The clock is ticking down on the Department of Energy’s award decisions for the $8B in funding available to create 6-10 Hydrogen Hubs. The hub funding was authorized in the 2021 Infrastructure Investment and Jobs Act, and further support is coming from “green” hydrogen production credits in the Inflation Reduction Act (IRA) of 2022. (For a great primer on the Hydrogen related IRA incentives I recommend this article from my favorite outlet for econ-enviro-policy research, “Resources for the Future.”)
More about the submitted projects
In total, seventy-nine H2 Hub projects were submitted for initial review. These proposals came from all over the country, but primarily around ports and industrial regions. DOE’s judging criteria included: qualifications, experience and capabilities; expected contributions toward a national hydrogen network; plans to develop production, end-use and connective facilities; and the community benefits plan, which requires applicants to plan equity and environmental justice considerations into their projects.
Of the 79 submissions, DOE identified 33 projects as the most promising and “encouraged” them to move to the formal approval stage. The final submissions were due in April, and S&P Global reported that 20 applications were self-confirmed. The initial “Phase 1” awards will be announced this Fall. Here are some interesting facts about the projects in the final running:
- The “encouraged” projects were larger and requested more dollars, signaling DOE’s preference for larger and more ambitious projects rather than smaller or pilot-scale efforts.
- The projects that we know were submitted into the current round expect to use a mix of feedstock for H2 production. Solar, Wind and Hydro Renewables; fossil fuels with carbon capture, utilization, and storage; and nuclear power. All these sources of electricity offer pathways to low-carbon production.
- Partnerships and the need for diverse groups to work together is key. In addition to industry players, stakeholders in these projects included state & local governments, project developers, research institutions & nonprofits, and community groups. All play a vital role in ensuring the long-term viability of these hubs, with the Community Benefits Plan (CBP) looming large, valued at 20% of the evaluation criteria.
- The encouraged H2 hubs offer two slightly different visions for using the funding:
- Public-private partnerships planning to leverage the federal dollars to coordinate projects between producers and off-takers, in order to develop a robust regional Hydrogen market.
- Private companies that would use the funding to build H2 production facilities, while developing local demand and coordinating resources for the hub.
- DOE encouraged some adjacent hub proposals to group themselves into a single application, again indicating a vision of larger-scale installations. It has been confirmed that two hubs that originally planned to operate independently have merged – an amazing feat of collaboration at this late stage.
One final resource I’ve found valuable was created by the Hydrogen and Fuel Cell Technologies Office: H2 Matchmaker is described as “an online information resource to assist hydrogen suppliers and users with self-identifying collaborators and opportunities to expand development toward realizing regional hydrogen hubs.” There is a lot of interesting information and contact details on this site. The tracker is a perfect example of the enthusiasm, and open desire to collaborate, that is a hallmark of clean hydrogen.
I’m personally fascinated by the administration and review of the H2 Hub grant process. By looking at the criteria and known projects, we can see how the federal government is attempting to scale clean hydrogen, make investment in multiple regions, and balance a whole raft of other policy aims. I find the directives to expand partnerships, scale local markets and end-users, and focus on directing a portion of benefits to disadvantaged communities encouraging. Responsibly making a public investment of this size, in this timeframe, is no small feat, but the publicity around the Hydrogen Hubs funding is already paying dividends by raising public interest in hydrogen. We’re all anxious to see the final list of approved projects for this historic investment in energy infrastructure and understand how hydrogen production through electrolysis will play out.