Battery-electric and hydrogen-powered truck maker Nikola Corp. said Wednesday it plans to invest $50 million in cash and stock in a hydrogen energy project in the Midwest.
The project involves a gasification plant in West Terre Haute, Ind., acquired in 2016 by Wabash Valley Resources, which intends to convert it into a hydrogen production plant and carbon capture project. In exchange for its investment, Nikola will take a 20 percent equity interest.
The project will use solid waste byproducts — such as petroleum coke combined with biomass — to produce hydrogen. The hydrogen will be used for transportation fuel and baseload electricity generation, according to Nikola and Wabash Valley Resources.
"The expected efficiency of WVR's clean hydrogen production should allow Nikola's bundled truck lease, including fuel, service, and maintenance, to compete favorably with diesel," said Pablo Koziner, Nikola president of energy and commercial, in a statement.
Nikola says the hydrogen hub will allow it to off-take about 50 tons per day to supply future dispensing stations within 300 miles. Nikola indicated it may need to invest more to build liquefaction, storage and transportation services in Indiana and across the Midwest.
Recent strings of power outages are a reminder that the energy market "has a pressing need for a non-intermittent source of clean energy," Wabash Valley Chairman Simon Greenshields said in a statement.
Nikola and Wabash Valley estimate the facility, once complete, will produce up to 335 tons of hydrogen per day, or about 285 megawatts of electricity.
The hub could require 125 full-time employees and 750 construction jobs. Groundbreaking on the project is set for early 2022.
Nikola shares rose 4.3 percent Wednesday, closing at $18.06. The company has generated considerable interest on Wall Street over the past year and traded as high as $65 at one point. But the shares began tumbling amid negative publicity and after General Motors in November dropped plans to build Nikola's electric pickup.