News and Highlights
- We have updated our blue hydrogen map to reflect that Copenhagen Infrastructure Partners’ (CIP) potential blue ammonia plant will be located St. Charles Parish, Louisiana.
- Plug Power held its quarterly conference call yesterday, but provided few project updates, other than to say that its Georgia facility has yet to produce liquid hydrogen.
- NextEra announced last week the sale of two natural gas pipelines and continues to push its Real Zero project in Florida.
Green Project News and Announcements
Plug Power held its quarterly earnings call yesterday, providing a video tour of its new green hydrogen facility in Georgia. Though the 15,000 kilogram per day plant is already producing gaseous hydrogen, liquid production apparently hasn’t occurred yet. Plug Power is guiding to a second quarter start for the liquid portion of its plant, but there are just a few weeks left before the third quarter begins. In our view, the delays are disappointing, given Plug’s leadership in the green hydrogen space. The Georgia plant first broke ground in the summer of 2021 and initial plans called for a commercial start in 2022. However, most all of Plug’s project start dates have proved aggressive, with Georgia no exception. For comparison, consider that Venture Global took just 29 months from final investment decision (FID) to initial production at a liquified natural gas (LNG) facility now capable of exporting over 1.5 billion cubic feet per day. In energy equivalent terms, Plug’s Georgia plant will produce about 0.1% of what Venture Global’s Calcasieu Pass LNG facility does. Plug Power also didn’t provide updates for its other green hydrogen projects but suggested that it would focus on building larger plants, like those it has underway in New York and Texas. It seems that Plug has discovered that scale reduces unit costs and improves economics. However, the company didn’t really provide much data around that assessment, as its quarterly conference call slides consisted of a couple of slides that look like rough drafts of what a typical public company would produce.
As disappointing as Plug Power’s conference call was, there are few proposals that have made it to corporate presentations that are as eyebrow-raising as NextEra subsidiary Florida Power and Light’s (FPL) Real Zero project. As part of a plan to decarbonize its Florida power plants, FPL’s Real Zero contemplates building 92 gigawatts (GW) of solar capacity, 50 GW of battery storage, and 16 GW of green hydrogen production. In addition, FPL assumes that there will be ~30 GW of excess solar and electrolyzer capacity on the market by 2045 to support its plans. If all of this capacity comes to fruition, FPL plans to burn the produced hydrogen in its existing natural gas-fired power plants. When it comes to Real Zero, we don’t really know where to start. While there are numerous potential holes in this plan, not the least of which is assuming someone will build “excess” solar and electrolysis, the extremely high efficiency loss of the Real Zero scheme is also a red flag. Using renewable electricity to generate hydrogen via electrolysis, only then to burn the hydrogen in a combined cycle (CC) power plant results in an overall loss of about 75% of the initial power produced. It is very difficult to envision a market where this pathway to low-carbon electricity would make much sense and we are having a hard time seeing how Florida power customers would want to see Real Zero implemented. It would make essentially no sense to take renewable power, some of which has been stored in a battery, and then cycle it through two additional inefficient processes (electrolysis and the CC), versus just selling the electrons into the grid. What’s more, it’s not even clear that FPL’s existing power plants could easily shift from natural gas to hydrogen, especially considering they will have about 20 years of less useful life on them by Real Zero’s 2045 start date. Finally, though few utilities would mention it, burning hydrogen in a power plant may not produce carbon, but still generates plenty of nitrogen oxides (NOx), a point environmental groups will not likely let slip off the radar. As a result, when it comes to its chances of succeeding, it seems to us that Real Zero was appropriately named.
