Dive Brief:
- The U.S. Department of Energy announced on Wednesday that it has finalized award commitments totaling $1.2 billion for the Gulf Coast Hydrogen Hub and $1 billion for the Midwest Hydrogen Hub. Earlier this year, funding for three other hubs – in the Appalachian region, California, and the Pacific Northwest – was also approved.
- Currently, two other hubs are still awaiting final funding approval.
- These new hub approvals will facilitate hydrogen projects that have been waiting on necessary infrastructure and agreements, according to Frank Wolak, president and CEO of the Fuel Cell and Hydrogen Energy Association. However, he and other industry experts note that the incomplete guidance on the 45V hydrogen tax credit will play a critical role in determining how effectively these hubs can operate.
Dive Insight:
After thirteen months of anticipation, the Gulf Coast Hydrogen Hub is ready to kick off its plans, having received its approval and an initial funding of $22 million. Ted Barnes, senior director of GTI Energy’s Hydrogen Technology Center, revealed this exciting news on Wednesday.
GTI Energy acts as an organizing partner for the Gulf Coast Hydrogen Hub, which aims to become the largest hydrogen hub in the country with its $1.2 billion grant, matching the largest sum awarded to California. While final details are still in the works, Barnes explained that the Gulf Coast initiative envisions an interconnected network of hydrogen production sites, linked through pipelines to various end users, such as refueling stations for fuel cell vehicles and industrial producers of ammonia and petrochemicals. Their operations will include both electrolytic hydrogen produced with renewable energy and hydrogen generated from natural gas.
“We have partners and a comprehensive project plan ready to implement over the existing Gulf Coast network,” Barnes stated. “Texas already hosts the largest hydrogen production and distribution network in the United States, and we’re excited to build on that with our clean energy initiative.”
However, the ground reality means it will still take some time before construction begins. The Gulf Coast hub plans to spend the next 18 months on planning, with engineering and design expected to take an additional three to four years before they can move to actual construction.
Most of the other hydrogen hubs have also received funding approval from the Department of Energy. California’s hub focuses on using renewable energy and biofuels to help reduce emissions in public transportation, heavy trucking, and port operations. The Appalachian hub, with a budget of $925 million, aims to explore carbon capture applications in hydrogen production across West Virginia, Ohio, and Pennsylvania. Meanwhile, the Pacific Northwest and Midwest hubs, each funded with $1 billion, are set to work on reducing electrolyzer costs and industrial decarbonization efforts, respectively.
The Heartland hub, which covers Minnesota, North Dakota, and South Dakota, and the Mid-Atlantic hub, which spans Pennsylvania, Delaware, and New Jersey, are the two smallest hubs awaiting final approval. The Heartland hub plans to emphasize fertilizer production and agricultural decarbonization, while the Mid-Atlantic hub is interested in repurposing existing energy infrastructures, including nuclear power facilities, to generate hydrogen.
Progress at these newly approved hubs is expected to give a significant boost to an industry that has faced challenges in project announcements and advancements over the past year, especially following the release of a draft guidance on the hydrogen tax credit. This funding will support projects that have been in a holding pattern, awaiting crucial infrastructure and agreements to move forward.
Nonetheless, the 45V tax credit plays an essential role as well. Should it be finalized in its current form, which prohibits hydrogen production using existing nuclear plants or excess hydropower, it could impose serious constraints on hydrogen projects both within and beyond these hubs.
Barnes concurred, sharing that hub leaders have reached out to Treasury Secretary Janet Yellen, urging her to reevaluate the guidance. “These hubs will undoubtedly propel the growth of the hydrogen industry in the U.S.,” Barnes added. “But the significance of the 45V tax credit cannot be overlooked. Correctly establishing that incentive is crucial for our industry’s advancement.”