Plug Power Inc. (Latham, N.Y.) has introduced the first-ever spot pricing program for liquid green hydrogen, marking a major step forward in the industry.
Hydrogen buyers now have the freedom to purchase liquid green hydrogen from Plug’s production plants on-demand and without the limitations of long-term take-or-pay agreements. The flexibility provided by this new spot market allows customers like retailers, industrial manufacturers, and power plant operators to optimize their hydrogen sources efficiently, reacting swiftly to fluctuating energy demands without being tied down by long-term contracts.
In an early sign of success, Plug has entered into spot pricing agreements with several key industry players. Among these, a spot agreement with one of the largest industrial gas companies underscores widespread industry endorsement. Looking forward, the ripple effects of this innovative pricing model could redefine supply dynamics and cost structures across the entire green hydrogen ecosystem.
“Our pioneering spot pricing program is a testament to Plug’s commitment to customer-centric innovation,” said Andy Marsh, CEO of Plug Power. “By adapting to market demands in real-time, we are not only enhancing the accessibility and affordability of green hydrogen but also accelerating its adoption across various sectors.”
Each Thursday, S&P Global Platts will publish a price for the following week based on Plug’s supply and demand at the current time. Customers must have a spot agreement in place with Plug. If customers want to purchase hydrogen at the published price, Plug will execute a transaction agreement to accept a customer tanker at one of its plants for a fill.
All Plug operating plants in Woodbine, Ga., Charleston, Tenn., and St. Gabriel, La., with a combined liquid hydrogen production capacity of approximately 45 tons per day, participates in the spot pricing program. Plug, the third-largest producer of liquid hydrogen in North America, is the only producer of liquid green hydrogen on a commercial scale.
“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,” added Plug President Sanjay Shrestha.
By spearheading this transformative change, Plug solidifies its leadership in the green hydrogen ecosystem while contributing significantly to the global market for sustainable and renewable energy solutions.
“We believe this initiative will increase trust and transparency in the industrial hydrogen market,” explained Marsh. “In five years, we anticipate most buyers will tap into the spot market to benefit from the flexibility it offers them.”