Plant expected to be one of North America’s largest
Gulf Coast network still dominated by cheap ‘grey’ hydrogen
The LNG infrastructure developer New Fortress Energy is teaming up with Plug Power to bring what will be one of North America’s largest green hydrogen plants to the Texas coast, Plug Power said.
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The future facility in Beaumont will be New Fortress’ first foray into the green hydrogen economy, Plug Power said in a statement Aug. 4. The plant will utilize Plug Power’s polymer electrolyte membrane electrolyzers to produce more than 50 mt/day of green hydrogen with opportunities to scale up further.
“This facility is a model that we intend to replicate in other locations across the country,” Plug Power CEO Andy Marsh said.
The facility will incorporate clean hydrogen into the Gulf Coast’s existing hydrogen network, which is one of the largest hydrogen demand centers in the world. Refiners, ammonia producers and other industries on the Gulf Coast consume nearly 50% of US hydrogen demand, or an average of 14,000 mt/day of hydrogen, according to Platts Analytics data.
Clean hydrogen, however, comprises just a sliver of that total. According to the S&P Global Hydrogen Production Assets database, Linde and Phillips 66 launched a green hydrogen production plant in 2021 with a capacity of 30 mt/day in the Houston area. And in Port Arthur, Air Products, Denbury and Valero operate a 500 mt/day hydrogen plant with two gas-fired steam methane reformers paired with carbon capture, although the captured CO2 is used for enhanced oil recovery.
“The US Gulf Coast is one of the largest clusters of hydrogen consumers in the world, but Plug Power and New Fortress Energy will need to offer competitive prices to edge out existing suppliers, or find customers willing to pay a premium to decarbonize their operations,” said hydrogen analyst Brian Murphy from Platts Analytics. “This project is a step in the right direction towards decarbonizing incumbent hydrogen demand in the US.”
According to Platts assessments, there is a wide gulf between the cost of green hydrogen and hydrogen generated by steam methane reforming, or “grey” hydrogen. Hydrogen produced using PEM electrolysis on the US Gulf Coast was assessed by Platts at $7.66/kg (including capex) Aug. 4, while grey hydrogen was assessed at $1.77/kg, S&P Global Commodity Insights data showed.
Neither Plug Power nor New Fortress responded to questions about the Beaumont facility’s expected hydrogen prices.
The plant will be strategically located on the banks of the Neches River in Jefferson County, Texas, close to end-users, reliable power and pipeline, rail and marine transportation infrastructure, Plug Power said.
New Fortress Energy CEO Wes Edens said that the agreement marks the beginning of an ongoing collaboration with Plug Power.
“Amid an increasingly favorable US policy environment for hydrogen, we are focused on scalable solutions that have a real impact on decarbonization and believe we are uniquely positioned to be an early mover in this vast and rapidly evolving market,” Edens said.