This fall, the department plans to announce up to $7 billion for six to 10 regional hubs across the country. The industry so far has seen unprecedented federal incentives to boost supply. Green hydrogen has been three to six times more expensive to produce than gray hydrogen. “Pink” hydrogen splits water using nuclear energy. “Green” hydrogen uses renewable electricity to split water into oxygen and hydrogen molecules without releasing carbon. The government considers clean hydrogen to include several types of production methods-renewable energy, nuclear energy and natural gas using carbon capture and storage. Small amounts of hydrogen historically have been produced by a carbon-emitting “gray” process powered by natural gas. Production could reach 50 million metric tons by 2050. Hydrogen production could increase from almost zero today to 10 million metric tons by 2030, with the potential to add 100,000 net new jobs in that timeframe, according to the department’s National Clean Hydrogen Strategy and Roadmap released last month. Eastern on July 24, will inform how the DOE sets up the program, the notice said. Those customers-heavy-duty trucking, steel, cement, chemicals, and other hard-to-decarbonize industries-would have to make capital-intensive upgrades to their plants or fleet to use hydrogen, he said. The government should serve as a “short-to-medium-term bridge” until enough hydrogen production facilities are operating to form a critical mass of customers, Crane said. “You lose your job when you try and do something that’s unreliable.” “No supply-side procurement professional ever lost their job by buying energy exactly the same way they bought it last year,” said Crane, who once served as president and CEO of power giant NRG Energy. Demand has lagged supply in other countries that have more mature hydrogen industries, such as Germany, the United Kingdom, Australia, and Japan, he said. “We hear there’s a lot of interest among people who want to go zero-carbon in using clean hydrogen, but they’re going to wait to see that it’s there,” Crane said. The program addresses a key challenge in scaling up a hydrogen industry-and other nascent clean energy technologies-as part of the Biden administration’s goal of achieving net-zero greenhouse gas emissions across the US economy by 2050.Įnergy industry buyers are naturally conservative and hesitant to dramatically shake up their procurement strategies amid questions about supply, price, and technology costs, said David Crane, the department’s under secretary of infrastructure, in an interview with Bloomberg Law. Those mechanisms could include pay-for-delivery contracts, off-take backstops, and feasibility funding to support analysis by off-takers, which would be implemented by an independent entity outside the federal government, according to the notice. The notice, shared in advance with Bloomberg Law, seeks answers to seven questions about how to implement the program and about the best mechanisms to strengthen demand for hydrogen. The department plans to issue a notice of intent Wednesday that explores an initiative to make demand-side commitments to hydrogen producers as part of its much-anticipated $8 billion regional hydrogen hub program launched last September. The Energy Department would spend $1 billion to boost demand for clean hydrogen under a new plan to provide initial revenue for the first large-scale producers and provide certainty for potential buyers.
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