让氢枢取得成功- -使氢枢纽成功

JULY2022

MakingHydrogenHubs

aSuccess

JosephMajkut,JaneNakano,MathiasZacarias

Introduction

Inalow-carbonworld,low-emissionshydrogenwillbeusefulasanenergycarrierandwhenendusesaretoohardorexpensivetoelectrify.Thus,hydrogenplaysakeyroleinmodeledscenariosofadecarbonizedfuture.Notably,theInternationalEnergyAgency’s(IEA)

Net-zeroScenario

hascalledforhydrogenfromlow-carbonsourcestomakeup10percentoffinalenergyconsumptionworldwideby2050.Thislargescaleofprojectedconsumptionmeansthatstandingupanindustrytomake,process,anduselow-carbonhydrogenisonepartofaneededresponseformanycountries,includingtheUnitedStates.

Inthe

InfrastructureInvestmentandJobsAct

(IIJA),theU.S.CongressauthorizedthecreationofRegionalCleanHydrogenHubs(H2Hubs)toaddressthemultiplechallengesfacingthisnascentindustry.IntheUnitedStates,thereispresentlylittleproductionoflow-emissionshydrogen,fewusers,andalmostnolinkagesbetweenthem.Tosolvethesechallenges,thelegislationcallsforeachH2Hubtoestablish“anetworkofcleanhydrogenproducers,potentialcleanhydrogenconsumers,andconnectiveinfrastructurelocatedincloseproximity”todemonstratetheproduction,processing,storage,transportation,anduseofcleanhydrogen.

Underthelegislation,hydrogenisconsideredcleaniflessthantwokilogramsofcarbondioxide(CO2)isemittedforeverykilogramofhydrogenproduced.Theproductionofsuchlow-emissionshydrogenisthekeyrequirementoftheH2Hubsprogram,whichalsoneedstodemonstratetheproductionofcleanhydrogenfromdifferentsources,includingfossilfuelfeedstocks,renewables,andnuclearpower.H2Hubswillalsoneedtodemonstratetheuseofhydrogeninpowergeneration,industry,heating,andtransportation.

ThelegislationalsocallsforH2Hubstobeanengineofeconomicgrowthandinvestmentintheregionswherethehubsarelocated.Beyondtheformalrequirementsfortechnicaldemonstration,theonlyotherinstructionfromCongressisthattheU.S.DepartmentofEnergy(DOE)“shallgiveprioritytoregionalclean

hydrogenhubsthatarelikelytocreateopportunitiesforskilledtrainingandlong-termemploymenttothegreatestnumberofresidentsintheregion.”InaJune2022

announcement

ontheprogram,theDOEhighlightedhowtheeconomicgoalsoftheprogramarepartoftheIIJAandPresidentBiden’sagenda,includingby“enhancingU.S.competitivenessintheworld,creatinggoodjobs,andensuringstrongeraccesstotheseeconomicbenefitsforunderservedcommunities.”

TheH2Hubsprogramoffers$8billionininvestmentforanascentindustrythatcouldbothhelptheUnitedStatesreducegreenhousegasemissionsandleadthewayinagrowingpartoftheglobalenergyindustry,creatingjobsandeconomicbenefitsathome.Ascommunities,states,andconsortiacompeteforH2Hubsgrants,theycandesignhubsfortechnicalandeconomicsuccess.AndtheDOEcanbuilduponexistingexperienceinstituting

EnergyInnovationHubs

tobuildecosystemsofinnovationatalargescale.

Inspring2022,theCSISEnergySecurityandClimateChangeProgramhostedseveralworkshopstoexplorehowbestpracticesinregionaleconomicdevelopmentandinnovationpolicycouldhelpinformthedesignandadministrationofH2Hubs.Theprogramalsoconsideredhowhubmodelsarebeingusedaroundtheworldtofosterinvestmentinclean-hydrogenproductionandcreatemarketdemandforit.Thisreportisaproductofthoseworkshopsandresearchthatprecededandfollowedthem.

GLOBALOVERVIEW

Countriesareplanningpathwaystonet-zerogreenhousegasemissionsthatrelyoncleanhydrogen,leadingtogrowinginvestmentinterestaroundtheworld.Potentialproducersseecleanhydrogenexportsasaneconomicopportunity.Potentialconsumersseeitsbenefitsfordecarbonizationandenergysecurity.However,globally,interestisonlybeginningtoturnintoinvestment.

The

GlobalHydrogenReview

fromtheIEAtracksplannedclean-hydrogenprojects.AsofNovember2021,combinedprojectsunderdevelopmentwouldproduce17milliontons(Mt)oflow-carbonhydrogenby2030,8fromelectrolysisand9fromfossilfuelswithcarboncapture.TheIEAestimatesthatglobaldemandwouldbe80Mtinitsnet-zero2050scenario.

