INTERVIEW - Plug's CEO confident about loan deal and future under Trump
Andy Marsh, CEO of Plug Power Inc (NASDAQ:PLUG), is very optimistic about the company’s prospects of finalising its long-awaited loan guarantee deal with the US Department of Energy (DOE) but, in the meantime, Plug is also looking to bring in an equity investor to support the work on its next green hydrogen plant, Marsh told Renewables Now.Plug is a hydrogen supplier that also manufactures its own electrolysers and fuel cell power systems, and is known for working on establishing an end-to-end green hydrogen ecosystem.THE DOE LOANIn mid-May 2024, the company got a conditional commitment from the DOE for an up-to-USD-1.66-billion (EUR 1.61bn) loan guarantee that is crucial for its ability to build as many as six additional green hydrogen production facilities at scale.According to Marsh, there is a “high probability” that the company closes out the loan agreement before the change in the administration.“We're just really dotting the I’s and crossing the T’s on the legal documentation so that we can finalise it sometime in the next couple of weeks,” Marsh said in an interview. “At around 5.5%, the DOE loan will dramatically reduce the cost of capital, which makes the return on the investment much quicker.”He added that regardless of whether the deal is closed, the company has equity investors keen on participating in its expansion plans. “We will probably bring an equity investor in even after the DOE loan is finalised,” he noted.THE 45V FINAL RULESOn the topic of the recently-released final rules for the section 45V Clean Hydrogen Production Tax Credit, Marsh stated that they are “much, much better than they were” and specifically underscored some of the changes such as those associated with nuclear power and renewable energy credits, as well as the extension of the transition period for the time-matching requirement.“I do think, though, that there are real opportunities to engage with the Trump administration. We think the three pillars across the board are not part of the legislative intent, and we think the Trump administration may be much more interested in reducing those regulations than we've seen under the Biden administration. We're really pleased with the progress, but we think that still there's areas for improvement,” Marsh commented.At the same time, the CEO is not that worried about the possibility of the incoming administration backpedalling on clean energy commitments.“If you think about it, 80% of the IRA projects are going on in red congressional districts today and so much of our projects and our supply chain is in areas which benefit Republican Congress. Hydrogen quite honestly is going to be vital for the long-term energy independence of the US and not only is it a good market for our own energy security, but it is also a good market potentially, especially with derivatives like green ammonia, for exporting. So I think what we do aligns with the Republican goals, and if you go back to 2018, there was major legislation to support tax credits for hydrogen fuel cells which actually happened under a Republican Congress and a Republican president,” Marsh explained.PROJECTS ADVANCEMENTPlug’s head is also confident that with the final rules in place, there will be an acceleration in the announcements of final investment decisions for green hydrogen projects, which should result in the placement of firm orders for electrolysers. Plug itself expects to step up the construction of Project Limestone in Texas once the DOE loan is concluded. It is the first of the six plants the company intends to build using the money.Marsh believes that building the facility in Texas would allow the company to rely solely on its own hydrogen production to serve existing customers. Whether the company would invest in the construction of more plants beyond those six would depend on the growth of the hydrogen economy, he pointed out.“I think 2024 was a year for us to really make sure we strengthen our financials and I think that's one of the reasons you're seeing the stock price improved. I do expect that we will continue to be looking at investment opportunities in 2025, but I think a lot of those investment opportunities will be done in partnerships with some really viable companies,” he concluded.
Andy Marsh, CEO of Plug Power Inc (NASDAQ:PLUG), is very optimistic about the company’s prospects of finalising its long-awaited loan guarantee deal with the US Department of Energy (DOE) but, in the meantime, Plug is also looking to bring in an equity investor to support the work on its next green hydrogen plant, Marsh told Renewables Now.
Plug is a hydrogen supplier that also manufactures its own electrolysers and fuel cell power systems, and is known for working on establishing an end-to-end green hydrogen ecosystem.
THE DOE LOAN
In mid-May 2024, the company got a conditional commitment from the DOE for an up-to-USD-1.66-billion (EUR 1.61bn) loan guarantee that is crucial for its ability to build as many as six additional green hydrogen production facilities at scale.
According to Marsh, there is a “high probability” that the company closes out the loan agreement before the change in the administration.
“We're just really dotting the I’s and crossing the T’s on the legal documentation so that we can finalise it sometime in the next couple of weeks,” Marsh said in an interview. “At around 5.5%, the DOE loan will dramatically reduce the cost of capital, which makes the return on the investment much quicker.”
He added that regardless of whether the deal is closed, the company has equity investors keen on participating in its expansion plans. “We will probably bring an equity investor in even after the DOE loan is finalised,” he noted.
THE 45V FINAL RULES
On the topic of the recently-released final rules for the section 45V Clean Hydrogen Production Tax Credit, Marsh stated that they are “much, much better than they were” and specifically underscored some of the changes such as those associated with nuclear power and renewable energy credits, as well as the extension of the transition period for the time-matching requirement.
“I do think, though, that there are real opportunities to engage with the Trump administration. We think the three pillars across the board are not part of the legislative intent, and we think the Trump administration may be much more interested in reducing those regulations than we've seen under the Biden administration. We're really pleased with the progress, but we think that still there's areas for improvement,” Marsh commented.
At the same time, the CEO is not that worried about the possibility of the incoming administration backpedalling on clean energy commitments.
“If you think about it, 80% of the IRA projects are going on in red congressional districts today and so much of our projects and our supply chain is in areas which benefit Republican Congress. Hydrogen quite honestly is going to be vital for the long-term energy independence of the US and not only is it a good market for our own energy security, but it is also a good market potentially, especially with derivatives like green ammonia, for exporting. So I think what we do aligns with the Republican goals, and if you go back to 2018, there was major legislation to support tax credits for hydrogen fuel cells which actually happened under a Republican Congress and a Republican president,” Marsh explained.
PROJECTS ADVANCEMENT
Plug’s head is also confident that with the final rules in place, there will be an acceleration in the announcements of final investment decisions for green hydrogen projects, which should result in the placement of firm orders for electrolysers. Plug itself expects to step up the construction of Project Limestone in Texas once the DOE loan is concluded. It is the first of the six plants the company intends to build using the money.
Marsh believes that building the facility in Texas would allow the company to rely solely on its own hydrogen production to serve existing customers. Whether the company would invest in the construction of more plants beyond those six would depend on the growth of the hydrogen economy, he pointed out.
“I think 2024 was a year for us to really make sure we strengthen our financials and I think that's one of the reasons you're seeing the stock price improved. I do expect that we will continue to be looking at investment opportunities in 2025, but I think a lot of those investment opportunities will be done in partnerships with some really viable companies,” he concluded.
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