but when asked, Kopczynski cited the company's current big-name clients: "The ones that we talk about are Amazon, Wal Mart, Home Depot, General Motors."

Catch up fast: Green hydrogen uses renewable energy to power the electrolysis process that separates hydrogen and oxygen atoms. The electrolysis process at Plug Power's New York plant, for example, will run on hydropower.

• Other colors such as blue and gray along the "hydrogen rainbow" are less climate-friendly, relying on natural gas for example.
• The 60 tons of green hydrogen produced daily by the two Plug Power plants will replace 170 tons of fossil fuels, ABB says.

Reality check: Producing hydrogen with renewable energy remains relatively costly — last year, about twice as much as other methods.

• "If we can bring down the cost of the molecule, alleviate some of the concern about, 'Is this green or not,' this is going to grow the market for us," Kopczynski says, though he declined to state how much hydrogen from the new plants will cost once they're completed.
• "We're not saying those numbers exactly. But it is substantially less than what we have to source hydrogen from today. People talk about natural gas parity, we are marching toward diesel fuel parity. That is something we feel quite strongly is going to happen in a five-year time-frame."

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Editor's note: This story has been corrected to reflect that the plant projects are valued at more than $300 million, but the value of the ABB deal has not been disclosed.