Fortescue turns back to Plug Power for another major green hydrogen electrolyser deal

Andrew Forrest’s iron ore and green energy giant Fortescue Metals has signed its third major green hydrogen supply deal in a week, this time turning back to the US-based electrolyser company Plug Power that was to be its partner for its huge Queensland manufacturing plant.

Fortescue announced overnight that it named Plug Power as the preferred supplier of the 550MW of hydrogen electrolyses it will need for its Gibson Island green hydrogen and ammonia project in Queensland.

The two companies have also signed an MoU that includes potential collaboration on a number of large green hydrogen projects on a global basis, including equity swaps in Fortescue’s proposed Pheonix hydrogen plant and in Plug Power’s Texas hydrogen plant.

Plug Power may also provide electrolyzers, liquefiers, tanker trailers and stationary storage tanks for the Pheonix hydrogen plan, and other green hydrogen production projects in North America.

It is the third major green hydrogen deal announced by Fortescue in little more than a week. Last Thursday it revealed it had been a lead investor with more than $A150 million in the latest fund raising from another electrolyser maker, EH2, and had signed up for a one gigawatt supply deal.

This week, Fortescue signed a long term power purchase deal for part of the output for the 2GW Bulli Creek solar and battery project in Queensland, again to supply power to the Gibson Island project.

But the deal between Fortescue and Plug Power is surprising, given that the two companies earlier this year walked away from an agreement for Plug Power to supply the technology for Fortescue’s electrolyser manufacturing facility in Gladstone.

That manufacturing facility is supposed to enter production in coming months, but it is not yet clear which technology Fortescue will be producing there. And given that, it is interesting that it is turning to Plug Power to supply the electrolysers needed for Gibson Island, rather than its own facility.

Mark Hutchinson, the CEO Fortescue Energy, said the agreements with Plug Power is a major step forward towards making a final investment decision on the Gibson Island project, which is expected to be made before the end of the year and will be discussed at the next board meeting in November.

“It is vital that first movers like Plug Power and Fortescue continue to work together to develop and scale-up the green energy and green hydrogen industries in Australia and North America,” he said in a statement,.

“We believe there is strong demand globally for the green hydrogen we will produce and we must move quickly to meet that demand.”

Plug Power, which hosted its fifth annual one day symposium for investors on Wednesday (US time) said the Gibson Island supply agreement would involve its 10 MW PEM (proton-exchange membrane) electrolysers.

The Gibson Island plans is expected to produce 385,000 tonnes of green ammonia a year for export to Singapore and other south-east Asia countries.

“The proposed 550 MW electrolyzer deal reinforces Plug’s established leadership position in deploying electrolyzer solutions at a global scale,” said Plug CEO Andy Marsh.

“Today, we have taken a meaningful positive step forward in our ongoing relationship with Fortescue, opening up many opportunities to build the green hydrogen economy together in the future.”

The partnership between Fortescue and Plug Power may have been inevitable given that they both regard themselves as leaders in the green hydrogen industry.

“We see the (green hydrogen) market as big as the fossil fuel market, so it’s just enormous,” Hutchinson said during an online appearance at the Plug Power Symposium.

“In our view we have got to get going and so you have some unique companies like Plug and ourselves who are prepared to step out somewhat into the unknown …. to show the world that you can actually make the product economically at scale and globally.”

Hutchinson said of the equity swaps were important “so we can all learn together …. the competition is fossil fuels, not each other.”