Renewable Hydrogen Action Plan for US Pacific Northwest
The plan provides policy and project agenda for green hydrogen production, benefiting both the economy and the environment
The Center for Sustainable Infrastructure (CSI) and the Renewable Hydrogen Alliance have jointly released the Pacific Northwest Renewable Hydrogen Action Plan, which offers a strategic agenda for policy, projects, and research to scale up renewable hydrogen production and use in the region. The project aims to benefit both the economy and the environment.
The initiative received funding from Bonneville Environmental Foundation, Bullitt Foundation, Toyota Motor North America, Leighty Foundation, Oregon Department of Energy, Obsidian Renewables, and SoCalGas.
Designed as a concentrated six-month effort, the plan aims to provide an initial agenda for green hydrogen supporters to accomplish their respective renewable targets.
Hydrogen from low-cost wind and solar has a tremendous potential to scale up the green hydrogen economy. The plan underscores the importance of replacing the fossil fuel source with a low-carbon source of electricity to produce the chemical substance.
The increasing availability of clean, low-cost electricity and rapidly falling cost of electrolyzers, which splits water into hydrogen and oxygen, are making electrolytic fuels (hydrogen and derivative fuels, including ammonia, methane, and methanol) an attractive and competitive option than deriving hydrogen from fossil fuels, says the project report.
“The cost curve we see with electrolyzers is a lot like what we saw with wind and then solar – it’s the economy-of-scale in manufacturing. The idea is that for every doubling in installed electrolyzer capacity, total costs should decline by about 20%. And what we saw in North America and Europe is that the cost of electrolyzers fell 40% between 2014 and 2019,” shared Rebecca Smith, Senior Energy Policy Analyst at Oregon Department of Energy, one of the entities that funded the program.
Renewable hydrogen could be increasingly put to use to provide non-polluting fuel for vehicles, vessels, heavy-duty transportation, aircraft, and other related industries. This makes green hydrogen a crucial contributor in decarbonizing various applications and power-intensive sectors that are hard to decarbonize otherwise.
The report features a two-part call to action to accelerate the Pacific Northwest’s renewable hydrogen sector, which has been presented by seeking inputs and suggestions from some 50 thought leaders and industry experts. The ‘Lead with Projects’ plan urges stakeholders to build infrastructure to store and deliver hydrogen to customers. Through the ‘Create a 10-Year RH2 Roadmap’ segment, the plan gives an overview of hydrogen’s role in the energy portfolio of the future.
The report suggests planning, design, and financing clusters of projects at hydrogen deployment hubs. As part of the integrated action, the plan suggests building deployment hubs at priority locations where multiple renewable hydrogen users can be concentrated, including at transport fueling stations, ports, and around select industrial facilities – including energy utility facilities.
To ensure the renewable origin of green hydrogen, ACCIONA has developed a platform based on blockchain technology. The mechanism will allow customers access to a digital platform to verify and visualize the entire green hydrogen value chain in real-time.
The action plan also suggests creating policy incentives to stimulate hydrogen demand. It urges policymakers to incentivize the development of diverse markets for green hydrogen that reduce carbon intensity, close to production facilities, reduce risk, and increase confidence for project investors.
The latest action plan says that utility and regulatory mechanisms should roll out packages to better reward the real benefits that renewable hydrogen offers to utilities, including resilience, energy storage, system flexibility resources, carbon-free fuels, and more. Tax incentives, appropriate to each state, should also be provided to attract private investment into clean hydrogen equipment and projects, it adds.
To that end, Clay Norris, Power Management Officer, Tacoma Power, said, “Our Council has adopted a first-of-its-kind electrofuels rate (tariff) that offers renewable hydrogen producers a deeply discounted demand charge on our already competitive power rate, but in exchange, they accept a moderate degree of interruptibility.”
The report insists on building a long-term roadmap to understand implementation processes and better prioritize policies, projects, and performance metrics.
