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Has Plug Power pulled the plug on its upstate New York facility?
In 2021, top elected officials in New York state promised that Plug Power, a nascent company in the growing hydrogen industry, would build a large hydrogen fuel production facility in the Buffalo-Rochester area. It was supposed to make the state an industry leader.
Today, the project is looking more like a warning sign about the perils of being a first-mover in the unproven hydrogen business.
It wasn’t supposed to be this way. Plug Power, an American hydrogen and fuel cell producer founded in 1997, believed it would capitalize on rising demand for the liquid fuel when it broke ground at its hydrogen production facility at Genesee County’s Science, Technology and Advanced Manufacturing Park in 2021, a project known colloquially as STAMP. Heavy polluting industries like steel and transportation were chomping at the bit to strike supply deals for hydrogen, a liquid fuel that produces no carbon when burned. And this New York plant would on paper be particularly attractive from a climate perspective: It would be powered by hydroelectric dams at Niagara Falls, offering a potential carbon reduction of an estimated 14,000 tons of CO2 per year. It would also be the largest project of its kind in the Northeast.
Three years later and the project appears to be on ice, according to a phone call recording between New York county officials and a real estate developer that was obtained by Heatmap News.
Construction stopped in January, per the call, as did work Plug Power promised to do on an electrical substation that will also power a neighboring semiconductor manufacturing plant. Now energy-hungry data center developers are bidding to pick up the substation work instead in exchange for a spot at STAMP and access to some of the remaining hydroelectricity, and county officials are looking at buying Plug Power’s electrical equipment.
It is unclear whether the hydrogen production plant will ever be completed.
“They’ve put things on hold and now we’re coming to pick up the pieces,” Chris Suozzi, an executive vice president at the Genessee County Economic Development Authority, told one bidder – PRP Real Estate Management – on a call last month. PRP taped the call and shared it with us after it was first reported by local news nonprofit InvestigativePost. Suozzi also said on the call: “They’re not ready to go. They’re on pause. We don’t know what’s going to happen with them at this point.”
The New York Plug Power plant’s problems should be familiar to anyone in the climate tech startup space but for the unfamiliar, the company’s rapid growth seems to have run headlong into struggles with cash. A year ago Plug Power said in an investor filing there was a “substantial” concern the company may not have “sufficient funds to fund [its] operations through the next 12 months.” So problematic are Plug’s financial woes that they’ve become a political target; after the Energy Department offered a $1.6 billion conditional loan commitment to Plug for building hydrogen production plants, Republicans in Congress called for an inspector general investigation into the move.
But the New York production facility won’t benefit from the potential loan either. We’ve learned from two sources familiar with the matter that the project is not included in its potential loan application currently pending before DOE.
Then there has been the rollout of the Inflation Reduction Act. Even though the project relies on carbon-free hydropower, it may not qualify for the IRA’s hydrogen production tax credit because of proposed requirements for fuel to rely on new renewable energy sources (known as “additionality”). This has been a major sticking point in implementation of the credit, and Plug Power is quoted in InvestigativePost last week linking the work stoppage at the production facility on waiting for the final regulation implementing the credit. This is even as the company uses the yet-to-be finalized credit in its financial analyses for other hydrogen facilities in operation today, like this one in Georgia.
Environmental justice issues have also been a drag on development. The native Tonawanda Seneca Nation is opposed to the entire industrial park because of the resulting impacts on wildlife, noise and the visual landscape. In April, the Fish and Wildlife Service revoked a necessary permit for a wastewater treatment pipeline that would be used by companies at the park.
Earthjustice attorney Alex Page – who is working with the Nation to fight the project – told me the tribe was told last year by the Energy Department that Plug Power had withdrawn the New York site from its loan application. The Nation will continue to fight the project and DOE’s loan financing to Plug Power on the chance that money could be reprogrammed to the industrial park. Page said: “The Nation remains very, very much opposed.”
We sent Plug Power multiple requests for comment as well as Suozzi. A representative for Plug Power declined to answer questions about the project. I got a text from a number listed for Suozzi asking to chat later, but I didn’t hear back before publication.
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State legislatures are now a crucial battleground for the future of renewable energy, as Republican lawmakers seek massive restrictions and punitive measures on new solar and wind projects.
Once a hyperlocal affair, the campaign to curtail renewable energy development now includes state-wide setbacks, regulations, and taxes curtailing wind and solar power. As we previously reported, Oklahoma is one of those states – and may as soon as this year enact mandatory setback requirements on wind power facilities, despite getting nearly half its electricity from wind farms. According to a Heatmap Pro analysis, these rules would affect 65 of Oklahoma’s 77 counties.
