Plug Power, GM Secure $750M Federal Funds for Clean Hydrogen Push

The Biden Administration is advancing its agenda to popularize carbon-free hydrogen as a more cost-effective and widely embraced form of clean energy, allocating $750 million in federal funds to assist companies and universities, including Plug Power, General Motors, and Cummins, in expanding the production of electrolyzers for hydrogen generation and fuel cells for its utilization.

Plug Power, aspiring to become a frontrunner in "green" hydrogen derived from water and electricity, emerges as the largest recipient, securing three distinct grants totaling $88.9 million. Following closely is Norway's Nel, a prominent electrolyzer manufacturer, receiving $54.9 million for two projects within the United States. Major grants were also awarded to GM, startup Electric Hydrogen, and established industrial players like Bosch, Cummins, and Germany's Thyssenkrupp. These funds originate from the Bipartisan Infrastructure Law.

Hydrogen has long been touted as a potential transformative force in clean energy, yet it has encountered technical hurdles over the past two decades. While it is the most abundant element in the universe, producing it from carbon-free sources remains costly, as does its compression, storage, and transportation. Currently, the United States consumes approximately 10 million metric tons of hydrogen annually.

The federal initiative seeks to collaborate with companies to reduce the cost of hydrogen production through methods that generate minimal or no climate-warming emissions. The aim is to incentivize industrial users to transition away from conventional, polluting hydrogen sources.

Projects receiving funding under this program could potentially equip the United States with the capacity to manufacture 14 gigawatts of fuel cells annually, sufficient to power 15% of medium- and heavy-duty trucks sold each year, along with 10 gigawatts of electrolyzers annually, capable of producing an additional 1.3 million tons of clean hydrogen per year.

Prior to this, the Biden Administration had announced $7 billion in funding for seven hydrogen "hub" projects across the country, supplemented by an additional $43 billion in private investment to upscale fuel production. Furthermore, in December, tentative guidelines were unveiled for a federal tax credit aimed at incentivizing clean hydrogen production, offering up to $3 per kilogram. However, companies like Plug Power and Cummins have expressed reservations about the proposed regulations, which favor electricity sourced from newly established renewable installations.

Hydrogen is already utilized to power approximately 18,000 fuel cell cars in California, priced at $36 per kilogram. Nevertheless, most experts and industry stakeholders argue that its optimal application lies in heavy industrial uses, ammonia production for fertilizer, and powering long-haul trucks.