The plan suggests growing the sector’s field experience, fuel process improvements, and developing the supply chain and workforce. It further proposes expanding hydrogen production, ensuring that demand generates gravitational pull, attracting more market operators to explore and invest in the sector.
The action plan insists that these projects will also offer a strong value proposition for private, local, and utility investors, as well as for federal and state funders, by demonstrating a clear business case for all project investors and clear consistency with state energy and climate priorities.
In January this year, in a similar funding exercise, the Fuel Cells and Hydrogen 2 Joint Undertaking, a public-private partnership of the European Commission, awarded €5 million (~$6.08 million) in funding to a consortium to explore the feasibility of offshore hydrogen production. The consortium will explore the feasibility and potential of combining an offshore wind turbine directly with an electrolyzer to transport green hydrogen to shore. Last year, Plug Power, a U.S.-based provider of hydrogen engines and fueling solutions enabling e-mobility, had raised around $1 billion in one of the largest bought equity deals in the cleantech sector.
To cut down on carbon emission, the plan also proposes minimizing the immediate need for costly long-distance hydrogen transmission and distribution to improve the early business case for near-term project investments.
The plan further urges stakeholders to collaborate for facilitating clusters projects that combine private, utility, and public dollars to deliver attractive investment returns in value for all participants. Project development partnerships provide the ‘glue’ and the vehicle by which partners can also fund essential project management and administration services, the plan emphasizes.
The report insists on producing renewable hydrogen close to hubs of diverse demand, supplemented by storage and customer delivery infrastructure, connects companies specializing in each of these links in the supply chain in commercial relationships and partnerships. These commercial partners can go on to build experience and success to develop the next scale larger projects, feel experts.
“Given the relatively high costs of transporting renewable hydrogen today, co-locating the supply and demand is an ideal scenario. Whether that’s a single large industrial off-taker or a diverse fleet of vehicles filling up, it overcomes a difficult business case in the early years for hydrogen infrastructure. Successfully producing and delivering the yield to satisfied customers, with appropriate storage and delivery infrastructure – that’s what people need to see in more and more places for the industry to ramp up,” said Evan Ramsey, Senior Director, Bonneville Environmental Foundation, one of the sponsors of the action plan.
The plan also identifies customer segments that are market-ready to embrace the green hydrogen revolution. According to the report, these include heavy-duty transport, cargo/materials handling, select industrial and energy facilities, maritime harbor craft, and passenger vehicles.
The report also elaborates that customer demand also depends on strong confidence, backed by solid data, in hydrogen safety. Strategies are needed to ensure that safety best practices are always integrated into projects, it emphasizes.
The action plan also talks about corporates and cities that form an integral part of the green initiative. Many corporations in the region, including giants like Microsoft, Starbucks, Intel, and Amazon, are making serious commitments to reducing the carbon footprint of their operations and products.
Likewise, many cities in the region are also committed to clean energy. These cities are pursuing innovative strategies to transform their operations and infrastructure to slash climate and other pollution, in ways that benefit the community – economically, environmentally, and socially.
The plan identifies these sections as an important component in the portfolio of solutions of green corporations and clean cities, which can initiate clean hydrogen deployment hubs that engage other private, public, utility, and NGO project development partners.
The plan asks stakeholders to develop a vision for the role of renewable hydrogen in a fully realized zero-carbon energy industry system. It also suggests launching strategic deployment projects for the most commercially viable options. The action plan demands a heightened focus on research, development, and deployment initiatives that can strategically accelerate renewable hydrogen commercialization.
According to research published by Rystad Energy last year, the global pipeline of utility-scale green hydrogen developments – projects with capacities greater than 1 MW – exceeded 60 GW as of October 2020, with 87% of this capacity coming from gigawatt-scale projects.
Srinwanti is a copy editor at Mercom India, where she writes and edits news stories across the clean energy spectrum. Prior to Mercom, she has worked in book publishing at Macmillan Publishing House and Integra and honed her editorial and writing skills in both online and print media such as Reuters, Times Group Books, The Times of India, and Pune Mirror, covering local to international stories. More articles from Srinwanti Das.