Oklahoma is far from alone in potentially restricting land use. In Arizona, the State House last month passed legislation that according to one analysis would lock wind developers off more than 90% of all land in the state. Roughly half of the remaining available acreage would be on Native tribal lands and in or near national parks, which are especially tough areas to build wind turbines. The bill is currently pending before the state Senate. There isn’t much wind energy in Arizona but utilities, who’ve been mostly mum on the legislation so far, have been trying to build more wind and solar in order to wean off coal and gas power. Unfortunately, according to the Arizona Republic, this legislation was reportedly prompted by the backlash to a specific new wind project: Lava Run, a 500-megawatt wind project in the state’s White Mountains opposed by nearby residents.
When asked if the project would ultimately be built, Repsol – Lava Run’s developer – simply told me the company “believes that wind energy in Arizona represents an opportunity to benefit local communities and the state as a whole.”
Republican states have passed legislation to restrict renewables development in certain areas before, so this isn’t exactly a novel development. Florida last year banned all offshore wind projects, and in Ohio, a recent law empowering localities to block solar and wind projects has significantly curtailed industry investment in the state. Wisconsin Republicans are trying to enact similar legislation as soon as this year.
But the sweeping quickness of this legislative effort is striking – and transcends land use rules. Elsewhere, development restrictions may come in the form of tax increases, like in Idaho where the chief revenue committee in the state House has unanimously approved legislation that would institute a per-foot excise tax on individual wind turbines taller than 100 feet without local approval. (The average wind turbine is 320-feet tall.) In Missouri, Republican state legislators are advancing legislation that would create additional taxes for building solar projects on agricultural land, a proposal that echoes an effort underway in the U.S. Congress to strip tax benefits from such projects. And Ohio Republicans have introduced plans to axe all existing state subsidies for solar project construction and operation.
Then there’s the situation in Texas, where state Republican lawmakers are expected to revive a bill requiring solar and wind projects to get express approval from the Public Utilities Commission – a process that fossil fuel projects do not have to go through. The state is the nation’s top producer of renewable energy, generating over 169,000 gigawatt-hours last year.
The legislation passed one legislative chamber in the previous session and environmental activists are starting to sound the alarm that it could get even greater traction this go-around. Luke Metzger, executive director of Environment America’s Texas division, told me that if it becomes law, it would likely undermine investor confidence in developing solar and wind in Texas for the foreseeable future. “It’s very unclear if they could get a permit” under the bill, Metzger said. “If some wealthy Texans didn’t want a solar farm near their ranch, they could convince the PUC to reject their permit.”
Metzger said he is also worried that Texas acting to restrict renewables would produce similar regulation in other parts of the country given the state’s legacy role as a conservative policy braintrust.
“You could have this ripple effect that could end the industry,” Metzger said, “at least in several other states.”
The aggressive and rapid approach sweeping state legislatures has yet to get a national spotlight, so I'm curious how the renewables trade groups are handling these bills.
I asked American Clean Power and the Solar Energy Industries Association if they have any data on the rise of anti-renewables legislation and whether they have comments on this trend. Neither organization responded with data on how many states may soon pass renewables restrictions, but they did get back to me quite fast with comments. SEIA provided a statement from Sarah Birmingham, their vice president of state affairs, noting that energy demand “is rising across the country and we need all the electricity we can get, fast.” The group also pointed to polling it commissioned on solar energy popularity in Texas and a report it just happened torelease in January touting the benefits solar can provide to the state’s revenue base.
ACP meanwhile provided me with a similar statement to SEIA’s, defending renewables and criticizing state bills restricting solar and wind project development.
“Reducing their growth at state and local levels stifles innovation, raises consumer energy costs, and hinders a cleaner, more reliable grid, leaving communities vulnerable to energy shortages,” said spokesman Jason Ryan.
It’s clear some legislators agree with ACP. In Montana, legislation targeting wind turbine height is stuttering after a large cadre of industry representatives and property owners complained it would kill development entirely and kneecap tax revenue to the sparsely populated state. And in Mississippi, lawmakers appear to have abandoned efforts to enact a one-year moratorium on wind turbines for a study on the industry’s impacts on agriculture.
But it’s only March. I guess we’ll have to wait and see how aggressive – and how public – the fight over these bills this year will become.
A conversation with Katharine Kollins of the Southeastern Wind Coalition
This week’s conversation is with Katharine Kollins of the Southeastern Wind Coalition, an advocacy group that supports offshore wind development in the American Southeast. I wanted to talk with Katherine about whether there are any silver linings in the offshore wind space, and to my surprise she actually had one! Here’s to hope springing eternal – and Trump leaving Coastal Virginia intact.
The following conversation has been lightly edited for clarity.
