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Andrew Forrest’s Fortescue has signed a one gigawatt supply deal with the maker of the world’s “most powerful” green hydrogen electrolyser systems after investing more than $100 million in the latest fund raising by US-based start-up Electric Hydrogen (EH2).
Fortescue was joined by a long list of global industrial heavyweights, including bp, Microsoft, Amazon, Equinor, Mitsubishi, Rio Tinto, Temasek, and the Oman Investment Authority in a new $US380 million ($A600 million) fund raising for EH2, the company’s third fund raising in little more than a year.
EH2 is led by a group of former senior executives from Tesla, First Solar and Breakthrough Ventures, and it has developed a 100MW electyrolyser system, using PEM technology, that it says is not just the most powerful in the world – most modules are sized at 5W to 10MW – but also the lowest cost.
The fund raising is being used to accelerate the company’s manufacturing and deployment plans to meet strong customer demand for its power-dense green hydrogen systems.
Those customers include Fortescue, which said on Thursday it has taken the “lead” investor role in the latest fund raising and signed a separate “framework procurement agreement” for one gigawatt of EH2’s electrolyser systems to be supplied to Fortescue’s green hydrogen projects in the US and globally.
“EH2’s 100MW electrolyser systems produce green hydrogen from renewable electricity and water at large scale. Each EH2 electrolyser system can make nearly 50 tonnes of green hydrogen per day at transformational low cost,” the companies said in a statement.
Right now there are not enough electrolysers in the world to support the amount of green hydrogen we are set to produce,” added Fortescue Energy CEO Mark Hutchinson.
“That is why we are partnering with other world leaders in this space to secure our green energy supply chain, and we’re excited to invest and secure capacity with Electric Hydrogen to help us achieve our goals.”
EH2 Chief Executive Officer and Co-founder, Raffi Garabedian, a former senior executive at First Solar, said the two companies share a common ambition to achieve large scale, low cost production of green hydrogen for use by fertiliser producers, steelmakers, chemical companies and others.
“We’re here to replace natural gas and coal with renewable green hydrogen,” he said.
“There has not been a viable solution to this problem because renewable green hydrogen has been too expensive to produce at scale. The Electric Hydrogen team is changing that and the opportunities for decarbonization go far beyond today’s applications”.
It turns out that Fortescue’s investment in EH2 was completed in June 2023. Other parties to the fund raising include Fifth Wall and Energy Impact Partners, the United Airlines Sustainable Flight Fund, New Legacy, Kajima Ventures and Fatima Holdings.
EH2, who has raised more than $US600 million ($A950 million) since being founded in 2020, is currently installing manufacturing equipment in a 1.2 GW factory in Devens, Massachusetts, which will begin producing commercial electrolyser systems in early 2024.
The first deliveries will occur later that year and will be installed for New Fortess Energy in Texas. The company says it has customer orders of more than 5 GW.
Fortescue has been building its own 2 GW electrolyser manufacturing facility in Queensland, but it is not yet clear which technology will be used to build systems there.
A previous agreement with US-based Plug Power was dissolved earlier this year, and Fortescue has said it is looking at building its own electrolyser technologies, but this has yet to be confirmed. The Queensland facility is due to begin production soon.
By: Giles Parkinson
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