Green hydrogen can be produced by electrolyzers powered with carbon-free energy resources such as solar, wind, hydro and nuclear. Plug Power is contracted to supply 10,950 tons of liquid green H2 per year for Amazon operations.
“By building a complete hydrogen ecosystem from molecule to applications combined with a resilient network of green hydrogen plants around the world — we have made hydrogen adoption easy,” said Andy Marsh, CEO of Plug. “Landing a green hydrogen supply deal with a customer like Amazon validates our multi-year investment and strategic expansion into green hydrogen. We are excited to expand our relationship with Amazon in exploring the use of other hydrogen applications, such as fuel-cell electric trucks and fuel-cell power generation stations that could provide electricity to Amazon buildings and the deployment of electrolyzers in fulfillment centers.”
Plug Power and Amazon have worked for several years on decarbonization fronts. Since 2016, the energy firm has helped the retailer deploy more than 15,000 fuel cells to replace batteries in forklifts at 70 distribution centers.
Amazon says the new green hydrogen supply could provide enough annual power for 30,000 forklifts or 800 heavy-duty trucks used in long-haul transportation. Hydrogen is one of the simplest elements, does not contain a carbon atom and does not emit CO2 when combusted. It also has a higher energy density than many other carbon-neutral resources.
“Amazon is proud to be an early adopter of green hydrogen given its potential to decarbonize hard-to-abate sectors like long-haul trucking, steel manufacturing, aviation, and ocean shipping,” said Kara Hurst, vice president of Worldwide Sustainability at Amazon. “We are relentless in our pursuit to meet our Climate Pledge commitment to be net-zero carbon across our operations by 2040, and believe that scaling the supply and demand for green hydrogen, such as through this agreement with Plug Power, will play a key role in helping us achieve our goals.”
More on the role of Green H2 in Decarbonizing the C&I Sector
Forecast: Hydrogen Energy Storage Market value may reach $119B by 2027
Honeywell Ventures invests in Electrolyzer startup
The hydrogen deal also has a strong investment component for Amazon. Plug has granted it a warrant to acquire up to 16 million shares of Plug common stock, with the exercise price of the first 9 million warrant shares at $22.98 per share.Amazon could vest the warrant in full if it spends $2.1 billion over the seven-year term of the warrant across Plug products, including, but not limited to, electrolyzers, fuel cell solutions, and green hydrogen.
Plug Power is scaling up its domestic and worldwide H2 production capabilities. It expects to reach an average of 70 tons H2 per day by the end of this year and 500 daily tons in U.S. production alone by 2025, according to company projections.
The green hydrogen would begin to replace diesel and other fossil fuels as well as gray H2 (hydrogen created via steam reforming of methane gas, which is carbon-intensive).
Amazon is one of the three biggest U.S. companies in terms of revenue, along with Walmart and Apple. It may be the biggest customer yet for hydrogen in commercial and industrial decarbonization efforts.
Trading for Plug Power shares have jumped close to 12 percent over recent days to nearly $30 per share on the Nasdaq exchange Thursday.
-- -- --
(Rod Walton, senior editor for EnergyTech, is a 14-year veteran of covering the energy industry both as a newspaper and trade journalist. He can be reached at [email protected]).
