Oregon and Washington scored big Friday in a fiercely contested national competition to grab a share of $7 billion to kickstart the production and use of “green” hydrogen, viewed as an important fuel source for cutting pollution from heavy industry.
President Joe Biden and Energy Secretary Jennifer Granholm announced that the Pacific Northwest bid was among seven winners of roughly $1 billion each in Regional Clean Hydrogen Hubs grant funding.
Oregon and Washington state leaders and a range of prospective fuel producers, industrial consumers, trade unions, utility companies and several Southwest Washington tribes collaborated on a joint pitch for the billion-dollar slice of federal money.
The details of what projects in the Northwest would be subsidized were kept mostly secret during the competition and remain fairly vague as of today. The U.S. Department of Energy said the Pacific Northwest hub proposal was expected to create more than 10,000 direct jobs – 8,050 in construction and 350 permanent positions.
“With this historic investment, the Biden-Harris Administration is laying the foundation for a new, American-led industry that will propel the global clean energy transition while creating high-quality jobs and delivering healthier communities in every pocket of the nation,” Granholm said.
Biden and Granholm visited Philadelphia on Friday for a formal announcement about the grants.
Over the past year, West Coast governors and Biden administration officials have talked up low-emissions hydrogen as a promising means to meet their climate goals, specifically to decarbonize sectors like shipping and steel-making that are proving difficult to convert directly to clean electric power.
During a media briefing prior to the president’s announcement of the winners, Department of Energy officials said an element they liked about the Northwest bid was how it would demonstrate use cases for clean hydrogen such as making fossil fuel-free fertilizer.
The Pacific Northwest proposal for hydrogen hub funding envisions that producers will make “green” hydrogen by splitting water molecules with an electric current. This process (known as electrolysis) is energy intensive and must use renewable electricity exclusively for the resulting hydrogen to be considered green.
In an emailed statement Friday, the Washington State Department of Commerce said no new wind and solar projects were specified in the region’s hydrogen hub proposal. The statement went on to say that the participating hydrogen producers “are working closely with renewable electricity project developers to ensure a stable, growing supply of clean energy is available to meet hydrogen production needs.”
A skeptical Lewis County Commissioner, Lindsey Pollock, questioned out loud this week where the electricity would come from to operate a large hydrogen factory proposed to be sited beside the soon-to-close Centralia coal power plant.
“They don’t know, or aren’t willing to say. The problem we have is that we’re going to be short approximately 240 megawatts of electricity when the coal plant comes offline,” Pollock wrote in an op-ed published by the Centralia Chronicle. “We all know what happens to prices when something becomes scarce.”
Unpacking the winning Pacific Northwest bid
Washington State Department of Commerce Assistant Director Chris Green said the hydrogen hub plan contemplates eight production and consumption “nodes” spread across Washington, Oregon and western Montana. Green said more information would become available after the project sponsors finalize the official grant contract with the federal government.
“Once we conclude negotiations with the Department of Energy, we will be able to share more about the locations and will start or expand work with local communities and regulators on project siting and permitting,” Green wrote in response to emailed questions.
“It’s important to note that during negotiations, some aspects of the planned Hub’s scope and scale may be modified. Therefore, the projects that will be part of the hub are not yet certain, so we’re limiting the information we share publicly about our projects at this point,” he added.
The Pacific Northwest Hydrogen Association did release a list on Friday of the major industry partners selected to participate in the hub. The list includes Australia-based Fortescue Future Industries, the prospective developer of the large hydrogen fuel production plant proposed in Centralia. Large volume users of the resulting hydrogen on the list include Amazon.com, heavy truck maker PACCAR and the Northwest Seaport Alliance, which comprises the ports of Seattle and Tacoma.
What companies could be involved?
The companies and organizations below have projects proposed as part of the Pacific Northwest hydrogen hub, according to the Pacific Northwest Hydrogen Association.
Air Liquide Hydrogen Energy US LLC
Amazon.com, Inc.
ALA Renewable Energy LLC
Atlas Agro
Centralia College
Mitsubishi Power Americas, Inc.
Northwest Seaport Alliance
NovoHydrogen Development, Inc.
PACCAR Inc
Portland General Electric Company (PGE)
Puget Sound Energy (PSE)
PUD No. 1 of Douglas County
Regis Solar, LLC
Synchronous LLC dba First Mode
Twin Transit
USA Fortescue Future Industries, Inc.
Williams Field Services Group, LLC
Another confirmed participant aspires to be a large producer and consumer of clean hydrogen at the same location. Atlas Agro has proposed a $1 billion green fertilizer plant near Richland, Washington. It would use clean hydrogen as a primary feedstock from which to make zero-carbon nitrogen fertilizer. A news release sent by Atlas Agro on Friday said its unspecified share of the hub funding would be spent on “planning, detailed design, environmental permitting, and procurement of long-lead equipment.”
“We’re super grateful for the support of the Department of Energy,” said Dan Holmes, president of North American operations for the multinational fertilizer company, in a follow-up interview. “Their support de-risks these first-of-a-kind projects.”
Washington and Oregon’s biggest utility companies, Puget Sound Energy and Portland General Electric respectively, celebrated their inclusion, too. PGE said it was studying the feasibility of repurposing the site of its demolished Boardman coal plant in northeastern Oregon to produce clean hydrogen. That hydrogen could be stored and then used when needed to generate clean electricity at times of peak demand.
