Amidst an epoch dominated by heightened environmental consciousness and a resolute quest for sustainable energy alternatives, the United States finds itself in the midst of a profound and consequential policy transformation.
Emerging as an indispensable energy carrier, clean hydrogen is garnering mounting acclaim for its capacity to usher in decarbonisation across diverse sectors of the nation’s economy.
With unwavering determination, the nation now sets its sights on embracing clean hydrogen as a paramount protagonist in shaping its energy landscape.
The US hydrogen strategy for clean energy dominance
The US has published several targets, policies, and regulations to support the deployment of clean hydrogen technologies in the country. These include:
US National Clean Hydrogen Strategy and Roadmap
The US Department of Energy (DOE) has unveiled the National Clean Hydrogen Strategy and Roadmap, a visionary document outlining the nation’s ambitions in the realm of clean hydroen.
Notably, the strategy charts a course towards momentous milestones, aiming to produce an impressive 10 million tonnes of clean hydrogen annually by 2030, escalating to 20 million tonnes by 2040, and an astounding 50 million tonnes by 2050, a remarkable surge from its nearly negligible current production.
To bolster this transformative vision, the roadmap targets a robust electrolyser manufacturing capacity of 3GW or more by the year 2028.
Furthermore, the strategy sets its sights on enhancing the efficiency and durability of both low- and high-temperature electrolysers, promising advancements that will fuel the path to a sustainable hydrogen future.
US National Hydrogen Strategy and Roadmap
Source: PTR Inc.
Inflation Reduction Act (IRA)
A colossal sum of $369 billion has been earmarked for funding climate and clean energy initiatives, with a particular emphasis on advancing hydrogen technology. This funding encompasses a Tax and Climate Bill designed to provide substantial spport, offering tax credits amounting to $3 per kg for the production of low-carbon hydrogen. By doing so, this bill holds the transformative potential to render clean hydrogen production more cost-effective than its fossil fuel-based counterpart.
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Bipartisan Infrastructure Law (BIL)
For the very first time within US legislation, the term ‘clean hydrogen’ is precisely defined by BIL to signify hydrogen production with a carbon intensity equal to or lower than 2 kg CO2e/kg H2.
In an effort to advance the development and deployment of clean hydrogen, a significant allocation of $9.5 billion has been designated over the course of the next five years.
This substantial funding is thoughtfully allocated as follows:
An impressive amount of $8 billion is dedicate to establishing Regional Clean Hydrogen Hubs, an initiative that is set to be accomplished by the year 2026.
Another $1 billion is channeled into the H2 Electrolysis Program, a comprehensive endeavour encompassing research, development, demonstration, commercialisation, and deployment efforts. The primary objective of this programme is to drive down the cost of hydrogen produced through electrolysis to less than 2 USD/kg by the year 2026.
Additionally, $500 million is assigned to the Clean H2 Manufacturing & Recycling initiative, aimed at enhancing the efficiency and sustainability of hydrogen manufacturing processes and fostering recycling practices.
Together, these strategic allocations aim to propel the advancement of clean hydrogen technologies and reinforce the nation’s commitment to a more sustainable energy future.
The Hydrogen Shot: (111 Goal)
It seeks to reduce the cost of clean hydrogen to $1 for 1 kg within 1 decade, which it refers to as the “111 Goal”.
Building the fundation: Electrolyser manufacturers to establish new facilities in the US
The offering of tax credits in the IRA has sparked a remarkable trend in the US electrolyser market, with existing companies expanding their operations and new entrants venturing into the industry.
This influx of investments from various companies promises to bring about significant developments in manufacturing facilities and a notable increase in the production capacity of the country’s electrolyser market.
A few notable examples of these transformative initiatives include:
Nel, a prominent Norwegian electrolyser manufacturer, is taking substantial strides to fortify its presence in the US market. It is expanding its PEM electrolyser manufacturing facility in Wallingford, Connecticut, with the ambitious goal of reaching an annual production capacity of around 500MW by the year 2025. In addition, Nel has unveiled plans to establish a state-of-the-art automated electrolyser manufacturing facility in Michigan engineered to accommodate a remarkable production capacity of up to 4 GW of electrolysers.
