US Department of Energy in $1 billion support for regional hydrogen hubs

The US Department of Energy (DOE) has unveiled plans for a $1bn demand-side hydrogen initiative to support its Regional Clean Hydrogen Hubs (H2Hubs) programme.

Later this year the DOE will announce the selection of six to 10 Regional Clean Hydrogen Hubs for a combined $7bn in federal funding, under the $8bn hydrogen hubs programme, funded by President Biden’s Bipartisan Infrastructure Law.

Under the latest initiative, the DOE said it hopes to support the growth and sustainability of the H2Hubs programme by providing revenue certainty to hydrogen producers to attract private sector investment, while meeting the needs of end users to purchase hydrogen.

The DOE is also looking to receive private and public consultation on the shaping of the initiative.

The proposed mechanism plans to help connect the H2Hubs to prospective purchasers, providing durable demand and sufficient customers for the hubs while supporting the US government’s wider goals of being a leader in the hydrogen economy.

The DOE added that it is seeking public input on the potential benefits and risks, operating models, governance structures and equipped implementing partners.

“Ensuring America is the global leader in the next generation of clean energy technologies requires all of us – government and industry – coming together to confront shared challenges, particularly the lack of market certainty for clean hydrogen that too often delays progress,” said US Secretary of Energy, Jennifer Granholm.

“That’s why DOE is setting up a new initiative to help our private sector partners address bottlenecks and other project impediments – helping industry unlock the full potential of this incredibly versatile energy resource and supporting the long-term success of the H2Hubs.”

Plans for the initiative come after the US has faced criticism that its focus weighed more heavily on hydrogen production than use, following the Inflation Reduction Act (IRA), which offers up to $3/kg in tax credits for clean hydrogen production.

However, in the DOE’s recently revealed National Clean Hydrogen Strategy and Roadmap, which outlined the opportunity to produce 50 million tonnes of hydrogen annually by 2050, the US looks set to support both production and use of the energy.

The DOE outlined three key strategies:

  • • Targeting strategic, high-impact uses for clean hydrogen, which the US hopes will ensure that clean hydrogen is utilised in the highest benefit applications, such as industry, heavy-duty transportation and long duration energy storage;
  • • Reducing the cost of clean hydrogen by catalysing innovation and scale stimulating private sector investments, and developing the clean hydrogen supply chain; and
  • • Focusing on regional networks with production and end-use in close proximity to enable maximum benefit from infrastructure investment, drive scale, and facilitate “market lift-off.”