RE+ Tech Supp to POWER September 2023 - 24

EMPOWERING CLEAN ENERGY
HYDROGEN
U.S. DOE Releases Report for Clean
Hydrogen Strategy and Roadmap
T
he U.S. recently took another
important step in implementing
a comprehensive strategy to
advance the production, processing,
delivery, storage, and use of clean hydrogen.
The
Biden-Harris administration
on June 5 released the U.S. National
Clean Hydrogen Strategy and Roadmap
(Hydrogen Roadmap), which serves as
a summary of the current state of U.S.
hydrogen production, transport, storage,
and use. It also is forward-looking,
providing predictions for how clean
hydrogen will contribute to national
decarbonization goals and estimates
of future demand scenarios for clean
hydrogen.
Here is an overview of the key components
of the roadmap, focusing on:
* The need and opportunities for
clean hydrogen.
* Challenges to achieving the benefits
of clean hydrogen.
* Strategies for helping to overcome
these challenges.
Need and Opportunities for
Clean Hydrogen
The Hydrogen Roadmap reaffirms
unequivocally that hydrogen is a key tool
available to support the U.S. transition
to a net-zero economy (one in which
carbon emissions associated with combustion
of fossil fuels are essentially
eliminated or captured and stored). As
indicated in the document, hydrogen
offers the promise of leveraging regional
resources and creating equitable and
sustainable growth in ways that displace
sources of energy that generate
greater carbon emissions.
As a versatile energy carrier and
chemical feedstock, hydrogen offers
advantages that can improve the performance
of other low-carbon energy
resources, including renewables, nuclear,
and fossil fuels with associated
carbon capture and storage (CCS).
Hydrogen is, therefore, an " enabling "
technology, supporting the economics
and reliability of renewable sources of
electric generation through long-duration
energy storage and offering flexibility
and multiple revenue streams to
incentivize the development of clean
power generation, such as advanced
nuclear technology.
Having outlined the need for clean
hydrogen to help the U.S. achieve its
decarbonization goals, the Hydrogen
Roadmap then discusses opportunities
in the clean hydrogen space. These
market opportunities are numerous
because clean hydrogen can be produced
from diverse domestic resources
and used across sectors while being
able to complement today's conventional
grid and natural gas infrastructure.
However, making hydrogen at
large scale on a cost-competitive basis
remains challenging. To help support
initial project development efforts, the
Bipartisan Infrastructure Law (BIL),
and the Inflation Reduction Act (IRA),
provide a variety of tax incentive and
grant and loan guarantee programs to
support hydrogen-based projects.
Regional Clean Hydrogen Hubs.
Regional Clean Hydrogen Hubs are
networks that feature clean hydrogen
producers, clean hydrogen consumers,
and connective infrastructure located
in close proximity to each other. The
BIL provides $8 billion to the Department
of Energy (DOE) to support the
development of four to eight largescale
regional hubs. DOE is currently
reviewing applications for this program
and intends to select recipients to begin
initial development efforts in the
coming year.
Tax Credits. The IRA provides several
tax credits intended to support the
development of both supply and demand
for clean hydrogen. Tax credits
cover the whole hydrogen ecosystem,
from a clean hydrogen production tax
credit (PTC), which provides a credit of
up to $3 per kilogram of clean hydrogen
24 Supplement to POWER & RE+ 2023
produced, to an investment tax credit
(ITC) for hydrogen storage equipment
of up to 40% of qualifying costs if
certain stringent domestic content
requirements are met and even up to
50% if the domestic content requirements
are satisfied and the hydrogen
storage project is located within an
" energy community, " and tax credits for
hydrogen fuel cell vehicles and their refueling
stations.
Combined with state-level incentives
such as a low carbon fuel standard
(LCFS), the clean hydrogen PTC can
make hydrogen more cost-competitive
than would be possible without the subsidies,
in some cases accelerating the
breakeven point by more than a decade.
DOE Funding. The BIL and IRA also
provide for tens of billions of dollars
in additional DOE funding support for
clean and renewable energy projects.
This includes loan guarantee funding
to support the development of hydrogen
projects, including infrastructure-based
projects repurposing oil
and gas pipelines to use to transport
hydrogen. There are also DOE funding
opportunities to support the development
of key parts of the supply chain
for hydrogen projects, including eletrolyzers
and other essential equipment.
Challenges to Achieving the
Benefits of Clean Hydrogen
Although clean hydrogen technology
is improving and costs of producing
clean hydrogen have decreased in recent
years, there remain financial and
technological challenges that stand
in the way of continued growth of the
domestic clean hydrogen economy.
The Hydrogen Roadmap specifically
notes that in addition to cost considerations,
a " lack of ubiquitous hydrogen
distribution infrastructure, " and
a lack of manufacturing at scale, are
two important challenges.
As explained by DOE, " Hydrogen
transportation-such as pipelines,
tube trailers, liquefaction, siting, per
RE+ Tech Supp to POWER September 2023

Table of Contents for the Digital Edition of RE+ Tech Supp to POWER September 2023
