OCED Observatory Newsletter, Issue 2: Hydrogen Hubs Pick Up Steam Abroad
This has been a period of relative quiet for hydrogen hubs in the United States—except of course for the passage of the Inflation Reduction Act, which includes a tax credit for hydrogen production—but the international scene has been much more active.
Contents
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From the Staff
The period since our first Hydrogen Hubs newsletter has been a period of relative quiet in the United States, except of course for the passage of the Inflation Reduction Act, which includes a tax credit for hydrogen production, among many other things. The Northeast cluster added two more states (Rhode Island and Maine) and a number of new private sector partners. Pennsylvania and Missouri also made announcements.
The international scene has been much more active, an observation that ought to prompt movement at home. Germany is accelerating efforts to replace energy from Russia, while the Netherlands announced plans for a national hydrogen network. The United Kingdom is now committed to a national hydrogen strategy, targeting 5GW of low carbon hydrogen operation by 2030 and took numerous policy actions toward that goal. African countries like Namibia with high renewables potential are perceived as important future sources of products like green ammonia as well.
IRA
▪ The Inflation Reduction Act (IRA) signed. Section 13204 offers tax credits for hydrogen production via either an investment tax credit (up to 30 percent) or production credit (up to $3/kg). Maximum credits require lifecycle CO2 emissions of >0.46 kg CO2/kg H2) (in the new The Act section 45V to the U.S. Internal Revenue Code of 1986). Higher emissions reduce the level of credits available. Also offers tax credits for carbon capture. Both are significantly dependent on projects meeting prevailing wage and apprentice participation levels.
DOE
▪ DOE is seeking applications for “Nuclear Coupled Hydrogen Production and Use.” This amendment to a funding opportunity supports thermal integration for nuclear plants, necessary for high-temperature hydrogen production or hydrogen-coupled end uses for nuclear energy. This program is focused on early stage activities.
Staffing
▪ David Crane is now director of OCED. Crane has extensive experience in the energy industry.
▪ Alexandra Klass is now deputy general counsel for energy efficiency and clean energy demonstrations.
▪ Jeremiah Baumann is now chief of staff, Office of the Under Secretary for Infrastructure
▪ Dr. Vanessa Z. Chan is now chief commercialization officer and director of the Office of Technology Transitions.
▪ John Podesta has been named senior advisor to President Biden for clean energy innovation and implementation.
▪ Betony Jones, previously senior advisor on workforce in the department’s Office of Energy Efficiency and Renewable Energy, is director of the Office of Energy Jobs.
Hubs
▪ NY-led coalition adds Rhode Island and Maine. Now includes 6 states, 14 private sector industry leaders, 12 utilities, 20 hydrogen technology OEMs, ten universities, seven non-profits, two transportation companies, and three state agencies. No partridge or pear tree (yet).
▪ Washington. Anticipates participation in a Northwest hydrogen hub from Hawaii and Alaska. Focused on green H2.
▪ California. HyDeal LA plans multi-sectoral green hydrogen off-takers including power generation, oil refining, hydrogen fueling stations for on road transport, alternative fuel for maritime goods movement, aviation, and ultimately for international export of green hydrogen and/or green ammonia from the ports of Los Angeles and Long Beach. This seems to be the public/NGO perspective on SoCal Gas’s Angel Link project.
▪ Missouri. Missouri S&T is partnering with industry, business groups and academic institutions to form the Greater St. Louis and Illinois Regional Clean Hydrogen Hub Industrial Cluster, to support decarbonization. Initial members include: Ameren, Burns McDonnell, MPLX LP (and its sponsor, Marathon Petroleum Corp.), Marquis Industrial Complex, Alton Steel, The Urban League of Metropolitan St. Louis, Inc., Walmart, Mitsubishi Power, Plug Power, Spire, Washington University in St. Louis, Missouri University of Science and Technology, Greater St. Louis, Inc. and the Leadership Council of Southwestern Illinois.
▪ Pennsylvania. New members for what is now called the Appalachian Energy Future: Williams and Southwestern Energy join United States Steel Corp., Shell, EQT Corp., General Electric, Equinor, Mitsubishi Power, Marathon, and MPLX.
States
▪ Massachusetts passes wide ranging clean energy act. Not hydrogen specific.
▪ The Wyoming Energy Authority issues a 5 year hydrogen roadmap to guide development.
Funding and Economics
▪ Pitchbook notes $1.64B invested in hydrogen sector globally.
