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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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Q&A

How the Wind Industry Can Fight Back

A conversation with Chris Moyer of Echo Communications

The Q&A subject.
Heatmap Illustration

Today’s conversation is with Chris Moyer of Echo Communications, a D.C.-based communications firm that focuses on defending zero- and low-carbon energy and federal investments in climate action. Moyer, a veteran communications adviser who previously worked on Capitol Hill, has some hot takes as of late about how he believes industry and political leaders have in his view failed to properly rebut attacks on solar and wind energy, in addition to the Inflation Reduction Act. On Tuesday he sent an email blast out to his listserv – which I am on – that boldly declared: “The Wind Industry’s Strategy is Failing.”

Of course after getting that email, it shouldn’t surprise readers of The Fight to hear I had to understand what he meant by that, and share it with all of you. So here goes. The following conversation has been abridged and lightly edited for clarity.

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Hotspots

A New York Town Bans Both Renewable Energy And Data Centers

And more on this week’s most important conflicts around renewable energy.

The United States.
Heatmap Illustration/Getty Images

1. Chautauqua, New York – More rural New York towns are banning renewable energy.

  • Chautauqua, a vacation town in southern New York, has now reportedly issued a one-year moratorium on wind projects – though it’s not entirely obvious whether a wind project is in active development within its boundaries, and town officials have confessed none are being planned as of now.
  • Apparently, per local press, this temporary ban is tied to a broader effort to update the town’s overall land use plan to “manage renewable energy and other emerging high-impact uses” – and will lead to an ordinance that restricts data centers as well as solar and wind projects.
  • I anticipate this strategy where towns update land use plans to target data centers and renewables at the same time will be a lasting trend.

2. Virginia Beach, Virginia – Dominion Energy’s Coastal Virginia offshore wind project will learn its fate under the Trump administration by this fall, after a federal judge ruled that the Justice Department must come to a decision on how it’ll handle a court challenge against its permits by September.

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Spotlight

The Wind Projects Breaking the Wyoming GOP

It’s governor versus secretary of state, with the fate of the local clean energy industry hanging in the balance.

Wyoming Governor Mark Gordon.
Heatmap Illustration/Getty Images

I’m seeing signs that the fight over a hydrogen project in Wyoming is fracturing the state’s Republican political leadership over wind energy, threatening to trigger a war over the future of the sector in a historically friendly state for development.

At issue is the Pronghorn Clean Energy hydrogen project, proposed in the small town of Glenrock in rural Converse County, which would receive power from one wind farm nearby and another in neighboring Niobrara County. If completed, Pronghorn is expected to produce “green” hydrogen that would be transported to airports for commercial use in jet fuel. It is backed by a consortium of U.S. and international companies including Acconia and Nordex.

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