$10B green hydrogen production gets positive comments from DoE

A Lake Oswego firm announced that it expects to build a $10 billion green hydrogen production and distribution network in central Oregon and Washington, encouraged by the U.S. Department of Energy’s favorable comments.

The DOE received roughly 80 concepts last month, and Obsidian Renewables’ was one of them. This was the first stage in the company’s quest for a share of the $7 billion in grant money that will support six to ten regional “hydrogen centers.”

One of 33 developers urged to submit a complete application by a deadline of April 7 was Obsidian, the DOE informed the company.

David Brown, senior principal, and co-founder of Obsidian said he thinks the idea is solid enough — and other federal inducements are valuable enough — that the project might be financially feasible even if it loses the grant competition, although it will undoubtedly fight hard to win it.

This supports our theory, said Brown. “We need some diversity in user groups and some variation in production for our hydrogen center to be successful. Receiving this positive ruling from the U.S. DOE will increase our credibility as we try to unite that core group of various businesses.

Obsidian plans to run electrolyzers, which separate hydrogen from water, with inexpensive and clean power from new solar and wind power facilities, together with the region’s hydropower resources when they are in excess.

Brown stated, “We don’t want to redirect the solar and wind energy that is already in the electrical system. We intend to construct additional solar, wind, and energy storage facilities.

Production and investment tax credits are included in the newly passed Inflation Reduction Act to promote such resources. In addition, it offers a sizable tax credit of $3 per kilogram for hydrogen produced with clean energy.

According to Brown, the Obsidian project might gain $3 billion from the tax laws. Obsidian outlined a grant of $700 million in its concept paper.

In November, the Pacific Northwest Hydrogen Association, Oregon’s Department of Energy, and Washington’s Department of Commerce joined forces to submit a concept paper to the US DOE. It did not make its plan public, unlike Obsidian, and project representatives did not react to questions about the progress of their proposal right away.

Brown is dubious about the possibility of more than one Pacific Northwest project receiving funding. Obsidian stated in a footnote to its concept paper that it anticipates the two concepts would be integrated into a single application. Brown expressed on Tuesday that he still believes the two sides can come to an agreement.