The US Department of Energy is set to invest $7bn in seven regional hubs for green hydrogen development, to unlock total investment of $50bn. This has also given a major boost to serial winners including Air Liquide, GTI Energy and Plug Power.
The US took a major step to unlock investment in its green hydrogen industry this month by announcing the locations of seven regional hydrogen production hubs.
On the second spookiest day of October – Friday 13th – the Department of Energy (DoE) revealed the winners of its regional hydrogen hubs plan. The DoE is making $7bn of investment available, and is seeking to use those funds to leverage a total $50bn investment from the private and public sectors. Federal backing for the hubs has been enabled by the Bipartisan Infrastructure Law, which passed in 2021.
The DoE has said these hubs would collectively produce one million metric tonnes of green hydrogen annually, and they are due to come online by 2035. If successful, this would represent around one third of the US’s 2030 goal for production of green and low-carbon hydrogen; and would reduce carbon dioxide emissions in the US by 25million metric tonnes.
Jennifer Granholm, US Secretary of Energy, said that kickstarting green hydrogen production in the US was crucial to achieving President Biden’s climate agenda.
She said: “With this historic investment, the Biden-Harris Administration is laying the foundation for a new, American-led industry that will propel the global clean energy transition while creating high quality jobs and delivering healthier communities.”
The DoE picked the seven winners from around 80 competing projects. It considered criteria including financial viability, development timeline, technical merits, community benefits and project partners. This federal support is also a significant boost to firms in more than one winning project, including Air Liquide, GTI Energy and Plug Power.
A detailed look at the seven projects also reveals the different regional priorities and potential uses of green hydrogen in the US economy.
The seven winners are:
Appalachian Hydrogen Hub in Pennsylvania, Ohio and West Virginia. The project is led by Ohio-based technology firm Battelle and the ARCH2 consortium, which is made up of companies including Air Liquide, Dominion Energy, GTI Energy, Plug Power and TC Energy. The partners want the project to be replicable, so it helps to reduce green hydrogen technology costs. The DoE committed $925m.
California Hydrogen Hub, which has been developed by public-private consortium Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES). ARCHES has around 400 members, including Air Liquide, Amazon, AES, Bloom Energy, Chevron, Clearway Energy, Microsoft, Plus Power and Sierra Energy. The partners said their project was particularly focused on applications of green hydrogen to help cut carbon emissions in the transport, trucking and port sectors. The DoE committed $1.2bn.
Gulf Coast Hydrogen Hub in Texas, which has been developed by the HyVelocity public-private consortium that includes partners such as AES, Air Liquide, Chevron, ExxonMobil, GTI Energy, Mitsubishi Power, Ørsted and Sempra Infrastructure. This hub is set to include salt cavern hydrogen storage and an open hydrogen pipeline; and link to the huge green power production in Texas. The DoE committed $1.2bn.
Heartland Hydrogen Hub in Minnesota, North Dakota and South Dakota. This hub has been developed by firms including Xcel Energy and TC Energy, as well as the University of North Dakota’s Energy & Environmental Research Center. Its focus is on using green hydrogen to decarbonise fertiliser production for the farming sector; for electricity production; and to support tribal groups. The DoE committed $925m.
Mid-Atlantic Hydrogen Hub in Delaware, New Jersey and Pennsylvania, which is set to produce green hydrogen from renewable sources and low-carbon hydrogen from nuclear. This hub has been developed by partners in the Mid-Atlantic Clean Hydrogen Hub (MACH2) consortium, which includes Air Liquide, Bloom Energy, Enbridge, Holtec and Public Service Enterprise Group. The DoE committed $750m.
Midwest Hydrogen Hub in Illinois, Indiana and Michigan, which has been developed by the Midwest Alliance for Clean Hydrogen (MachH2). The MachH2 group includes Air Liquide, Ameren, BP, Exelon, ExxonMobil, GTI Energy, Holtec, Invenergy, Plug Power and Scout Clean Energy. This hub is set to produce green hydrogen to help decarbonise industrial production of steel and glass production, as well as transport, power generation and oil refining. The DoE committed $1bn.
Pacific Northwest Hydrogen Hub in Montana, Oregon and Washington, This hub is set to focus on producing green hydrogen for the heavy transport industry, including aviation, as well as for fertiliser production and industrial uses. It is being developed by the Pacific Northwest Hydrogen Association, which includes Air Liquide, Amazon, Fortescue Future Industries, Mitsubishi Power, Portland General Electric and Puget Sound Energy. The DoE committed $1bn.
There is strong overlap between some of these proposals, particularly with how the developers are focusing on producing hydrogen for the transport, heavy industry and fertiliser industries. This is good as it shows that the industry is pulling in roughly the same direction, even while different areas may have subtly different priorities.
This also gives a good indication of the companies taking an early lead in US green hydrogen production, with three companies appearing in three bids each (Air Liquide, GTI Energy and Plug Power). This is to be expected given that there is small pool of companies producing green hydrogen electrolysers in the US, but the federal backing and project pipelines should give them extra momentum to invest and reduce costs.
But this is only one step – albeit an important one – in what promises to be a lengthy process. These consortia now need to navigate complex regulatory hurdles to reach financial close for their hubs and achieve production by 2035 at the latest.
Separately, the US federal government last month issued a request for proposals for projects to boost demand for green and low-carbon hydrogen. This is important as it will create demand for the fuels created by these hubs, and give investors confidence to invest in projects on the supply side. That interplay is vital as the sector evolves.
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