NextEra's Fertilizer Facility Moves Ahead; Second Plant Drops Out

The NextEra hydrogen-based fertilizer production plant is set to advance in Stutsman County, North Dakota, following the withdrawal of a second fertilizer project. This decision allows NextEra to benefit from the full $125 million state forgivable loan originally allocated to both projects.

Approved by the North Dakota Industrial Commission in January, the loan comprises $50 million for NextEra Energy Resources Development's plant near Spiritwood and $75 million for Prairie Horizon Energy's plant near Dickinson. However, Prairie Horizon, a collaboration between Marathon Petroleum and TC Energy, has opted out of its project, resulting in NextEra receiving the entire loan. The Clean Sustainable Energy Authority, part of the Industrial Commission, confirmed this development on Monday.

Headquartered in Florida, NextEra has a track record of developing wind energy projects in North Dakota. The company intends to harness wind energy for its fertilizer plant, positioning it as a zero-carbon fertilizer producer. With an estimated cost of $1.3 billion, the plant aims to establish a reliable, local source of nitrogen fertilizer, promoting cost stability and supply security within North Dakota. This initiative could attract further investment in fertilizer production, positioning the state as a leader not only in clean energy agriculture but also on a global scale.

The need for additional fertilizer production in North Dakota is underscored by its reliance on imported chemical fertilizers to enhance crop yields, particularly for corn and wheat. Fluctuating fertilizer prices due to global conflicts have made it challenging for farmers to plan effectively. NextEra's proposed timeline indicates construction commencement in 2025, completion in 2028, and operational readiness by 2028 or 2029. The loan forgiveness is contingent upon the project's operational status.

NextEra stands out in its ability to self-fund the development and construction phases, eliminating the need for external financing. The project is expected to create hundreds of jobs across multiple phases, starting with ammonia production and later expanding to include other nitrogen-based fertilizers such as urea.

The fertilizer loan was authorized under House Bill 1546 during the November 2023 special session, mandating hydrogen production through water electrolysis for fertilizer manufacturing. Independent reviewers evaluated both projects during the application process, with scores categorized as "good," "fair," or "questionable." While both reviews for the NextEra plant fell into the "questionable" category, one review of Prairie Horizon received a "good" rating, while the other was deemed "questionable."

The Industrial Commission aligned with these recommendations during a meeting on January 24. Subsequently, the companies had 30 days to accept funding through the Bank of North Dakota or forfeit their share to the other project. Prairie Horizon, in a letter to the Bank of North Dakota and the Industrial Commission, cited inability to meet the loan's technology requirements and advocated for future incentive programs to be technology-neutral.