Plug Power CEO Andy Marsh on the meteoric rise of green hydrogen
As the world’s largest supplier and user of liquid hydrogen, Plug Power has positioned itself as leading the expansion of green hydrogen technologies in the global push towards decarbonization.
Plug Power's customer demand speaks for itself--the company has seen an annual growth rate of nearly 200 percent over the last five years.
A recent McKinsey study reveals that green hydrogen could meet 14 percent of U.S. energy demand by 2050, creating a hydrogen economy of USD 2.5trn by mid-century.
The study outlines five segments of the economy where green hydrogen will take center stage, including transportation and power generation.
“[Aside from Transportation and Power] another application that I think is just as important is the industrial application,” Andy Marsh, Plug Power President and CEO, told New Project Media. “If you actually look at the carbon footprint for things like steel and concrete manufacturing--things you'd never even think about--it is just as big as the carbon footprint for transportation. And hydrogen’s ability with high heat is really kind of uniquely positioned because there’s nothing else that can really provide you with a carbon-free footprint and burn at high temperatures like hydrogen for those applications.”
According to the U.S. Department of Energy, hydrogen fuel cells (HFCs) are generally between 40-60 percent energy efficient. This range compares to the typical internal combustion engine of a car, which is about 25 percent energy efficient.
“Part of it has to do with, where is mobility going to take off?” Marsh said. “And it's really going to be in more business-to-business applications, and it has a lot to do with the fact that fuel cells make the most sense with attributes like fast fueling. You’ll be able to fuel like you fuel a truck today, in 10 or 15 minutes. In applications that have to go distances, fuel cells are significantly lighter than batteries and take up less space. DHL did this study that if you have to go over 125 miles and you're carrying large packages, batteries take up all the compartment space and you have no space for packages. When I talk to people like Amazon and others, they're the same. So, Plug kind of entered this space about 10, 12 years ago, where we really gave this a lot of thought about what application makes the most sense where you could build a value proposition.”
That’s when the company began installing fuel cells into forklifts for companies like Amazon and Walmart.
“We also moved up into hydrogen fueling stations and we built--this is a little-known fact--over 100 hydrogen stations and distribution centers," Marsh said. "And it really spans the country. Last year we actually surpassed NASA as the biggest user of hydrogen as a fuel. About 15 percent of liquid fuel in the U.S. is actually used by Plug Power today. So, we developed these turnkey solutions and we really ended up developing a whole suite of technologies and capabilities.”
Utilities going green
The heart of a fuel cell is a device called a stack, which takes air and hydrogen and converts it to electricity. The stack extends the life cycle for on-road applications and accelerates the adoption of zero emission HFC electric vehicles (HFCVs).
“We kind of think of them almost like diesel engines today," Marsh said. "A lot of people have diesel engines to back up their house in storms, diesel engines are used in trucks. We think about fuel cells as the same but kind of as a substitute where you can, in applications like mobility and large-scale backup power, take a diesel engine and replace it with a fuel cell. We have deals where we go into large-scale data centers like Amazon or Microsoft. And Microsoft talks about their challenges at data centers where the state of California came to them and said, 'Because of all the issues you need to have 96 hours of backup. And by the way, you can't use diesel.' And hydrogen is really the only solution. We have a lot of facilities at Walmart, and Walmart has the same issues.”
Data center server farms have traditionally been powered by utilities, with diesel and natural gas generators providing necessary backup power. But companies are increasingly seeking more sustainable options, exploring alternatives to traditional combustion generators.
“There are areas where batteries make sense, there are areas where fuel cells with hydrogen makes sense, there are areas where biofuels make sense,” Marsh said. “There’s been a lot of work that's been done, a lot of it coming out of UC Irvine, and I think generally accepted by utilities in the industry. For anything longer than 11 hours of backup, fuel cells and hydrogen take up considerably less space and also are lower weight. You really need appropriate solutions for long-term backup.”
Plug’s stationary power customers have already installed HFCs at nearly 3,000 locations in 46 states and in 34 countries on five continents--and adoption continues to grow.
“The difference between storage and things that move isn't all that different when you think about the value,” Marsh said. “If you have a car that's only going to go 100 miles a day, batteries are probably the most cost effective, simplest solution. If you have to use a forklift truck or on-road vehicle where energy density, range and fast fueling are important, fuel cells make a lot of sense. And then if you start to think about international travel, say from the U.S. to Europe, there's a lot of pressure on the airline industry because about 2.6 percent of the carbon footprint in the world actually has to do with airlines. Probably for those types of applications, biofuels make sense, while for regional aircrafts, fuel cells and hydrogen make sense. When we think about it, it's really not that much different when there are places where gasoline makes sense, places where diesel fuel makes sense, and places where jet fuels make sense.”
Utilities across the country are ramping up interest in using green hydrogen to power their facilities.
“NYPA (New York Power Authority) has so much hydropower, and hydropower is almost perfect for making hydrogen because you can use electrolyzers to generate hydrogen, which can either be put back on the grid or used for fuel, so there’s a lot of work going on at NYPA and actually all the utilities," Marsh said. "You also see National Grid looking to convert their natural gas pipeline in the UK to hydrogen. They’re looking to use stranded wind power in the North Sea because there are times when electricity prices are going negative, especially when you get past 15, 16 percent renewables on the grid. They're looking to take those electrolyzers and generate hydrogen and put that in their present pipeline."
Similar work is going on at SoCal Gas in California and other utilities across the country.
“There are many apps where hydrogen is the only solution," Marsh said. "There are other apps where hydrogen is not as good a solution. That's how I think a lot of the utilities are thinking about it. You've got hydrogen that they’re storing that you can put back on the grid with fuel cells, or that hydrogen can be used for fuel or industrial applications.”
Looking ahead
Plug Power has set its sights on microgrids as global interest grows in increasing energy resiliency and capacity without requiring centralized infrastructure investment.
“It's an area that’s evolving and developing,” Marsh said. “We do have a couple of programs going on today with microgrids. I think that's a really interesting emerging and evolving market over the next decade. I think there are certain apps in which you can have some level of scale, which will help drive down costs, so it becomes more and more competitive. I think it's pretty natural when you think about solar, especially community solar. If you want to do it somewhat independently of the grid, you can do electrolyzers and fuel cells and have very little dependency on the grid. And I think ultimately you can be lower cost than the grid and not have all those dependencies on long distance transmission lines and all the security issues. I think it has more growth at a 2030ish type date, so I think there will be lots of interest in projects at the beginning of the market in this decade. I think it's the following decade that it really takes off.”
The company recently announced an agreement to procure renewable electricity from Brookfield Renewable Partners to help facilitate its annual green hydrogen production.
The facility will be one of the first green hydrogen plants in the country and is anticipated to be part of a future network spanning across North America.
“Plug is going to build five new hydrogen generation plants across the U.S. over the next four years,” said Marsh, citing locations in the Northeast, Southeast, Midwest and California. “We have the capability to take renewable electricity itself and electrolyzers to create green hydrogen, so this is both kind of a rich technology company and a rich energy company.”