Green Hydrogen: The Next Step to Source Clean, Abundant Energy

This summer, gas prices became a hot topic of discussion. Across the world, progressive governments, businesses and even individual households are exploring options to reduce reliance on oil and gas with a portfolio of new, sustainable energy sources to tackle energy security and price volatility. Among the portfolio of emerging energy sources is, most notably, green hydrogen – hydrogen created with renewable sources such as wind, solar, or hydroelectricity.

On a recent site selection project in Europe, Newmark professionals visited an industrial park where tenants can be completely powered by green hydrogen. Recent private investments and Federal and State/Provincial government initiatives could now lead to a rapid adoption of green hydrogen as renewable energy source in the U.S. and Canada.

Why Green Hydrogen?

Despite significant focus on the electrification of cars, not all transportation will likely be lithium-ion battery-powered in the near future. Green hydrogen is seen by many experts as a cleaner potential future energy source for long-haul transport, which currently runs on diesel. 

For example, Volvo Trucks recently unveiled a hydrogen fuel-cell truck with a 1,000 kilometers (over 600 miles) range on one charge, with a refueling time under 15 minutes. The hydrogen fuel cell – the equivalent of the battery in an electric vehicle – will be produced through Cellcentric, a joint venture between Volvo Truck and Daimler Truck. In April 2022, Cellcentric announced¹ its first fuel cell manufacturing facility in Bavaria, Germany, creating 450 new jobs. 

We have yet to see a major fuel cell production facility announced in North America, however, green hydrogen production facilities to extract fuel have been announced. In early 2021, ThyssenKrupp and Hydro-Quebec, the state-owned power company of the Canadian province, unveiled² plans for a water electrolysis plant to produce 11,100 tons of green hydrogen annually, starting in late 2023.

A few months later, Plug Power announced³ a $291M green hydrogen production facility in Genesee County on the STAMP Megasite near Buffalo, New York with a capacity of 27,000 tons per year. In April 2022, the Advanced Clean Energy Storage (ACES) Project in Delta, Utah made the news⁴ when it received a $500M loan guarantee from the Department of Energy’s (DOE) federal loan guarantee program. The project will use a former coal plant infrastructure, wind and solar to produce hydrogen – 36,500 tons per year – and two salt dome caverns to store hydrogen near the site. 

Government Support

The World Economic Forum lists China, the European Union, India, Japan, South Korea and the United States as the countries best positioned to become Hydrogen Superpowers. Just like wind and solar a decade ago, Federal and State/Provincial government support will be essential in kickstarting the adoption of this emerging renewable source of energy.

In February 2022, the U.S. Department of Energy (DOE) announced the Bipartisan Infrastructure Law’s $9.5 Billion Clean Hydrogen Initiative. The funding opportunity includes $8 billion for Regional Clean Hydrogen Hubs, creating jobs to expand the use of green and blue hydrogen in the industrial sector; $1 billion for a Clean Hydrogen Electrolysis Program to reduce the costs of hydrogen produced from clean electricity; and $500 million for Clean Hydrogen Manufacturing and Recycling Initiatives to support equipment manufacturing and domestic supply chains. Several states, including California, Ohio, West Virginia, and Pennsylvania have announced their intention to compete for one of the Hubs, while other states like Louisiana, Oklahoma and Arkansas have decided to present a joint candidacy (HALO Hydrogen Hub) to the challenge. 

The U.S. Economic Development Administration (EDA) is also supporting hydrogen development. On September 2^nd, it awarded $50 million to the H2theFuture Project⁵ in Louisiana to work on R&D, training, business attraction efforts and barge conversion to hydrogen.

Green hydrogen providers will make site location decisions based on business factors including:

• Public funding;

• Access to renewable and affordable power necessary for it to be considered “green”;

• Availability and quality of talent, with transferable skills from other industries such as oil and gas; and

• Communities that are already recognized as distribution and logistics hubs, with a high concentration of potential users that will want to decarbonize operations in the coming years.

While the current energy situation is challenging, remarkable gains in renewable power and the electrification of transport have been achieved in the last decade. Similarly, we might look back at the 2020s and realize how green hydrogen was the final propellent to launch society into a cleaner, more sustainable future.

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Sources:

¹https://cellcentric.net/en/cellcentric-fuel-cell-series-production-desired-location-weilheim-for-klimawerk/

²https://www.thyssenkrupp.com/en/newsroom/press-releases/pressdetailpage/first-green-hydrogen-project-becomes-reality--thyssenkrupp-to-install-88-megawatt-water-electrolysis-plant-for-hydro-quebec-in-canada-93778

³https://www.ir.plugpower.com/press-releases/news-details/2021/Plug-Power-to-Build-North-Americas-Largest-Green-Hydrogen-Production-Facility-in-Western-New-York-2021-2-25/default.aspx

⁴https://www.powermag.com/aces-deltas-giant-utah-salt-cavern-hydrogen-storage-project-gets-504m-conditional-doe-loan-guarantee/

⁵https://gnoinc.org/news/h2thefuture-announcement/