Plug Power To Receive $75.7M For Two Of Its Green Hydrogen Projects From DOE

Plug Power To Receive $75.7M For Two Of Its Green Hydrogen Projects From DOE - Carbon Herald
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Green hydrogen production in the U.S. just received a major boost from the government to improve manufacturing capacities. The U.S. Senate Majority Leader Charles E. Schumer and U.S. Congressman Joe Morelle announced on March 14 over $90 million in federal funding from the U.S. Department of Energy’s (DOE) Clean Hydrogen Manufacturing, Recycling, and Electrolysis programs, part of the bipartisan Infrastructure Investment and Jobs Act.

The funding is also part of $750 million for clean hydrogen projects by the Biden Administration. Plug Power Inc. (NASDAQ: PLUG), a global leader in hydrogen solutions serving the true net zero economy, will receive $75.7 million for two projects, with Ionomr Innovations and Ecolectro to receive the remaining funds out of the $90 million investment for three other hydrogen projects in development. 

“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,” commented Sen. Charles Schumer.

$45.7 million of Plug’s investment will go toward developing automation capabilities at its proton exchange membrane (PEM) stack manufacturing plant in Rochester, New York. The remaining $30 million will go toward meeting a cost goal of $80 per kilowatt for 100,000 heavy duty fuel cell systems per year by 2030 and automating the production of membrane electrode assemblies.

Plug Power is a leader in hydrogen production and fuel cell solutions and manufactures a variety of products serving different energy needs, from stationary power products, electrolyzer products, fuel cell engines for light, medium, and heavy-duty electric vehicles, on the road fueling service, fuel cell products that can power forklifts, pallet jack, AGVs and tuggers and fuel cell backup power solutions. Global brands have relied on Plug’s hydrogen fuel cells for their needs for years. The company is a major driver in the big bet that hydrogen will become a key energy source to decarbonize our economy by mid-century. 

Relevant: Plug Power Stock Rises On New Green Hydrogen Commitment From Amazon

The funding announcement follows Plug Power’s Q4 2023 earnings release on March 1st that showed increased revenue of $891 million for 2023 (27% higher compared to 2022), however still below expectations. Back in March 2023 when Plug announced its results for 2022, management was confident it would generate $1.4 billion in revenue in 2023 with a gross margin of 10%.

The fiscal year ended with an EPS loss of $2.30, compared to a loss of $1.25 in the previous year. The loss was largely driven by increased investments in growth and expansion and varied non-cash charges recorded in Q4.

“This fiscal year has marked a pivotal period in our journey towards growth and sustainability within the hydrogen economy. Recognizing the past challenges with cash management, we are dedicated in 2024 to bolstering our financial profile. Our commitment to driving forward the hydrogen economy remains unwavering. With leveraging existing investments and a prudent approach to cash management, we are well-positioned for sustainable growth and continued innovation in renewable energy,” commented in the earnings statement Andy Marsh, CEO of Plug. 

Relevant: Plug Power Stock Volatile After Q3 Earnings Results

In Q3 2023, the company issued a going concern warning, a notice meaning the company may have less than 12 months to live, however the going concern was removed in Q4 stating it has “sufficient cash on hand coupled with available liquidity to fund its ongoing operations for the foreseeable future”. 

However, the company has never so far reported profit in its 25 years in existence and continues to lose money. That is the main reason why the stock has dropped around 27% year-to-date to current $3.34 levels and tremendously since its 5-year high around the $67 levels reached in 2021.

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