Mostpolicysupporttodatehasfocusedonthesupplysideoftheequation.Measurestoinducedemandarehardertofind.Withoutadequatedemand,however,scalingproductionprocessesforhydrogenwillnotcreateareasonablepathtowardcommercializationorreliablesupply.Aclean-hydrogenproductiontaxcreditwasamongthetaxincentivesproposedaspartofPresidentBiden’sclimateagenda,indicatingthatsuchapolicymaybeimplementedintheUnitedStatesinthefuture.

TheRussianinvasionofUkrainemayhavecreatedanearlymarketforlow-emissionshydrogen.TheEuropeanUnion’s

RePowerEUplan

targetsconsuming20Mtofhydrogenfromlow-carbonsources,with10MtproducedwithintheEuropeanUnionand10Mtimported.SuchastrongmarketpullcouldmakeasignificantdifferencefornascentprojectsincountriestargetingEuropeasanexportmarket.

MeetingRequirementsforH2Hubs

UndertheauthorizinglanguageoftheIIJA,H2Hubsmustsatisfyrequirementsforregionaldiversity,feedstockdiversity,andend-usediversityacrossthedifferenthydrogenhubs.ThissectionreviewsthoserequirementsandshowsthattheearlyresponsetoH2HubsindicatestheprogramshouldbeabletosatisfytheIIJA’stechnicaldemonstrationrequirements.

MakingHydrogenHubsaSuccess|2

REGIONALDIVERSITY

Tosatisfyregionaldiversity,theDOEisrequiredtosupportatleastfourhubsindistinctregions.

Responses

totheDOErequestforinformationsuggestednineregionalclusters(thePacificNorthwest,California,theSouthwest,theCentralUnitedStates,theGulfCoast,theGreatLakes,NewEngland,Appalachia,andAlaskaandHawaii).Moregranularindependent

studies

haveidentifiedatleast13regionalclustersfeaturingexistinghydrogenproduction,consumption,orinfrastructure,wheremultipleclustersexistwithinbroadgeographicalregions(e.g.,theareasaroundBatonRouge,Louisiana,andHouston,Texas,arebothontheGulfCoast).

IntheJune2022

noticeofintent

,theDOEnotedthatitwouldlikelytarget6–10hubproposalsforadvancementthroughthefirstphaseofconcepttoplanning.A

survey

ofpressreleases,coverageinthetradepress,andotherresourcesshows22effortstoestablishcandidatehubs(atvariouslevelsofconceptualdevelopment)aroundthecountryasofJune2022.ThatfigureleavesplentyofoptionsfortheDOEtolaterchooseamongorconsolidateandstillmeettherequirementsofgeographicaldiversity.

WHATDEFINESAREGION?

Thepurposeofthehubmodelistoaccelerateandsupportthecoordinatedactionsoffirmsatdifferentpartsoftheclean-hydrogenvaluechainandconnectthemwithresearch,development,andworkforcecapacity.Ratherthanfocusingsolelyongeographicregionorstates,H2Hubscanbetterdefinetheirfootprintintermsoftheconnectionstheyplantobuildamongfirms,installationsandinfrastructure,existinginstitutionssuchasuniversitiesandcolleges,andcivilsocietyactors.Thisnetworkapproachwillbetterallowforself-organizationamongregionalactors,complementingmoreformalcoordinationefforts.

Flexibilityforself-definitionwouldallowmultipleH2Hubs,oratleastnodeswithinthem,toworkinthesamegeographicregionsandaddscaleanddiversitytotheportfolioofH2Hubswithoutforcingconsolidation.Forexample,theGulfCoast—spanningTexas,Louisiana,Mississippi,andAlabama—hostsexistinginfrastructure,consumersofhydrogeninthechemicalindustry,andprospectiveparticipantsinH2Hubs.Multiplehubsmaybecreatedinthiswidegeographicalregionwithoutstraininglocalresources.Likewise,marketopportunitiesinstateswithnet-zerotargetsorhighlevelsofcurrenthydrogenconsumptioncanbemadeaccessibletomultipleH2Hubsthroughconnectiveinfrastructurethatcrossesstates.

