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When most of us think about decarbonizing transportation, we think first about electric vehicles. And rightfully so: American automakers have been lining up with aggressive new promises to electrify their fleets over the next decade.
But Plug Power has a message for companies building out clean fleet strategies: Don’t ignore green hydrogen — a fuel that doesn’t emit any carbon dioxide when it’s used to power fuel cells. The manufacturer, based in upstate New York, is positioning hydrogen as a fuel that can step in where electric batteries fall short — think long ranges, heavy payloads and extreme temperatures.
Plug Power has grown rapidly over recent years, building out an impressive list of global companies — Amazon, Walmart, The Home Depot — that are using its hydrogen-powered forklifts and delivery vehicles. It’s beginning to build plants all over the U.S. to produce green hydrogen and expand its impact.
“Green hydrogen unlocks the potential of a clean energy future,” said Preeti Pande, chief marketing officer of Plug Power, during a virtual symposium the company held in early October.
So what exactly is “green hydrogen”? The term refers to hydrogen fuel created in plants using entirely renewable energy sources. Currently, only 1 percent of hydrogen fuel is produced this way — leaving the other 99 percent as “gray” or “brown” hydrogen produced using fossil fuels.
The market for green hydrogen, according to a report by PwC, could be worth $300 billion by 2050. Plug Power sees itself growing into a $3 billion company by 2025.
Here are five things to know about green hydrogen’s future in transportation:
1. The green hydrogen future depends on the renewable energy future
Plug Power’s vision of a green hydrogen future depends a lot on the amount of renewable energy that the U.S. builds out.
The company is already working on three green hydrogen plants, the first of which will be completed in Rochester, New York. About half of the electricity generated in New York state already comes from renewables — mostly hydro and nuclear. But the company said it’s also looking at building dedicated solar arrays or wind farms to power its plants and achieve 100 percent green hydrogen.
2. Green hydrogen can fill a unique gap in transportation
Plug Power is not looking to compete with General Motors on passenger vehicles. Instead, the company sees green hydrogen as a solution for types of ground transportation that would be harder to decarbonize, such as long-haul trucking or delivery vans.
“In mobility, Plug is specifically focused on commercial fleet applications,” said Keith Schmid, the company’s general manager of new markets and president of new product development, at Plug Power’s symposium.
One of Plug Power’s first moves into this space involves a partnership with the Renault Group. The two companies are developing a hydrogen-powered delivery van, H2-Tech, under their new Hyvia brand.
Plug Power says the vans will have several advantages over battery-electric models, the biggest being that hydrogen fuel won’t take up as much space and weight as batteries do — meaning the trucks can have longer ranges and larger payloads.
3. Existing fossil fuel infrastructure can play a role in the transition to hydrogen
One big barrier to adopting green hydrogen as a fuel source comes down to supply. Plug Power is rapidly scaling the amount of hydrogen it produces to meet this demand, but it also needs to figure out a way to transport and store all of that fuel.
That’s where natural gas pipelines could come into play. Rather than abandon that vast infrastructure network, Plug Power and its partners say it could be part of the solution.
“We’ve got a model that we’ve proven works to move natural gas, and we believe it can work to move hydrogen,” said Chad Zamarin, who also spoke at the Plug Power symposium. Zamarin is senior vice president of corporate strategic development at Williams, a company whose pipelines move 30 percent of the country’s natural gas.
4. Policy and funding will go a long way
Hydrogen companies such as Plug Power have attracted plenty of funding on their own — the company has some $5 billion in cash on hand — but public funding also has potential to accelerate the industry.
President Joe Biden’s infrastructure package could include as much as $8 billion dedicated to establishing “hydrogen hubs” around the country, although not all of that hydrogen production would be powered by renewables.
Nonetheless, it could send a powerful signal to investors. “They welcome public funding, specifically when the funding is designed to derisk new technologies and new solutions,” said David Andrews, senior managing director and energy group COO at investment banking firm Evercore, who spoke at the Plug Power symposium.
Tax credits for the production of green hydrogen could also help make the fuel more cost-competitive. For example, one proposal making its way through Congress would offer a $3 per kilogram credit to hydrogen facilities, with the goal of eventually bringing the cost of green hydrogen to $1 per kilogram.
5. Green hydrogen has potential beyond transportation
Much of Plug Power’s existing and potential customers see hydrogen as a solution for fueling vehicles — whether a forklift or a delivery van.
But Plug Power’s ambitions for green hydrogen go far beyond that. The company is also developing stationary fuel cells that could power data centers or even microgrids. At Plug Power’s symposium, a representative from Microsoft said hydrogen fuel cells could one day replace the backup diesel generators at its data centers all over the world.
Plug Power is also targeting aviation, and through a partnership with Airbus is working to develop zero-emissions aircraft by 2025.
Put another way, almost anywhere we currently use fossil fuels, Plug Power sees an opportunity for green hydrogen.
“A green energy future is upon us, ready to happen,” said Plug Power CMO Pande.
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