Tell me about the Southeast. What does offshore wind look like there?
The Southeast is interesting. In Virginia, we have a project that is more in the first mover status – the very large Coastal Virginia wind project – which is already under construction.
As you move further south, I would say all of those projects are later stage than what we see in the Northeast. We get a taste of both of those project stages and how the current administration is affecting them. I believe that the Coastal Virginia wind project will continue construction. They’re already a year and a half into a three year phase of construction. That project is expected to be generating electricity next year.
What about the rest?
The rest – no other project has an offtake agreement in the Southeast. North Carolina is getting closer to defining an offtake agreement through the state’s carbon plan process. That’s a back and forth between Duke Energy and the North Carolina Utilities Commission to produce a least-cost electricity portfolio that also gradually reduces the state’s carbon emissions, and offshore wind is as far in that process as we have ever seen in the state. Right now, the utility is responsible for issuing an acquisition RFI (request for information) – it does put the request out there for the developers in the lease areas off of North Carolina and ask them to submit rough estimates for what their projects might cost to be included in Duke’s portfolio. They’re in the process of that and it needs to wrap up by July 1st.
Before we move on to Coastal Virginia, is it your hope this state level effort further south is able to progress through Trump?
Yes. Even in a best case scenario, we’re still looking at a 2032 or 2033 [completion date]. I still think that’s possible.
Have you seen similar conflicts in the Southeast over stuff like wildlife that we see in the Northeast?
We certainly hear those arguments but they don’t come out as strongly. That could be because projects just aren’t as far along as they are in the Northeast – we don’t have any cable landing sites yet. Our projects are all further offshore than many of those in the Northeast, so they don’t come with the same visual impact concerns which is helpful.
I think as we get further in the development process, certainly there will be more conversations around those things but part of what our organization does as well is come in early and try to talk to folks so there’s more information out there for citizens to understand what offshore wind might really mean, what it might feel like, what it might mean for the economy and the environment – before we start choosing a cable landing site. We’ve got a good runway here.
On Coastal Virginia, my concern is that there seems to be enough time for some shenanigans to go on. Is it just your hope here that the project is able to continue without impediment?
I would say hope but it’s also reasonable-ness. This project has already invested $6 billion of ratepayer funds to generate 2,600 megawatts of electricity. To pull the plug on that would mean the federal government was telling Virginians that even though they spent $6 billion dollars to build clean energy development off their coast, the federal government could step in and take that away.
I don’t think that is a reasonable thing to do. So my hope is that the project is able to continue construction and generate that clean electricity for Virginians.
You’ve seen too, a lot of support – bipartisan support – for CVOW. Jen Kiggans, the congresswoman from the Hampton Roads area, has been more outspoken than many in Congress about the importance of the economic value of the CVOW project as well as the need for new electricity and the demand this project is going to help meet.
Have you found in light of the recent election that organizations like yourself are helpful for offshore wind development, and do you feel like more voices are needed to speak out on what the Trump administration has done? We haven’t seen any litigation or blue states in the Northeast stridently or forcefully go to bat yet.
I think there’s many issues folks are grappling with right now and deciding where to put their political capital. Those processes are still under way. There are so many places to focus our attention right now and just a lot on Congress’ plate right now, so they’ve got to figure out which issues they are going to spend the most time on. And what’s winnable for them.
There are a lot of things folks are focused on right now. And maybe that’s part of the plan – spread our people’s ability to speak, or dilute the ability to speak. If you look at the trade associations and NGOs working on offshore wind, we’re working harder than ever. We are consistently looking at, who do we get the message out to about the benefits of offshore wind?
When you think beyond the organizations like ours that speak explicitly to the benefits of offshore wind – could we use more? Always. You can always use more voices speaking out about an energy technology that is very much part of our future, part of our economic and environmental future, and I don’t think you could have too many people speaking out in favor of offshore wind.
If we’re thinking about politicians, right now there’s a lot on people’s plate. The dust has yet to settle.
Here are the week’s top conflicts around clean energy in the U.S.
1. Barnstable County, Massachusetts – The SouthCoast offshore wind project will now be delayed for at least four years, developer Ocean Winds said on Friday, confirming my previous reporting that projects Biden seemed to fully approve were still at risk from Trump.
2. Albany County, New York – A judge in this county has cast a cloud over tax abatement calculations for essentially all solar and wind projects in the state.
3. Greene County, North Carolina – No more new solar farms here, at least for now.
4. Logan County, Ohio – Sayonara, Grange Solar.
5. Fannin County, Texas – The battery backlash we’ve warned you is on the horizon has spread to the small town of Savoy, north of Dallas, where residents are protesting en masse against an Engie battery storage project under construction.