Amazon-backed startup to open major cleantech factory in Devens

Boston Business Journal, by Greg Ryan

Natick-based Electric Hydrogen plans to build what it's calling the world’s largest electrolyzer factory in Devens, a big step in its quest to decarbonize the production of hydrogen for industrial tasks like making steel and fertilizer.

Since it launched two years ago, Electric Hydrogen — also known as EH2 — has announced $222 million in fundraising from big names like Amazon.com Inc.’s (Nasdaq: AMZN) Climate Pledge Fund, the Bill Gates-founded Breakthrough Energy Ventures, Honeywell International Inc. and Rio Tinto.

EH2 is taking aim at one of the toughest obstacles to a “net zero” economy: those industries that cannot decarbonize simply by electrifying. Nearly a third of global emissions come from these “harder-to-abate” sectors, according to a Deloitte report. EH2 is working on electrolyzer technology that can produce "green hydrogen" — hydrogen without fossil fuels — on a scale large and economical enough to work for heavy industrial users like ammonia plants.

So far, the company has been making prototypes in Natick manually, but by year's end it plans to open its first-ever factory in Devens. EH2 is leasing a newly built 187,000-square-foot facility, located at 33 Jackson Road, from Boston-based real estate developer King Street Properties. Fit-out work is to begin this summer.

The company plans to hire at least 70 new full-time employees in Devens and to move 15 existing workers there. It has about 90 employees in Natick, and roughly 200 overall.

$1.9M in tax breaks

EH2’s decision to build the factory in Devens came after a months-long pursuit by state economic development officials, a project that went by the codename Project Galahad, according to emails obtained through a public records request.

The emails show that EH2 considered locating the facility in Wilmington before landing on Devens. (A December email from a Massachusetts Office of Business Development regional director said site selection officials were performing due diligence on 175 Lowell St. in Wilmington for Project Galahad.) According to a February email from the same official, an EH2 consultant said the company was looking outside Massachusetts as well.

MassDevelopment and the Massachusetts Economic Assistance Coordinating Council, the panel that oversees many of the state’s corporate tax breaks, have approved the company for a property-tax break valued at $1.9 million over five years. Federal funding for clean energy has helped spur customer demand for electrolyzers, according to the company.

Santiago Rojas-Carbonell, EH2’s manager of technical projects, said in an interview that EH2 chose Devens in part because of its proximity to the Natick headquarters, so its engineers can be close to the technology as it is produced on a mass scale for the first time. The Devens facility will manufacture so-called stacks, the core of EH2’s system, which splits off hydrogen molecules from oxygen in water.

Rojas-Carbonell also cited the local labor pool as a key benefit, pointing specifically to Lowell. The factory will employ assemblers, technicians and engineers. While some roles will require graduate degrees, others can be filled by those with a technical school background. EH2 is looking to strike job-training partnerships with local schools and organizations like the University of Massachusetts Lowell and Middlesex Community College.

Executives were also impressed by the responsiveness of local utility officials in making sure their energy needs would be met. An EH2 spokesperson declined to comment on the company's electricity requirement in Devens. But a December email from a state official about Project Galahad put the minimum at 14 megawatts, for a preference for 25 megawatts within a few years.

More factories planned

EH2 expects to build more U.S. factories over the next few years: It wants to boost its manufacturing capacity tenfold by 2030. Asked if Massachusetts is a possible locale for future factories, Rojas-Carbonell said incentives would be a “very important factor.” EH2’s two main bases of operation are the Boston area and California.

“Incentives were an important factor for Devens, but speed-to-market was more important,” Rojas-Carbonell said. “For additional expansion, that’s something we clearly as a company will have to visit, and the decisions will be made based on that.”

In a statement, Massachusetts Clean Energy Center CEO Jennifer Daloisio called Massachusetts “the perfect home for companies like Electric Hydrogen,” adding that it has the “potential to revolutionize this field and play an important role in addressing our hardest-to-electrify sectors.”

The Devens plant will have the capacity to manufacture the equivalent of a dozen 100-megawatt electrolyzer systems each year, according to the company. The decision marks a notable new lease for King Street, which is building out a 45-acre campus in Devens geared towards biomanufacturing. King Street principal Stephen Lynch told the Business Journal that its real estate platform “has also proven to be an exceptional resource for the growing clean energy sector.”