From powering the first combustion engine 200 years ago to evolving to become an important part of the green energy transition strategy in the United States, clean hydrogen is having a moment.
A really big moment.
With the recent announcement from the U.S. Department of Energy about a $1 billion initiative to invest in the clean hydrogen market and its support infrastructure in America, the roadmap is set for opportunities for clean hydrogen to see unprecedented growth.
With this projected growth comes high hopes that this burgeoning industry will do some heavy lifting towards national decarbonization goals across multiple sectors of the economy. The aim is to use federal incentives like the Inflation Reduction Act (IRA), Infrastructure Investment and Jobs Act (IIJA) and clean hydrogen initiatives to create a commercial “lift off.”
Amidst all the buzz about the future of clean hydrogen, we’re wondering, is clean hydrogen the new green energy frontier?
We’re diving into what’s happening with clean hydrogen right now, recapping what exactly clean hydrogen is and why the industry is so exciting at the moment. We’ll also talk about what we think are key indicators of success as well as what we’re watching for next!
What is clean hydrogen & what does it do?
Besides solar energy, hydrogen is one of the most abundant elements on earth! Traditionally, what we call blue hydrogen has been produced using natural gas, however clean / green hydrogen is hydrogen produced by electricity.
With lower emissions than traditional fossil fuel methods, it’s becoming an alternative to methane aka natural gas because unlike natural gas, when clean hydrogen is burnt, it doesn’t produce carbon dioxide.
Hydrogen can be used to power vehicles, generate electricity, power industry and heat our homes and businesses. It could also make a huge difference on our carbon emissions and will be critical to achieving net zero goals by 2050 in the United States (national grid).
What makes the clean hydrogen industry so exciting right now?
Clean hydrogen is poised to be the new green industry heavy hitter, with the projected ability to decarbonize up to 25% of global energy-related CO2 emissions (pathways to commercial liftoff).
To harness this green super power, the U.S. Department of Energy is incentivizing energy industry buyers and investors as well as hydrogen producers to unlock the full potential of clean hydrogen by removing bottlenecks and project impediments.
To kickstart the full end-to-end hydrogen supply and infrastructure network across the U.S., the proposed investment of up to $1 billion in a demand-side initiative will support Regional Clean Hydrogen Hubs (H2Hubs).
Funded by President Biden’s bipartisan Infrastructure Law, the H2Hubs program will help form the foundation of a national clean hydrogen network vital to reducing emissions from some of the most energy-intensive sectors of our economy (energy.gov).
Key points for the future of clean hydrogen success
According to David Crane, the DOE’s under secretary of infrastructure, in an interview with Bloomberg he states that there’s currently “a lot of interest among energy industry buyers who want to go zero-carbon in using clean hydrogen, but they’re going to wait to see that it’s there.”
With that said amid questions and hesitations about supply, price, and technology costs, we’re seeing positive trends coupled with the investment in the clean hydrogen supply chain which could indicate clean hydrogen living up to its potential as the next green energy frontier in the U.S.
Here are the key points that stand out to us:
-Funding to get America ahead: The investments and incentives being put forth right now are working to “ensure America is the global leader in the next generation of clean energy technologies” (energy.gov).
Historically, Europe has been and is still the most popular region for new hydrogen projects but North America has seen the largest increase in planned hydrogen projects in the past six months (WSJ).
-Adaptable infrastructure: The good news is that hydrogen can be transported through gas pipelines, minimizing disruption and reducing the amount of expensive infrastructure needed to build a new hydrogen transmission network (National grid).
-Easier adoption in the everyday lives of Americans: There would also be no need for drastic culture changes in our home lives, as many people and businesses are used to using natural gas for cooking and heating, and hydrogen energy equivalents are emerging (National grid).
-Versatility for various usages: From emissions reduction in industries historically reliant on fossil fuels and natural gas to the transportation industry blending into existing natural gas networks in buildings and power generation, clean hydrogen is versatile (iea).
-Job creation: According to DOE's Pathways to Commercial Liftoff Clean Hydrogen report, America's growing hydrogen economy has the potential to add 100,000 net new direct and indirect jobs by 2030.
What’s next for this new frontier?
The U.S. clean hydrogen market is poised for rapid growth, but for hydrogen to progress as planned as a viable alternative and replacement for natural gas it has to become more cost effective and be produced and used at scale. To do this, it requires collaboration and cooperation across multiple arenas.
“The Strategy and Roadmap also identifies needs for collaboration among federal government agencies, industry, academia, national laboratories, state, local, and Tribal communities, environmental and justice communities, labor unions, and numerous stakeholder groups to accelerate progress and market liftoff.”
-U.S. National Clean Hydrogen Strategy and Roadmap
One of the major challenges to overcome will be the market uptake as investments are made into the development of hydrogen distribution and storage networks. As a response to this challenge, we’re interested to see the effects of the proposed H2Hubs, intended to be the “liftoff” needed to get the clean hydrogen supply chain off the ground as later this year the Biden-Harris Administration will announce the selection of six to ten H2Hubs for a combined total funding of up to $7 billion in federal funding.
With previous false starts in the hydrogen industry, we’ll be watching to see if the investment happening now is the tipping point clean hydrogen needs to measure up to the recent successes of solar PV, wind, batteries and electric vehicles and help the U.S. reach its climate goals.
Want to keep reading? Here are our sources.
We share our thoughts on Industry news.
Ready to Talk?
Feel free to contact us!