US DOE Awards $2.2 Billion for Two More Clean Hydrogen Hubs

Gulf Coast H2Hub and Midwest H2Hub have become the fourth and fifth Regional Clean Hydrogen Hubs (H2Hubs) to secure federal cost support with the United States Department of Energy (DOE) announcing $2.2 billion Wednesday.

The earlier three are Appalachia H2Hub, California H2Hub and Pacific Northwest H2Hub. A total of seven H2Hubs were announced by the DOE last year for up to $7 billion in potential funding. The seven are expected to produce a combined three million metric tons of clean hydrogen a year, nearly a third of the 2030 U.S. target according to the DOE.

Wednesday’s announcement means five of the seven have now completed negotiations and locked in DOE funding, sourced from the Bipartisan Infrastructure Law. Some of the projects share common investors.

The California Hydrogen Hub and the Gulf Coast Hydrogen Hub have the biggest share of the funding with $1.2 billion each. Hydrogen to be produced in the California project will come exclusively from renewable energy including biomass. The Gulf Coast project meanwhile eyes to serve the Houston region, considered the U.S. energy-producing capital.

The California project is under the Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES), a public-private partnership founded by the Governor’s Office of Business and Economic Development, the University of California, the State Building and Construction Trades Council of California and the Renewables 100 Policy Institute.

The Gulf Coast Project is administered by GTI Energy on behalf of a consortium that includes oil and gas giants Chevron Corp. and Exxon Mobil Corp., as well as clean energy major Ørsted A/S.

Also backed by ExxonMobil, the Midwest Hydrogen Hub will span Illinois, Indiana, Iowa and Michigan. Federal funding will shoulder $1 billion of the project’s costs. Besides ExxonMobil, the public-private alliance implementing the Midwest project includes BP PLC and Air Liquide SA, among others.

Awarded $1 billion, the Pacific Northwest Hydrogen Hub will straddle Washington, Oregon and Montana. The implementing public-private coalition includes Amazon.com Inc. and Air Liquide.

The Appalachian Hydrogen Hub, which bagged $925 million, will also cut across three states, West Virginia, Ohio and Pennsylvania. Developers include Air Liquide and Enbridge Inc.

The two remaining projects that have yet to receive final awards likewise geographically involve multiple states. The Heartland Hydrogen Hub, earmarked $925 million, will rise in Minnesota, North Dakota and South Dakota. The Mid-Atlantic Hydrogen Hub, allotted $750 million, will be situated in Pennsylvania, Delaware and New Jersey.

“Clean hydrogen is a flexible energy carrier that can be produced from a diverse mix of domestic energy resources, including renewables, nuclear, and fossil resources with carbon capture”, the DOE said in Wednesday’s announcement. “Its unique characteristics will allow the H2Hubs to substantially reduce harmful emissions from some of the most energy-intensive sectors of the economy, such as chemical and industrial processes and heavy-duty transportation, while creating new economic opportunities across the country. It could also be used as a form of long-duration energy storage to support the expansion of renewable power”.

The projects aim to accelerate the commercial availability of low-cost clean hydrogen. The U.S. has set a target of reducing the cost of low-carbon hydrogen production to $2 a kilogram by 2026 and $1 per kilogram by 2031.

The projects can result in carbon dioxide emission reductions of 25 million metric tons a year, equivalent to the annual emissions of 5.5 million gasoline-powered motor vehicles, according to the DOE.

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