AdaptedfromresponsetoDOEHydrogenProgramRequestforInformation#DE-FOA-0002664

FEEDSTOCKDIVERSITY

Fromearlyannouncements,H2Hubproposalswillincludehydrogenproducedfromfossilfuelfeedstocksandfromelectrolysispoweredbyrenewables.Severalnascenthubsalsoincludenuclear-poweredelectrolysisaspartoftheirconcept.Thekeyindicatorsoflong-termviabilityforeitherwillbethecostofproducinghydrogenfromelectrolysiswithcleanpoweratscaleandtheemissionsintensity,includingupstreamemissions,ofhydrogenmadewithfossilfuelfeedstocks.

TheUnitedStatescurrentlyproducesapproximately10Mtofhydrogenperyear,about95percentofwhichismadevianaturalgasreforming(alsoknownassteam-methanereformingorSMR)inlargecentralplants.Severalofthoseplantsusecarboncapturetoreducetheemissionsintensityofhydrogenproduction,butnofacilityisyetproducinghydrogenwithanemissionsintensityatorbelowthebenchmarksetbytheIIJA.

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Technicalassessmentsshowthatitispossibletoproducehydrogenfromfossilfuelfeedstockswithemissionsintensityatorbelow2kilogramsofcarbon-dioxideequivalentattheproductionfacility.AtahighrateofCO2capture,hydrogenproducedwithSMRorauto-thermalreformingwillmeettheemissionsintensitytarget,accordingtostudiesfrom

Pembina

andthe

GlobalCCSInstitute

.However,capturingthecarbondioxideathighefficacyandatreasonablecostwillrequireinnovation.

Akeychallengeforfossilfuelhydrogenwillbetheemissionsassociatedwithnaturalgasproductionanddistribution.Evenathighcapturerates,carboncaptureandstorage(CCS)mightnotbeeffectiveforproducingcleanhydrogenaftertakingintoaccountfugitivemethaneemissions,otherupstreamemissions,andcarbonemissionsoutsideoftheCCSprocessstream,particularlyunder

theleastfavorable

assumptions

formethane-leakratesandhighglobal-warmingpotential.ManagingupstreamemissionsisnotaformalrequirementoftheH2Hubsprogram,butithasbeenidentifiedasaprioritybytheDOEandwillbeakeymetricformarketinghydrogenforthepurposesofdecarbonization.

Themainalternativetohydrogenproducedfromfossilfuelfeedstocksishydrogenproducedbyelectrolysis.Atcurrentlevelsofcarbonintensity,theemissionsassociatedwithgrid-poweredelectrolysiswould

exceed

theclean-hydrogenstandard.Whenelectrolysisispoweredbyrenewablesornuclearpowerexclusively,thisconcernwillbeobviated.Costistheotherchallenge.Electrolysisisanexpensiveprocessbecauseofthepriceofelectrolyzers—butinthelongterm,

predicteddeclines

inthecostofelectrolysiswillhelpscaleupthispathwayandmakegreenhydrogen

morecompetitivelypriced

.

Nuclearenergyisanotherelectrolysis-basedalternative.Asourceofbothconstantcleanelectricityandthermalheatatscale,nuclearpowercouldbeleveragedforhydrogenproductionvia

electrolysisathigher

temperatures

,resultinginhigherefficienciesanddecreasedelectricityconsumptionperunitofhydrogen.

END-USEDIVERSITY

HydrogenconsumptionintheUnitedStates

iscurrentlydominatedbyusersintherefiningsector(57percent),ammoniaandmethanolproduction(38percent),andmetaltreating(2percent).TheH2Hubsprogramaimstoincreaseend-usediversitybyensuringthathubsgearhydrogenusetowardatleastoneofthefollowingsectors:electricpowergeneration,residentialandcommercialheating,heavyindustry,ortransportation.

▪ElectricPowerGeneration–Astheshareofintermittentrenewablepowersourcesincreases,cleanhydrogenwillbeabletomeettherisingdemandfordispatchableandlow-carbonelectricitythankstoacomparativelylower

levelizedcostofstorage

thanotherstoragetechnologiesfordischargedurationslongerthantwodays.Hydrogencouldbeusedinfuelcellsasacleaneralternativetodieselgeneratorsorbeblendedwithnaturalgas.

Ongoing

projects

intheUnitedStatescurrentlyseektoburnafuelblendofhydrogenandnaturalgasinpowerplantsbutultimatelyaimtorunexclusivelyonhydrogen.

▪ResidentialandCommercialHeating–Heatingandcoolingintheresidentialandcommercialsectoraccountfor

13percentofU.S.greenhousegasemissions

.Althoughitisstillinearlystagesofdevelopment,a

heating-fuelblend

ofupto20percenthydrogencouldbeusedwithexistinginfrastructureandappliances.Meanwhile,afullconversionto100percenthydrogen-fueledheatingofbuildingsmaybecostlyandposealogisticalchallengebecauseoftheneedtoreplacepipes,fittings,andappliances.

