Plug Power today signed a hydrogen supply deal with Amazon starting from 2025.
The hydrogen fuel cell technology provider will supply 10,950 tonnes per year of liquid green hydrogen to fuel Amazon operations, using electrolysers, liquefaction capabilities and cryogenic tankers.
The move dovetails with the e-commerce giant’s goal to fully power its operations with 100% renewable energy by 2025, five years ahead of its original target, and be net zero by 2040.
It marks a highly significant move by Amazon which hitherto has been focusing on wind and solar power in the renewables sector.
Andy Marsh, CEO of Plug, said, “By building a complete hydrogen ecosystem from molecule to applications combined with a resilient network of green hydrogen plants around the world – we have made hydrogen adoption easy. Landing a green hydrogen supply deal with a customer like Amazon validates our multi-year investment and strategic expansion into green hydrogen.”
Plug Power will look to expand its relationship with Amazon in exploring other hydrogen applications, such as fuel-cell electric trucks and fuel-cell power generation stations that could provide electricity to Amazon buildings and the deployment of electrolysers in fulfillment centers. Since 2016, Plug has helped Amazon to deploy more than 15,000 fuel cells to replace batteries in forklifts across 70 distribution centres.
Kara Hurst, Vice President of Worldwide Sustainability at Amazon, said it is proud to be an early adopter of green hydrogen given its potential to decarbonise hard-to-abate sectors such as long-haul trucking, steel manufacturing, aviation, and ocean shipping.
She said, “We are relentless in our pursuit to meet our Climate Pledge commitment to be net-zero carbon across our operations by 2040, and believe that scaling the supply and demand for green hydrogen, such as through this agreement with Plug Power, will play a key role in helping us achieve our goals.”
Dean Fullerton, vice president of Global Engineering and Security Services at Amazon, said it plans to grow the number of fuel cell battery forklifts to 20,000 across 100 fulfillment centers by 2025.
“That’s just the start,” he said. “Across Amazon’s operations, we’re exploring and testing the use of other hydrogen applications, such as fuel-cell electric trucks and fuel-cell power generation stations providing electricity to Amazon buildings.”
The green hydrogen supply deal is a continuation of joint efforts between Amazon and Plug to expand the applications of green hydrogen beyond material handling.
Plug is targeting 70 tonnes per day of green hydrogen production by the end of this year and says it is ‘on track’ to produce 500 tonnes per day in North America within three years.
With plans to build and operate a green hydrogen highway across North America and Europe, Plug is building a Gigafactory to produce electrolysers and fuel cells and multiple green hydrogen production plants that will yield 500 tonnes of liquid green hydrogen daily by 2025.
Plug has granted Amazon a warrant to acquire up to 16m shares of Plug’s common stock (Warrant Shares), of which the exercise price for the first 9m Warrant Shares is $22.9841 per share, which is based on the volume weighted average closing price of Plug common stock for the 30 trading days ending August 23.
Amazon would vest the warrant in full if it spends $2.1bn over the seven-year term of the warrant across Plug products, including, but not limited to, electrolysers, fuel cell solutions, and green hydrogen.
As of December 2021, Amazon had enabled more than 3.5GW of renewable energy in Europe through 80 projects, and its project tally is mounting globally across 18 countries.
Last year its first operational solar project in South Africa started to supply clean, renewable energy to the grid that supplies power to AWS data centres.