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July 20, 2023
By
Polly Martin
Billionaire Andrew Forrest's
Fortescue buys its first US green hydrogen project from cash-strapped
Nikola Motors
![](images/images_07_20_2023/61e8a099cb9cc04ebf39d787f618ca2d.jpg)
A rendering of the proposed Phoenix Hydrogen
Hub.Photo: Fortescue
The Australian
company says the Phoenix Hydrogen Hub could be brought to FID this
year
Fortescue had announced in
January this year that it had signed a wide-ranging memorandum of
understanding with Nikola to co-develop large green H2 projects, with
a particular focus on the Phoenix Hydrogen Hub.
The Australian developer says
that the project, for which Nikola had already purchased 920 acres of
undeveloped land through a subsidiary, is currently going through the
final stages of permitting and is already in the process of procuring
long-lead equipment.
As such, Fortescue plans to bring the project to its board this year
for final investment decision (FID) — the first it will take in the
US.
“This is an exciting opportunity to work towards a fast-moving project
that will lead the way in the US, creating new green industrial jobs
for Americans, while also helping to reduce emissions once production
begins,” said Mark Hutchinson, CEO of FFI.
“The US is now one of the best places in the world to do this, with
the Inflation Reduction Act making it an ideal place to invest in
green energy,” he added.
“This investment by FFI will greatly strengthen one of the country’s
first and most important hydrogen ecosystems and it is a significant
milestone in creating the all-important local connective
infrastructure to accelerate the use of green hydrogen.”
While its previous owner had previously estimated the project would
produce up to 150 tonnes per day, Fortescue has clarified that the
first phase will use a 80MW electrolyser to produce 12,000 tonnes of
liquid green H2 annually — closer to 32.8 tonnes per day, assuming
year-round utilization.
However, the Australian developer
also says the hub will have capacity to scale up in future.
Nikola had in December announced that the hub had been invited by the
US Department of Energy (DOE)’s Loan Programs Office to progress to
the second stage of an application for $1.3bn.
The company confirms to Hydrogen Insight that the application is still
being progressed, with FFI supporting the continuation of this
process.
Nikola is also a member of the Southwest Clean Hydrogen Innovation
Network (SHINe), a consortium that had submitted a concept paper as
the first-stage application for the federal Regional Clean Hydrogen
Hubs programme which plans to spend up to $7bn on between six and ten
hubs.
However, it is unknown whether this consortium was one of the 33 that
the DOE invited to proceed to a full application.
Cash injection
Nikola’s primary focus is zero-emissions heavy-duty vehicles.
Following major losses and an accumulation of $2bn of debt, the
company announced last month it would scale back its other operations
— particularly in the European market — and focus on getting its Class
8 fuel-cell electric trucks to market by this autumn, while keeping
cash spend to below $400m by 2024.
As such, while the truck company had previously floated that it would
aim to take final investment decision (FID) on the Phoenix Hydrogen
Hub in Q3, the sale gives Nikola a much-needed cash injection while
offloading a deprioritised project.
Updated to include confirmation from Nikola of
continuation of DOE loan application.(Copyright)
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