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The ink is still wet on the contract, but the US Department of Energy is so excited about its new green hydrogen project that they went ahead and announced it anyway. The deal involves a conditional loan guarantee of up to $1.66 billion aimed at kickstarting the construction of six new electrolyzer facilities in the US, which will deploy electricity from renewable resources to push hydrogen gas from water. Sustainably speaking, that’s better than the current state of affairs, in which the global supply of hydrogen depends on natural gas, coal, and other fossil resources.
Green Hydrogen Pays Off For Plug Power
The $1.66 billion loan will go to the US firm Plug Power after the company and the Loans Program Office negotiate the terms and conditions, but the Energy Department is already licking its chops over the prospects for decarbonizing hydrogen fuel cell electric vehicles.
Fans of fuel cell electric cars should not get too excited over this particular program, though. The loan is focused primarily on making hydrogen fuel available for heavy-duty vehicles used in the material handling, transportation, and industrial sectors, including forklifts as well as trucks.
“The benefits of harnessing hydrogen fuel cells in applications such as material handling equipment include enhanced operational efficiency, reduced environmental impact through zero-emission operations, and increased productivity due to faster refueling times compared to conventional batteries,” the Energy Department notes.
“This conditional commitment advances President Biden’s efforts to strengthen domestic clean energy supply chains, which are essential to meeting the nation’s ambitious climate goals and enhancing our national and energy security,” they add.
Who’s Gonna Pay For All This Green Hydrogen?
As for who is lining up to buy all that green hydrogen, that’s a good question. Though costs are coming down, green hydrogen has a long way to go before hitting the Energy Department’s goal of $1.00 per kilogram.
Despite the higher cost, the Energy Department points out that Plug Power already has relationships with Amazon, Walmart, and Home Depot.
CleanTechnica caught wind of the Amazon connection last December, when we noted that the company has been switching over to fuel cell forklifts. “By 2022 the company had more than 15,000 fuel cell forklifts to its credit. Last year the company also announced plans to add another 5,000 fuel cell forklifts by 2025,” we reported. Amazon also let word slip that it has a new 1-megawatt electrolyzer on the premises of its DEN8 fulfillment center in Aurora, Colorado, built by Plug Power.
Walmart is another firm making the switch from battery-powered forklifts to hydrogen fuel cells with an assist from Plug Power. CleanTechnica’s Jennifer Sensiba has spotted fuel cell activity stirring under the Home Depot umbrella as well.
Beyond forklifts and other fuel cell vehicles, rising demand for green hydrogen can also come from the market for stationary fuel cells. The US Department of Defense, for example, has just launched a fuel cell-enabled microgrid project in Hawaii. If all goes according to plan, the Defense Department will flex its purchasing muscles to replace fossil energy with similar green hydrogen microgrids at its other facilities around the globe.
The Power Of The Forklift
The focus on forklifts may seem small potatoes, and relatively speaking it is. However, the switch to fuel cell forklifts has been having a ripple effect on the availability of hydrogen fuel stations. That can lead to more widespread use in trucks and other heavy duty applications, especially once the Energy Department’s new $7 billion Regional Clean Hydrogen Hubs grant program kicks in.
Freightwaves reporter Alan Adler is among those making the case.
“It’s true that what exists is primarily dedicated to material-handling fuel cell-powered forklifts,” Adler wrote in April of 2023, “But it is not inconceivable that some of those 120 locations where hydrogen is dispensed could form a backbone, or at least contribute, to hydrogen fueling for over-the-road long-haul trucks.”
Mobile fueling stations are another emerging option for expanding access to hydrogen, so keep an eye on that as well.
There Goes Texas, Again
The Energy Department is not the only one excited about the opportunity to grow a new green hydrogen industry in the US. Public officials in Texas have also jumped on the bandwagon. Despite protesting the evils of renewable energy investing, Texas Governor Greg Abbott was among those waving the pom-poms at the launch of a new $4 billion green hydrogen project in his home state last year.
Everything is bigger in Texas, so it’s no surprise to see other large-scale green hydrogen projects crop up there. CleanTechnica has also spotted a proposed 2.2-gigawatt electrolyzer project called Hydrogen City, under the wing of the Texas startup Green Hydrogen International.
That project appears to be moving along at a steady clip. In March, the global engineering firm ABB announced that its automation, electrification and digital technology will be assessed for potential use at Hydrogen City.
“ABB has already completed a feasibility study to develop an electrical system architecture that optimizes return on investment for the project and supports compliance with EU legislation governing Renewable Fuels of Non-Biological Origin (RFNBO)2 and the US Inflation Reduction Act (IRA),” ABB explained in a press release dated March 19.
We’ll Always Have Ammonia
Hydrogen City brings up an important point about the green hydrogen market. Fuel cell vehicles and stationary power sources are just two applications for green hydrogen. Another important application is ammonia production, and that’s where GHI is directing its attention.
If all goes according to plan, Hydrogen City will put Texas on the map as a leader in the emerging green ammonia market.
“The global green ammonia market, valued at $0.3 billion in 2023, is set to reach $17.9 billion in 2030, growing at a compound annual growth rate (CAGR) of 72.9 percent,” ABB points out.
“Ammonia has the potential to support decarbonization efforts as part of the energy transition through its use as an alternative fuel for heavy transport such as shipping, as well as its current major use in fertilizer production,” they add.
Apparently GHI is not deterred by concerns over a glut in electrolyzer production, as recently expressed by BloombergNEF among others.
Initial plans call for the 2.2-gigawatt Hydrogen City plant to produce 280,000 metric tons of green hydrogen per year. A natural salt formation will provide for 24,000 metric tons of storage, and a 75-mile pipeline to Corpus Christi will shuttle the hydrogen to ammonia production facilities and other off-takers.
That’s just for starters. GHI already anticipates that Hydrogen City will grow, topping off at 60 gigawatts depending on customer demand.
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Image: $1.66 billion loan for green hydrogen, courtesy of US DOE.
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