▪ Marsh insurance brokers announced a new $300m insurance facility targeted specifically at H2 producers, aiming to address insurance challenges e.g. business interruption insurance for producers using renewable energy.
▪ The price of green hydrogen tripled in July, reaching $16.80/kg. This largely reflects the sudden rise in energy input prices—especially renewable energy. Prices of blue H2 also jumped as natural gas price rose sharply.
▪ The Greater New Orleans Development Foundation will receive $50 million from the American Rescue Plan for its H2theFuture green hydrogen project.
International
▪ Belgium. Plug Power announces plans to build a 100 MW green hydrogen plant in the Belgian port of Antwerp-Bruges, coming online by 2025, and producing 12,500 tons of green hydrogen annually.
▪ Canada. Canada and Germany sign an agreement to build a transatlantic supply chain for green H2 and its derivatives, with first shipments of clean ammonia to Germany foreseen “as early as 2025.”
▪ Canada. Quantum Corp completes engineering designs for a network of 40 H2 refueling stations linking British Columbia to Quebec.
▪ China. Shanghai has announces a range of hydrogen-related policies that include the creation of a national hydrogen trading platform, and the construction of a “leading hydrogen energy port,” a regional H2 pipeline network, and a physical hydrogen trading hub.
▪ Egypt. Afnar partners with Egypt government on $4 billion plans producing 100,000 tons of hydrogen and 500,000 tons of green ammonia annually.
▪ Germany. European Commission approves Berlin’s H2Global initiative, which provides $1bn in state aid to support green hydrogen projects around the world, aimed at the German market. Germany has already signed partnerships with Canada, Chile, Japan, Morocco, Saudi Arabia, the United Arab Emirates to co-operate on green hydrogen.
▪ Germany. Germany energy company HH2E will invest €1 billion in a green hydrogen production plant in Germany, will include an electrolyzer powered by offshore wind in the Baltic Sea.
▪ Germany. Hamburg’s red-green senate has approved €223M for the expansion of green hydrogen as a substitute for fossil fuels. An additional €520M will come from the German federal government.
▪ Germany. Bavaria and Baden-Württemberg have agreed a €1bn investment in hydrogen related R&D and a trans-regional filling station network.
▪ India. ACME Group partners with Karnataka state in India to invest $6.7 billion in a green hydrogen and ammonia plant, planned to be online by 2027.
▪ Namibia and Germany sign agreement to produce ammonia for Germany using renewables. Agreement is approximately the current size of Namibia’s GNP.
▪ Netherlands. Hydrogen company HyCC launches H2era to construct a 500 MW green hydrogen plant in the Amsterdam port area, in conjunction with the port authorities. Operations are expected to start in 2027.
▪ Netherlands. The Dutch government announces a €750m plan to repurpose gas pipelines and related assets into the first national hydrogen network by 2031.
▪ Netherlands. The Rotterdam Port Authority is working with various partners towards the introduction of a large-scale hydrogen network across the port complex, making Rotterdam an international hub for hydrogen production, import, application and transport to other countries in Northwest Europe.
▪ UK. BP announces a 60MWe green hydrogen plant in Teeside, UK. This adds to the existing plans for a major blue hydrogen plan (H2Teeside).
▪ UK. The UK government launches a national clean-hydrogen subsidy scheme, which will use contracts-for-difference (CfD) to help fund an initial 1GW of green H2 and 1GW of blue H2 projects. It aims to reach 10GW of low-carbon hydrogen by 2030.
End Users
▪ Amazon announces a deal with Plug Power to begin purchasing enough green hydrogen each year beginning in 2025 to fuel 30,000 forklifts or 800 heavy-duty trucks (10,950 MT per year)
▪ Microsoft successfully tested 3MW fuel cells for use as backup power at data centers.
▪ JERA and Mitsubishi Heavy Industries will develop a 60 MW demonstration power plant that will burn 100 percent green ammonia in Singapore. Mitsubishi has been working on ammonia combustion technology since 2021, with plans to bring a 40 MW ammonia-ready turbine to market by 2025.
▪ Germany launches first operational H2-powered trains, using Cummins fuel cells.
▪ The US Federal Transit Administration announces $1.66 billion in grants to transit agencies, territories and states for buses and bus facilities (funding from BIL). About two-thirds of the bus funding is aimed at zero-emission vehicles, including fuel-cell hydrogen powered.
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