In addition to building capacity for the production of green hydrogen at various locations, Plug Power is also pressing ahead with the development of a trading system for green hydrogen. The US hydrogen and fuel cell company is relying on a spot price model.
As part of the development of a more flexible and dynamic market for green hydrogen, US fuel cell and hydrogen specialist Plug Power has launched the first ever spot pricing programme for liquid green hydrogen. According to the RENIXX Group, this marks an important step in the industry. In future, the price information service S&P Global Platts will publish weekly prices based on Plug Plant production.
Several spot agreements signed with large organisations
Hydrogen buyers now have the opportunity to purchase liquid green hydrogen from Plug Power’s production plants on demand and without the restrictions of long-term take-or-pay agreements.
The flexibility offered by this new spot market should enable customers such as retailers, industrial companies and power plant operators to efficiently optimise their hydrogen sources and respond quickly to fluctuating energy demand without being locked into long-term contracts.
Plug Power sees an initial indication of the success of the new marketing approach in the fact that the company has concluded agreements on spot prices with several important players in the industry. According to Plug Power, a spot agreement with one of the largest industrial gas companies underlines the broad support of the industry. Looking ahead, the impact of this innovative pricing model could redefine supply dynamics and cost structures in the green hydrogen market segment.
„We believe this initiative will increase trust and transparency in the industrial hydrogen market. In five years, we anticipate most buyers will tap into the spot market to benefit from the flexibility it offers them“, comments Plug Power CEO Andy Marsh on the new offering. “As our hydrogen demand experiences peaks and valleys, our unique spot pricing initiative will allow us to run our plants more efficiently, maintaining economies of scale and scope, and ultimately, maximizing return on capital investment“, adds Plug Power President Sanjay Shrestha.
Plug Power CEO expects acceleration of the market launch of green hydrogen
Every Thursday, S&P Global Platts will publish a price for the following week based on current supply and demand. Customers must have a spot agreement with Plug Power. If customers wish to purchase hydrogen at the published price, Plug will enter into a transaction agreement to accept a customer tanker at one of its plants for filling.
All Plug-operated plants in Woodbine, Georgia, Charleston, Tennessee, and St. Gabriel, Louisiana, which have a combined production capacity of approximately 45 tonnes of liquid hydrogen per day, participate in the spot pricing programme. Plug Power claims to be the third largest producer of liquid hydrogen in North America and the only producer of green liquid hydrogen on a commercial scale.
By pioneering this transformative change, Plug Power aims to solidify its leadership role in the green hydrogen ecosystem while making an important contribution to the global market for sustainable and renewable energy solutions.