Puget Sound Energy said Friday it has already started testing the blending of hydrogen with natural gas in its own equipment. The goal would be to lower the carbon footprint of natural gas-fired power generation or gas burned in consumer appliances.
Left off the hub participants list, but still eager to collaborate on the Northwest hydrogen hub project, is solar energy developer Obsidian Renewables. The Lake Oswego, Oregon-based company advanced to the semi-final round in the national funding competition with an independently-developed proposal for a regional hydrogen hub, but was ultimately passed over in favor of the state-led submittal.
The Energy Department said the $1 billion for the Pacific Northwest hub will be disbursed in phases over a span of years as the participating states meet project milestones. The first payout is expected to be relatively small to support design and planning. More money is expected during a subsequent engineering, permitting and financing phase. The biggest dollar flow will occur when the hydrogen hub moves into the construction phase. A final phase allows for an operating subsidy during the production ramp-up.
Beyond the Northwest
Clean hydrogen has been kicked around as an alternative fuel for several decades but has been hindered by its extremely high cost compared to traditional fossil fuels. The $7 billion investment in regional hydrogen hubs is not the only public subsidy the Biden administration is rolling out. The Democratic administration is also finalizing a hydrogen production tax credit to make the gas more viable. It remains to be seen if the combination, along with economies of scale, will be enough to make hydrogen cost-competitive for private-sector users.
The other winning bids selected for federal hydrogen hub funding included a proposal from California with a strong component for converting trucks and port operations to hydrogen fuel cell power. Three other winning regional bids from the Midwest and Northeastern U.S. rely at least partially on nuclear power to make their green hydrogen.
A Gulf Coast hydrogen hub, centered in the Houston area, was the largest selected for funding. The Gulf Coast hub plans to achieve large-scale hydrogen production using both natural gas with carbon capture and renewables-powered electrolysis.
The seven winners were selected from among 33 semi-finalists, which were whittled down from around 80 initial hydrogen hub proposals submitted by states, multi-state regions and private industry nationwide.
When fully built out, the Energy Department said the seven regional hydrogen hubs would together cut 25 million metric tons of carbon dioxide pollution from end-users each year — an amount the agency said would roughly equal the combined annual emissions of 5.5 million gasoline-powered cars.
Congress approved the money for the hydrogen hubs program as part of the bipartisan infrastructure bill in late 2021. The federal Energy Department said its grant awards would spur at least double or triple that amount in state and private matching money, if not more in several cases.
Oregon Capital Chronicle correspondent Alex Baumhardt contributed to this report.
by Tom Banse, Washington State Standard
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Highlighting the most interesting part of this article:
A skeptical Lewis County Commissioner, Lindsey Pollock, questioned out loud this week where the electricity would come from to operate a large hydrogen factory proposed to be sited beside the soon-to-close Centralia coal power plant.
“They don’t know or aren’t willing to say. The problem we have is that we’re going to be short approximately 240 megawatts of electricity when the coal plant comes offline,” Pollock wrote in an op-ed published by the Centralia Chronicle. “We all know what happens to prices when something becomes scarce.”
For me the most interesting part is that we may see society using hydrogen, perhaps the most abundant element on the planet, to generate power that has water as a by-product. This would greatly reduce the amount of carbon emitted into the atmosphere. Sure, the key is how do we produce the energy to separate hydrogen from other elements to which it is bonded? That is a difficult process. I believe it is foolish to think that we will be able to move the country away from the use of fossil fuels without some pain. As the owner of an antique car, I also hope that a limited amount of fossil fuels will always be available for use. The key is to save the climate of the earth from drastically changing in ways that will not support life as we know it. We built railroads for our steam engines. We laid highways for the internal combustion engines of our cars and trucks. We did this with public and private money. There was waste and corruption in the process, but it got done and arguably the country is better for it. I find it exciting to think that we now embark on another grand project to save not only the country but also the planet from ecological disaster.
Missing from the whole “green” energy movement – where do we get the ingredients for all of those “green” (to use) devices???
How much pollution is created, people’s lives destroyed and/or “slave” (?) labor to get the ingredients including the plastics, rare earth and other metals, copper, lithium, and ???
Our “fiat” (play) money is infinite, the planet’s resources are not
Our lifestyle, especially focused on war and destruction is based on infinite resources
What else is not being said???
I totally agree with Mr. Molly’s observations on this. If (and it’s a big if indeed) we could produce enough green hydrogen to convert all of our current road freight truck and, ideally, rail freight, transportation now using diesel, to burning hydrogen, that exhausts water instead of hydrocarbons, it would be huge for the climate. Two big issues with hydrogen gas are the need for a fairly large and heavy storage tank and the extreme explosiveness of the stuff (think The Hindenburg incident). This technology has to be explored as part of the overall answer to climate. Hydrogen burning passenger cars exist now but the stumbling blocks for them are the huge tanks, weight, and little to no infrastructure to support their practical use. This is the first attempt at infrastructure.
When we produce excess power/electricity from windmills or solar we can’t store it the production of hydrogen is one way to make use of it. Another might be to build reservoirs and pump water up to be stored and used to produce hydroelectric energy when the wind isn’t blowing or sun isn’t shining. Anyway looks like Washington is going to destroy our marine ecosystem with wind farms all along the coast I mean if we are going to kill the whales and disrupt the ecosystem the least we can do is not let that power go to waste.