Hydrogen hubs are regions where heavy generators and users of fossil fuels and energy, governments and development partners come together to share costs and resources associated with hydrogen production as a clean energy source to fuel the economy. The colocation of traditionally carbon-intensive industries helps to reduce greenhouse gas emissions while minimizing capital and operating costs associated with infrastructure and supply chains. Hubs present opportunities for innovation, collaboration and resource-sharing across industry and public sectors to create a community centered around clean, reliable hydrogen energy, enabling the transition towards net-zero.
On November 15, 2021, President Biden signed the Infrastructure Investment and Jobs Act, also known as the Bipartisan Infrastructure Law (BIL). The BIL provides $8 billion over the next five years to the Department of Energy (DOE) for developing at least four regional clean hydrogen hubs demonstrating the production, processing, delivery, storage, and end-use of clean hydrogen. This has created an immense opportunity for governments, agencies and private sector organizations to work together on a shared vision for a hydrogen economy while taking advantage of near-term federal funding opportunities.
The DOE Funding Opportunity Announcement (FOA) is expected in September/October 2022 and will most likely require concept papers by the end of 2022. Full applications will be due in the second quarter of 2023. As dozens of hydrogen hubs are in planning phases across the US, here are seven elements for them to consider when planning hubs and applying for DOE and State Hub funding:
Across all industries, successful industrial hubs require a social license or community acceptance to become successfully integrated and operate freely. As expected, the public will have many questions regarding emergency preparedness, community growth resulting from industry expansion, understanding hydrogen technologies, fairness regarding the distribution of energy and water resources, and most importantly, a full understanding of safety implications.
We build trust with critical stakeholders by raising regulator and community knowledge and awareness of hydrogen via early and ongoing stakeholder engagement and consultation. Concerns about the proposed hydrogen hub can be raised and addressed while enhancing cohesion between developers, local governments and communities and promoting ongoing collaboration with safety and regulatory agencies such as Federal and State Occupational Safety and Health Administration (OSHA).
Supply chain considerations within each industry must be addressed to understand hydrogen's impact on regional and local economies. Before a full-scale hydrogen hub can be deployed, a market-activation pilot project can help determine how carbon-intensive industries will be affected and which areas can be serviced as new hydrogen consumers. For example, servicing connected appliances such as furnaces, boilers and stoves requires examining the entire supply chain to determine required changes to their practices. This could mean new or retrofit equipment to installation and every step in between. The pilot can also determine carbon-intensive practices that can be displaced, such as the use of coal in power plants, petroleum coke in cement manufacture and coal in steel manufacturing.
These pilots are a way to ensure the necessary steps are addressed across supply chains. Fostering an understanding with diverse national and global partners lends credence and weight to the hub creation. This can also help understand scale balancing if the demand for hydrogen within a given market is greater than hydrogen hubs could produce.
Understanding the opportunities and limitations of workforce resources within the emerging hydrogen market is imperative to its success. There is a need for skilled staff willing to transition to this industry. Training and research institutions, such as the American Institute of Chemical Engineers (AIChE)’s Center for Hydrogen Safety offers hydrogen-specific training to help accommodate these needs. The US has a strong workforce across fossil and renewable energy operations and advanced manufacturing that can be leveraged to fulfill workforce requirements. With support from government, industry and educational organizations, quality training programs can be tailored to the hydrogen industry, similar to the programs developed for the oil production industry in Texas or the mining industry in Sudbury, Canada.
The abundance of skilled staff in the US market, primarily from oil and gas which has used hydrogen for over 100 years, presents an opportunity for retraining on a generational scale. Several oil and gas industry skills are transferrable to green hydrogen production and blue hydrogen production using carbon capture, utilization, and storage. For example, hydrogen handling and safety for green hydrogen is essentially the same as practices which have been employed for many years. Exploration and subsurface reservoir modelling expertise from the extraction side of the business also is needed to support CO2 storage projects.
Renewable energy is a key input in the production of green hydrogen generation and transmission. Power purchase agreements (PPA's) ensure the hydrogen hub can access 100% renewable energy, reducing output variability. Establishing a system around PPA's to wheel renewable electricity over the transmission/distribution grid can enable hydrogen hubs.
Leveraging existing renewable energy across the country and accounting for new renewable infrastructure sources will help determine if energy requirements can be met. With added funding to expand the overall transmission capacity, some existing renewable assets will be able to accommodate additional power generation. A notable example is hydroelectric power. There is approximately 60,000 MW of renewable power generated by hydroelectric assets across the US, with the top 10 plants accounting for about 20,000 MW of this. However, this space has additional underutilized capacity due to demand-side limitations and infrastructure constraints that could be repurposed to support green hydrogen production.
Water infrastructure such as dams, transmission systems, disposal systems, water treatment, and wastewater recycling from industrial, power generation, municipal and agricultural processes are key elements for hydrogen production. Guaranteeing water quality and availability are crucial for the production facilities and surrounding communities. This element can be enabled by ensuring essential upgrades to water infrastructure are completed to provide adequate water for the scale and required timeframe of the Hub buildout.
Proximity to inland marine and port infrastructure, preferably with bulk liquid and/or gas infrastructure, is key to transporting gaseous hydrogen and ammonia to domestic and export markets. This includes intermodal hubs and port facilities with a density of potential hydrogen users and hydrogen fueling infrastructure. There must also be efficient transport corridors and elements that enable safe and efficient distribution of hydrogen and appropriate land zoning in the port vicinity to allow for the production and storage of hydrogen carriers such as ammonia.
Leveraging existing inland marine and port infrastructure is crucial for transportation and exports; however, modifications to port infrastructure to accommodate the transport of ammonia (a hydrogen carrier) will be required. This could include piping, manifolds for loading, and berths to transport the product from storage to ship.
Hydrogen energy has been growing in global interest over the past ten years. We have worked on over 50 hydrogen projects in Australia, Europe, and the Middle East. GHD works across the entire hydrogen supply chain, including production, connected infrastructure, export and end-use. Some of these projects are first-of-a-kind and world- scale. GHD is considered a leading technical and commercial authority supporting our clients in blending hydrogen into natural gas systems.
For more information on GHD’s experience across the hydrogen value chain, visit our Hydrogen Page.
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