BUFFALO, N.Y. -- Over the past few decades, New York state has invested attention and public resources into Plug Power, a company involved in the development and manufacturing of hydrogen fuel cells, a cleaner alternative to conventional batteries.
Empire Center for Public Policy Research Director Ken Girardin said as the company has waited for its product to go mainstream it has needed help to remain liquid.
"This is a common problem in the energy storage space where you have speculation on specific technologies and maybe it goes big like Lithium ion batteries did and maybe it doesn't go big," Girardin said.
The company is headquartered and has a factory in the Capital Region and plans to build in Western New York. SUNY Buffalo economist Fred Floss acknowledged it's in a sector where many fail.
"While we're willing to take this risk, you may very well lose. It doesn't mean you shouldn't do it. It just means, this is a very risky project. If we want to be the leader in this industry, we're going to have to take some of these risks," Floss said.
The company offered some good news to shareholders last week, announcing it had begun producing liquid hydrogen for fuel and power at its plant in Georgia and potentially at least a short-term solution to its cash flow problems as it's finalizing a term sheet for a $1.6 billion loan with the U.S. Department of Energy.
"A lot of federal and state officials and energy departments have been pushing for this so I think that the momentum is to be successful," Floss said.
He said if for some reason the loan falls through, New York should assess if the reason was political or another underlying issue, before considering other financing options. Girardin said the state investments have so far failed to produce the spin-off economic development promised.
"The worst case scenario for taxpayers is that things don't work out at Plug Power but the state, because of all the money that's already been sunk in keeps putting more public money into it," he said.
Floss said the state and federal governments do need to make sure it invests in bringing infrastructure to scale in order to make the new technology profitable.