Biden administration’s $8 Billion stimulates US hydrogen hub expansion

The new federal infrastructure law has allocated $10 billion for the deployment of hydrogen as a cleaner substitute fuel for natural gas and diesel in difficult-to-decarbonize industrial and transportation sectors, including $8 billion to build at least four “hydrogen hubs” in the United States.

The U.S. Energy Dept. is moving swiftly to unveil the program’s “roadmap” this summer and demonstration projects shortly thereafter, as states, utilities, lawmakers, businesses, and others vie for federal funding for ongoing or planned local projects.

Regional hubs are envisioned as a network of producers of clean hydrogen, with customers and infrastructure linking them. The objective is to decarbonize large natural gas-dependent industrial sectors. The Biden administration is promoting clean hydrogen fundamental research, demonstration projects, and “ecosystem” growth, according to Jesse Adams, the DOE manager in charge of the agency’s hydrogen hub initiative.

The budget bill asks for four centers, but “we’re striving for more, like six to ten,” he said, in order to reach the objective of a national hydrogen network. The U.S. Department of Energy (DOE) released H2 Matchmaker, an interactive mapping toolștiin hydrogen users and suppliers.

What Constitutes a Hub?

The Great Plains Institute, a nonpartisan think tank based in Minneapolis, has identified 14 potential sites for hydrogen and carbon management centres in U.S. regions (see map above), although they “are not exhaustive,” according to the organization.

“Hydrogen is a potent decarbonization solution for several sectors and various end uses that are difficult to electrify, including industrial process heat, heavy haulage, iron and steel production, and maritime shipping,” said Dan McFarlane, head of research at the institution.

Each DOE hub will be selected using a variety of factors. At least one must utilize fossil fuels to make hydrogen, which is referred to as “blue hydrogen,” while others use renewable energy and nuclear power to produce “green hydrogen,” which is cleaner. According to the institute, key selection factors also include a concentration of industrial emitters and high fossil fuel use; plants eligible for carbon-capture 45Q tax credits; hydrogen and ammonia production; large geologic formations for hydrogen or CO2 storage; and existing infrastructure for hydrogen blending and “low-impact” hydrogen and CO2 transport.

Each center would get between $500 million and $1 billion, with participants matching the federal investment. DOE is now analyzing 300 replies to its most recent request for information, but has not said when its official request for proposal would be published.

The market is quite enthusiastic about hydrogen, according to a consultant TRC Cos. representative. “The $8 billion has a great deal to do with it, but there are also hydrogen initiatives being created outside of it” She states that TRC is advising applicants for funding, but refused to identify them or provide project information.

Regions Prepare

San Francisco utility company PG&E and the engineering firm GHD are constructing a 130-acre demonstration pipeline that will examine the performance of different quantities of hydrogen combined with natural gas in high-pressure transmission lines. Jamie Randolph, PG&E’s main hydrogen program manager, told ENR that it is a test loop to examine a system that would initially feed the blend to a northern California power plant and then spread to additional end users to increase the hydrogen market in California.

She stated that the hub will eventually connect to additional hubs in Oregon, Arizona, and Southern California. “The hubs are a community of supply chain stakeholders” that will also include hydrogen fueling stations in California, as stated by Randolph. She explained that the initiative will evaluate risk levels and mitigation strategies for moving hydrogen-blended fuel through natural gas pipelines to industrial users. The construction is anticipated to commence in 2023.

Southern California Gas is constructing green hydrogen infrastructure around Los Angeles in order to construct a hub that would displace around 25 percent of the currently delivered natural gas, according to the business.

A committee of the Los Angeles city council approved a bill on May 5 mandating the submission of a hub proposal to DOE. The California Senate is scheduled to hold a hearing on a bill to create a clean hydrogen hub fund and require the governor to designate a state director on May 16.

New York, Connecticut, Massachusetts, and New Jersey also signed a multi-state agreement in an effort to become a clean-hydrogen hub for the Department of Energy. Plug Power Inc., a developer of hydrogen fuel cells based in Latham, New York, is a partner in the New York-led initiative and has hired the CB&I division of McDermott International to design and construct two 500,000-gallon, double-wall hydrogen spheres for its Genesee County factory. Using proton exchange membrane electrolyzers, Plug Power intends to generate 45 metric tons of green hydrogen each day.

Hubs Acquire Support

West Virginia also submitted a hub proposal in March, citing its dense natural gas and pipeline network, with prominent state politicians like Joe Manchin and Shelley Moore Capito.

However, the initiative would be in competition with a public-private proposal from a new northern Appalachian group that would utilize resources from Ohio and Pennsylvania in addition to West Virginia. Additionally, Louisiana, Oklahoma, and Arkansas established the HALO hub coalition, which will reuse depleted oil and gas reservoirs and utilize geological formations for hydrogen storage and carbon capture.

Bakken Energy and Mitsubishi Power will seek funding for a $2 billion hub at a former North Dakota synfuels facility. It would begin operations in early 2027 as one of the largest such facilities in North America, producing 348,000 metric tons of hydrogen annually.

According to the developers, the project seeks to collect 95 percent of its emissions, and a relationship with tribes might help it comply with DOE environmental justice regulations. S&P Global said on May 10 that a Texas organization intends to create a Gulf Coast hydrogen hub with a big international export center in Corpus Christi. Washington, Arizona, Kentucky, Illinois, and Nebraska are among the states individually pursuing centers.

“Blue” hydrogen from fossil fuels is an imperfect climate solution, according to Bridget van Dorsten of the energy research firm Wood Mackenzie, “but in the United States, whose politics are influenced by the world’s largest oil and gas industry, [it] may be the simplest way to achieve carbon reductions.”

Targeting green

Utah, Colorado, New Mexico, and Wyoming are co-developing a hub whose “green” status is contingent on the commencement of work on a Utah project billed as the world’s largest industrial facility to convert more than 220 MW of water and renewable energy daily into 100 metric tons of green hydrogen to be stored in underground caverns.

Developers Mitsubishi and Magnum Development contracted WSP Global Inc. for cavern EPC services and Black & Veatch for facility services. The project’s total cost estimate for 2019 remained unchanged at $1 billion, although it was awarded a conditional $504 million DOE loan in April. Mario Azar, CEO of Black & Veatch, describes the initiative as “a transformative event… in decarbonization at scale.”