Phoenix/ Real Estate & Development
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Published on May 08, 2024
$550M Green Hydrogen Hub Breaks Ground in Buckeye, Arizona, Forecasting Renewable Energy Gains and Job GrowthSource: Buckeye, Arizona

Fortescue Future Industries, an Australian green energy titan, has kicked off a major endeavor in Buckeye, carving out 158 acres for a hydrogen hub projected to cost $550 million, as ABC15 reported. Nestled west of State Route 85, this will be Fortescue's inaugural green hydrogen plant on U.S. soil, boasting an 80-megawatt electrolyzer and liquefaction powerhouse slated to pump out over 11,000 tons of the clean-burning liquid annually.

The construction wave is set to bring 2,000 jobs to the area, while more than 400 permanent gigs will emerge post-construction, including 40 with sweet paychecks at the facility, which sits in a region that burns through over 5 billion gallons of diesel every year, with hydrogen production expected to begin by the middle of 2026, according to details shared by The Business Journal. Fortescue’s top dog, Andrew Forrest, championed the U.S. government's enthusiasm for renewables at a May 2nd groundbreaking shindig, but he pointed out that the road ahead is still long.

Arizona is poised to scale up its clean tech credentials with this project, projected to enrich the state's GDP by $59.2 million and churn out $9.1 million a year in taxes for local and state coffers, as reported by the Arizona Commerce Authority. The same source buzzed about the project solidifying Arizona's position as a trailblazer in sustainability and clean energy.

However, it's not all smooth sailing, Fortescue acquired the Buckeye project site from Nikola Corp last July, and they shelled out $24 million for the Phoenix Hydrogen Hub LLC's assets even though Nikola had picked them up for $16.5 million about a year prior, pointing to a potential expansion in Fortescue's investment strategy in green energy, alongside another $35 million earmarked for a Detroit factory and plans for a 300 megawatt green hydrogen production facility in Centralia, Washington. The hydrogen plant carving in Buckeye could suffer from draft guidelines under the Inflation Reduction Act, Forrest argued to The Business Journal, requiring energy production to match consumption hour-for-hour, which he believes puts a straitjacket on the industry's progress and doesn't align with U.S. climate goals.

Stephanie Genco, the Fortescue spokeswoman, elaborated that the firm couldn't pin down the financial fallout for the Buckeye plant from the 45V tax credit debate, given that these federal guidelines are still in the drafting phase—though the Fortescue North America CEO indicated that compliance with hourly matching could mean ballooning costs by up to 140% at the Buckeye hub, a figure that underscores the tension between green initiatives and practical implementation hurdles.

Phoenix-Real Estate & Development