▪Industry–Presently,hydrogenconsumptionisdominatedbyoilrefining,chemicalproduction

(e.g.,methanolandammonia),andironandsteelproduction.Refiningoffersanimmediatesourceofscalabledemandforcleanhydrogen,whichwillreduceemissionsintensityforrefineries.Inthechemicalsector,ammoniaandmethanolwilldrivehydrogendemandasthesehydrogen-basedfuelsareincreasinglysoughtafterforcleanusesandapplications,includingpotentialexport.Hydrogenisalsooneofthefewlow-emissionsoptionsforsteelmakingandothermanufacturingprocessesthatrequirehightemperatures.

▪Transportation–Fuelcellswillbeanimportantresourcefor

transportation-sectorapplications

thatarehardtodecarbonizeviaelectrification.Hydrogenfuel-cellelectricvehicles(FCEVs)wouldbebettersuitedtomeettheexistingdemandforlongerdrivingranges,heavyloads,andfasterrefuelingtimesposedbymedium-andheavy-dutytrucksandvehicles,withforkliftsrepresentinganearlymarketsuccess.

Furtherapplications

ofhydrogenintransportationincludelong-haulrailandfreight;maritimepassengervesselssuchasferries,cruiseships,andriverboats;andalternativeaviationfuels.

TheH2Hubsprogramrequiresend-usediversity,buttheultimategoalistosupportthedevelopmentofcomprehensive,establishedmarkets.Movingfromsingleendusestoregionalmarketswithmultipleparticipantswilltakefocusedeffortbyflexibleinstitutionsoperatingalongside,orwithin,H2Hubs.

ToolsforBuildingCleanHydrogenMarkets

Despiteitspromise,cleanhydrogenhasnoestablishedmarketwheresupplyanddemandmeetthroughtransparentprices.Ashydrogenhubstakeshapeandsupporttheproductionanduseofcleanhydrogen,establishingmarketsforcleanhydrogenwillbeessentialtothesustainabilityoftheindustryintheUnitedStates.Withoutagrowingmarket,theregionalexpertiseandinfrastructureestablishedbyhubswillhavelittleroomtogroworsustainthemselvesafterfederalsupportisexhausted.Andwithoutsufficientofftakeagreementsandcommercialdemand,itmaybehardtoattractprivatecapitaltohubsatlargescale.

Hubs,hostregions,andtheDOEwillneedtofindcreativeapproachestomarketbuilding.Asinterestinbuildingsustainablemarketsforhydrogendevelopsaroundtheworld,severaltoolshaveemergedthatmayguidebestpracticesforplanningandexecution.Thesetoolstakeadvantageofhubsasfinancialandlogisticalfocalpointsandengagewithstatepolicymakerstofosteranadaptivepolicyframework.

FEDERALPROCUREMENT

Governmentprocurementatsufficientscalecancreateinitialdemandforclean-hydrogensuppliesanddemonstratepoliticalcommitmenttodevelopingaclean-hydrogeneconomy.Theviabilityofthispolicytool restsontheauthorityandlong-termcommitmentofthefederalexecutivebranch,whichcanhelpmakedemandpredictable,thusfacilitatingthespeedydevelopmentofacleanhydrogenmarket.In

Executive

Order(EO)14057,

signedinDecember2021,theBidenadministrationrecognizedtheroleofthefederalgovernmentas“thesinglelargestlandowner,energyconsumer,andemployer”inthenationthatshould“leadbyexampletoleveragescaleandprocurementpowertodriveclean,healthy,andresilientoperations.”Sustainedcommitmenttothesegoalsbyfutureadministrationswillbeimportantformarketformation.

Federalstandardssettingcansimilarlybeusedtoencourageclean-hydrogenapplicationsinsectors

thatareotherwisehardtoelectrifyandthusdecarbonize.Asapurchaserofend-useproductsortheircomponents,anyfederalgovernmentagencycouldessentiallyspecifytheuseofcleanhydrogenintheirmanufacture.Forexample,afederalgovernmentcouldrequiresteelandothermaterialsusedtoconstructfederalbuildingstomeetastringentemissionsthresholdthatcanessentiallybemetonlythroughsteel-

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productionmethodsusingcleanhydrogen.Smeltingirontoproducesteelishighlycarbon-intensive,makingtheironandsteelsectoroneofthemostcarbon-emittingindustrialactivitiestoday.Instructingitscontractorstousegreensteel(e.g.,madefromhydrogen-powereddirectreductionofiron),federalagenciescanjumpstartthedemandforcleanhydrogen.Infact,usingconstructionmaterialswithlow-embodiedcarbonemissionsisamongthetargetareasforfederalprocurementunderEO14057.