EvolOH, Inc., an innovative cleantech enterprise, has made a resolute commitment to build a manufacturing plant in Massachusetts, dedicated to fabricating and assembling its groundbreaking anion exchange membrane (AEM) electrolyser stacks. Once fully operational, this facility is set to emerge as the largest of its kind globally, with a staggering capacity to produce up to 3.75GW of electrolysers annually.
Backed by the visionary leadership of Bill Gates, the start-up Electric Hydrogen (EH2) is making its mark with the announcement of an electrolyser manufacturing factory in Massachusetts. The company envisions producing up to 1.2GW of its cutting-edge 100MW electrolysers each year, poised to revolutionise the industry with its innovative approach.
Notable collaborations between industry giants, Plug Power and Johnson Matthey, are set to yield groundbreaking results. Their joint venture is co-inesting in what is projected to become the world’s largest catalyst-coated membranes manufacturing facility. Located in the United States, this facility is slated to boast a manufacturing capacity of 5GW by 2025, with ambitious plans for further scaling up to an impressive 10GW in the future.
The collective impact of these endeavours is poised to reshape the landscape of clean hydrogen technology in the United States, propelling the nation towards a more sustainable and energy-efficient future.
Building the Foundation: Electrolyser Manufacturers to Establish New Facilities in the US
Source: energy.gov
Green hydrogen revolution: Major projects driving the US market
Several green hydrogen projects have been announced in the US. Some noteworthy projects include:
Air Products, AES Project
Located in North Texas, this groundbreaking venture is poised to become the most expansive endeavour of its kind within the US. Boasting an impressive production capacity of 200 million tonnes of gren hydrogen daily, the project draws its power from 1.4GW of dedicated wind and solar assets.
Set to be fully operational by 2027, it will play a pivotal role in supplying the mobility market and industrial buyers with an abundant and emissions-free source of hydrogen.
SGH2 Lancaster Plant
The upcoming facility situated in North Texas is primed to manufacture a substantial amount of green hydrogen, with a daily output reaching up to 11,000 kg and an annual capacity of 3.8 million kg.
Notably, prominent Hydrogen Refueling Station (HRS) operators in California have committed to procuring the plant’s output. This strategic collaboration will facilitate the significant growth of hydrogen infrastructure throughout California over the next decade.
Donaldsonville Green Hydrogen Project
A 20MW alkaline electrolysis plant is under construction at the Donaldsonville manufacturing complex in Louisiana. The project, managed by CF Industries, will integrate into existing ammonia synthesis loop, and produce 20,000 tonnes of green ammonia annually. When completed in 2023, it will become the largest facility of its kind in North America.
Kingsland Green Hydrogen Plant
Located in Camden County, Georgia, and operated by Plug Power, it aims to produce 15 tonnes of green hydrogen per day, which will be liquefied, and stored before being transported. This project will start operations by end-2023.
Looking Forward
The United States’ strategic embrace of clean hydrogen as a fundamental pillar of its energy policy represents a momentous stride towards a sustainable and decarbonised future.
In unlocking its potential to curtail emissions, bolster energy resilience, and catalyse economic prosperity, clean hydrogen emerges as the pivotal solution to energize the nation and combat the pressing challenge of climate change.
Encouragingly, recent advancements in electrolyser technologies, the entry of new industry players, expansions of existing manufacturing facilities, and the estabishment of innovative facilities, all accompanied by substantial support from both public and private sectors, collectively herald a promising trajectory for the burgeoning clean hydrogen market in the United States.
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About the author
Jannat Wasif is working as lead analyst Hydrogen at PTR Inc. She performs in-depth research and analysis across the entire value chain of hydrogen and maintains a comprehensive database of installed and planned hydrogen projects across the world along with an all-inclusive report on the hydrogen market.
Jannat has a technical background with an MS and BS degree in Electrical Power Engineering from NUST and CUI respectively and has previously worked as a Research Assistant at US Pakistan Centre for Advanced Studies in Energy, NUST.