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Spotlight

The Collapse of the Northeast’s Biggest Hydrogen Plant

Has Plug Power pulled the plug on its upstate New York facility?

Hydrogen.
Genesee County Economic Development Center / Getty Images / Heatmap

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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Spotlight

Meta’s Bacterial Mystery Could Poison the Data Center Well

Water pollution in Wyoming has big implications for the future of data center development.

A data center and water pollution.
Heatmap Illustration/Getty Images

Did a Meta data center introduce a rare, dangerous bacteria into the sewers system of Wyoming’s capitol city? It’s an environmental pollution mystery with an answer that could decide the future of American AI infrastructure development.

Our drama begins in Cheyenne, Wyoming, where the city’s board of public utilities just wrapped up a lengthy investigation into the presence of Cupriavidus gilardii, a potentially lethal bacteria resistant to heavy metals, in the city’s wastewater treatment systems. Apparently, in February, board staff detected the contamination and shut off public access to the city’s water reuse system, a supply of treated non-potable water fed with treated wastewater and used for lawns, athletic fields, and other green spaces. Officials were worried that spraying this water could release into the environment a bacteria found to cause fatal health outcomes in immunocompromised or elderly people who are infected by it.

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Q&A

How Big of a Problem Is Data Center Noise?

A conversation with Ross Marchard of the Taxpayers Protection Alliance

The Q&A subject.
Heatmap Illustration

This week’s conversation is with Ross Marchard, executive director for the Taxpayers Protection Alliance, a center-right advocacy group that focuses on what it sees are onerous policies potentially hindering responsible collection and use of tax dollars. TPA’s position on AI clearly skews pro-free market, as they’ve recently defended Anthropic from Trump administration attacks. TPA also recently took on the mantle of defending data centers from noise complaints, publishing a paper on Tuesday “debunking myths about data centers being excessively noisy.” The paper references various analyses of data centers by state legislators and local regulators to argue that claims the sector is generally noisy are false.

I asked TPA’s executive director to chat with me about why and how the organization will try to quell these fears. The conversation was really interesting so I decided to share it with you in full, sans light editing for clarity and consistency.

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Hotspots

The Electro-Magnetic Freakout on the Cape

And more of the week’s news around project development.

The United States.
Heatmap Illustration/Getty Images

1. Barnstable County, Massachusetts – I have a whopper of an update on the Vineyard Wind project, which might be in operation but risks becoming fodder in the fight against offshore wind.

  • Like all offshore wind projects, Vineyard Wind has to send power to the coastline via cable. One of the three sites where these giant power lines land is Barnstable, a small shore community, where longtime residents for years have voiced concerns about electromagnetic fields or EMF.
  • Concerns about EMF are comparable to those about infrasound from data centers. We do not know whether these concerns are really rooted in legitimate health impacts, as I have written, but regardless this remains a common concern raised around large high-voltage power lines, including those for offshore wind projects.
  • On June 30, the town’s board of health heard from a group of Barnstable residents who claim to have measured EMF from the town’s wind cable. The same group, Save Greater Downes Beach, had unsuccessfully sought to stop the cables through litigation and public pressure.
  • This board of health meeting was controversial: Ahead of the meeting, the director of Sierra Club’s Massachusetts chapter wrote the board of health requesting their testimony be limited and no action be taken on the findings. “Concerns being raised about electromagnetic field exposure associated with Vineyard Wind 1’s underground export cables are not only invalid but outside of the Board of Health’s jurisdiction,” wrote chapter director Vick Mohanka, according to a copy of the letter posted to Facebook by anti-wind activist Susanne Conley.
  • This Sierra Club chapter was right to be concerned about how this meeting would affect Vineyard Wind. I watched the lengthy testimony before the board of health. Activists presented a case that the town should implore regulators with authority to deeply study the wind farm cables. They asked the board of health to back a state study on EMF and put the question before the Massachusetts permitting regulator, the Energy Facility Siting Board.
  • “We’re not asking the board to place any restrictions or limitations on the project at this time,” Gary Peters, a local medical professional and member of Save Greater Dowses Beach, told the board. “We’re asking you to put that ball in the court of EFSB.”
  • The board was receptive to this request. Board chair F.P. Lee told the group he would “take this under advisement” and said he’d talk to their legal department about it. Daniel Luczkow, the board’s vice chair, said he agreed with activists’ feelings that Barnstable residents were “guinea pigs.”
  • “It sounds like the contention is that these levels we’re measuring are much, much higher than the information given when the project was started,” Luczkow said. “We’re the only place on the planet, maybe, that actually runs these [cables] through a populated area and we have no idea what type of damage they’re causing?”
  • Should Barnstable strenuously take this issue up, I would predict it only be a matter of time before it’s also raised by organs of the federal government. Health and Human Services Secretary Robert F. Kennedy Jr. last year asked the Centers for Disease Control to study negative health impacts from precisely this infrastructure. This kind of hyperlocal squabble is often what manifests as conversation in anti-wind opposition circles, and Vineyard Wind was already causing PR headaches for the energy transition.
  • Avangrid did not respond to a request for comment.

2. Prince William County, Virginia – Northern Virginia is officially hostile territory for data center developers, and I learned about it through a call from my mom.

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