U.S. Hydrogen Hubs: The Utility's Role

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Guidehouse

Fortnightly Magazine - June 2023
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There has been tremendous interest in hydrogen in recent years, with the added support from the U.S. Department of Energy, along with public and private sector decarbonization targets. The Hydrogen Shot initiative targets an eighty percent reduction from today's cost of clean hydrogen, ultimately aspiring for one dollar per kilogram.

The recent Inflation Reduction Act incentives, such as production tax credits and increased Section 45Q credits for carbon sequestration — including direct pay credits for five years and a twelve-year credit duration — will help to bridge the cost gap and make clean hydrogen more cost-competitive.

A key commercial liftoff is the Bipartisan Infrastructure Law, which provides eight billion dollars in support for U.S. regional hydrogen hubs (H2Hubs). The U.S. DOE received seventy-nine concept papers from H2Hub developers, issuing thirty-three encouraged responses to submit formal applications by April 7, 2023.

Six to ten of those are expected to be awarded up to one and a quarter billion each to support a network of companies and other organizations, working together along the full hydrogen value chain (hydrogen production, offtake, and infrastructure such as pipelines and fueling stations).

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