US manufacturer Plug Power will deliver 200MW of PEM electrolysers this year — a 40-fold increase on shipments in 2021, CEO Andy Marsh tells Recharge.
“Last year, we delivered 5MW of electrolyser systems, and this year we’ll deliver 200MW,” he said.
The news comes soon after the New York-based company sealed the world’s first gigawatt-scale electrolyser order, from Danish developer H2 Energy Europe, which is due to be delivered in 2024.
The company also recently won orders for 250MW and 100MW of electrolysers, respectively, in Australia and Egypt — and its order pipeline is a further 16GW, he explained.
“My [order] funnel is 16GW for electrolysers at the moment — and how much of that is real [I don’t know]; it’s not all real. But you can kind of guess that when you start building funnels like this, over the next year, probably about 10-15% [1.6-2.4GW] will funnel through.”
He added that much of the current demand for green hydrogen comes from industries such as cement and glass manufacturing — while ultra-high gas prices are making renewable H2 more and more attractive.
“The best opportunities are probably those ones where you’re just removing a portion or all of the grey hydrogen today and putting green hydrogen in,” he said.
Further demand will also come from the company’s own green hydrogen production. In June, Plug announced that it would be building a 100MW renewable H2 project at the Belgian port of Antwerp-Bruges.
Subsequent projects will be built in New York, Georgia, Tennessee, Texas, Louisiana and California, and in Europe in a joint venture with Spain’s Acciona, Marsh explained.
“By 2025, we’ll have 500 [metric] tons a day of green hydrogen capability [182,500 annually]. And by the end of this year, 70 [metric] tons [per day] in New York.”
Plug’s main manufacturing plant in Rochester, New York state, can currently handle 2.5GW of membrane electrode assembly (MEA), which is supported by system assembly sites outside the state capital, Albany, and near Stuttgart, Germany.
It is also building a 2GW stack assembly factory in Australia, in a joint venture with major H2 developer Fortescue Future Industries, and another 1GW plant in South Korea in a joint venture with local conglomerate SK Group.
So does this mean the company will have to expand its production capacity further to meet the coming demand?
“Probably the capacity will increase, not because the [amount of production] equipment increases, but [because] that same electrolyser stack [which splits water molecules into hydrogen and oxygen] will probably put out 50% more power three years from now,” Marsh explained.
He added that although a new 1GW factory could be built in 14 months at a cost of $150m — which he describes as “not a huge economic ticket” — it would be possible to outsource some aspects of the electrolyser manufacturing process over the short term, if required.
“There's ways that you can work around certain processes — you can get portions going and outsource portions and bring it back in [house at a later day],” he said, pointing out that electrolysers only make up about 30% of the cost of a system, which includes valves, tanks, gas separators and compressors.
In addition to its electrolyser, fuel cell and green H2 production businesses, Plug also has a joint venture in France with automaker Renault called Hyvia, which offers a full range of integrated solutions for hydrogen road freight — including light commercial vehicles and their fuel cells, refuelling stations, green hydrogen supply and fleet management.
Joint ventures seem to be Plug’s new modus operandi.
“If you think about the oil & gas industry, nobody owns everything. Everybody kind of spreads some risk and I think there’s a second large benefit,” explained Marsh. “I don’t think Plug can easily go into a place like South Korea or Australia and have that brand recognition and that reputation. So I think it spreads risk, spreads reward, but it also opens up opportunities that I don’t think Plug would be able to capture on its own.”
