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By Sonali Paul
Plug
Power scraps electrolyser plant partnership with Fortescue
- Plug Power questions plant's economics
- FFI wants to use its own electrolyser
technology
- No change to capital cost at $83 million
MELBOURNE, Jan 27 (Reuters) - Plug
Power (PLUG.O) has
walked away from building an electrolyser manufacturing plant in
Australia with Fortescue Metals Group (FMG.AX) as
the economics did not work, Plug Chief Executive Officer Andrew Marsh
said on Thursday.
The project, announced in October 2021, is a key plank in Fortescue's
ambition to become a major green energy company through its Fortescue
Future Industries (FFI) arm and produce 15 million tonnes a year of
green hydrogen by 2030.
Fortescue had planned to build the world's biggest
factory to make
electrolysers with
Plug Power and began construction in Gladstone in Australia's
northeast last February aiming to produce their first electrolyser in
2023.
In a business update on Thursday, Plug Power CEO Marsh said the plant
deal with Fortescue was off.
"One, we decided that we didn't want to build a factory with them
because we saw the economics, we could do better," Marsh said,
according to a transcript of the conference call with analysts.
While Fortescue never announced that the Plug Power partnership had
collapsed, on a quarterly call on Friday, FFI CEO Mark Hutchinson
confirmed the company would be going ahead with the project using its
own technology.
Fortescue will still be spending $83 million on the first phase of the
plant, as originally planned, he said.
"We always expected to cover the whole cost," Hutchinson said.
Fortescue wants to use its own electrolyser technology instead of Plug
Power's technology, although it will buy electrolysers from the U.S.
company for some of its hydrogen projects, Fortescue founder and
executive chairman Andrew Forrest said.
"I think Plug Power is very much locked in to certain technology and
on a production cycle," Hutchinson told analysts on a quarterly call.
"What we're good at here is building things at scale and exactly what
we're going to do on the electrolyser side," he said, adding that it
will be built "on time".
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