EXCHANGESORCLEARINGHOUSES

Inanexchange—amarketplaceforclean-hydrogentrading—theoperatorcoordinatesconsumers’purchaseofcleanhydrogenfromproducers,ratherthanhavingthemcontractwitheachotherdirectly.Exchangescanbeaneffectivetooltoreducetransactioncostsbyparticipants,forinstancebybundlingconsumerofftaketomeetwhatasinglelargeproducercanprovide.Theycanbeparticularlyusefulinbuildingamarketforcleanhydrogengiventhatthepaceandscopeofscalingupremainsuncertainonboththeproductionanddemandsidesduetouncertaintyoverregulationsandfinancialavailability.

H2GlobalinEuropeisanexampleofhowagovernment-fundedintermediarycanconductdualauctions,onewithcommercialsuppliersandanotherwithcommercialofftakers.Thismodelofanexchangeprovidescertaintytobothproducersandconsumersbysubsidizingandguaranteeinghydrogentrades.Contractsanddeliveriescanbeshortontheofftakerside,butthemechanismaimsfortheauctionstobeheldfrequentlyenoughtoallowpricestorisetoreflectthedevelopmentofclimateregulationsthatcreategreatervalueovertime.Thisapproachcanaccommodatenewentrants—suppliersandofftakers—inadynamicmanner,unlikesomeothertoolsthatsetstructuralorphysicalparametersforaconsortiumofparticipants.

STATEPOLICYDRIVERS

Policiesatthesubnationallevelcanalsohelpdevelopclean-hydrogenmarkets.Likethefederalgovernment,stateshavetheirownprocurementpoliciesandregulateutilitiestosetavarietyofpolicygoals.Manystatesalreadyhavedecarbonizationcommitmentsthatincludeemissions-reductiontargetsforthepowersectororstatewidenet-zeroemissionsgoals.Severalhavealsoissueddetailedactionplansandsector-specifictargetstomeetsuchclimategoals.Thesetargetscouldunlocknewandadditionaldemandforcleanhydrogen.

BothNewYorkandCaliforniahaveseteconomy-widenet-zeroemissionstargets.Asfirms,gasutilities,andothersinthesestateschartacoursetowardthesetargets,themarketopportunityforprospectiveendusesofcleanhydrogenissignificant.Associatedpolicies,suchasCalifornia’scap-and-tradeprogram,low-carbonfuelstandard,andzero-emissionvehiclemandate,offeradditionalsourcesofpotentialsupportandcreditingforclean-hydrogendeployment.

CapturingBenefitsfromH2Hubs

GovernmentsupportforinnovationcanhelpdevelopnewtechnologiesandresourcesthathelptransformtheU.S.economy.Low-costsolarpower,hydraulicfracturing,andelectricvehicleshaveallbenefitedfromgovernmentandDOEsupportforresearch,innovation,anddeployment.EffortsliketheEnergyInnovationHubsor

ManufacturingUSAInitiative

helpcreateregionalcentersofresearch,innovation,andnewinvestment.

H2Hubscouldyieldsignificantclimateandeconomicbenefits.Innovationtoreducethecostsandimprovetheemissions-abatementpotentialofcleanhydrogenwillaiddecarbonizationworldwide.TheinvestmentthataccompaniesH2Hubswillleadtoemployment,valuecreation,andeconomicgrowthintheregionswherehubsoperate.Andbybuildingclean-hydrogensupplychainsdomestically,theprogramcanhelp

establishtheUnitedStatesasaninternationalleaderincleanhydrogen.Tomaximizethesebenefits,H2Hubsneedtolookbeyondtheappliedchallengesofprojectfinanceandtechnicaldemonstrationandworkmorebroadlyonbuildingsympatheticecosystemsofinnovation.

BUILDINGINNOVATIONECOSYSTEMS

Regionalinnovationclusters—whichtypicallyincludeuniversities,labs,researchparks,incubators,andmanufacturinghubs—havelongsupportedeconomicgrowth,jobcreation,andcompetitiveness.Concentratinginnovationactivitiesgeographically,evenwithinasharedfacilityorresearchpark,canfacilitatecooperationandinformationexchangeamongscientists,engineers,andfirms.Withtherightincentives,itispossibletocoordinatetheirresearcheffortssotheysharehigh-costequipmentandprovidecomplementaryresources.Universityorcommunitypartnersalsoprovideopportunitiestonurtureandtraincommerciallyrelevanttalent.Thesecollectiveefforts,combinedwithsustainedfunding,canhelpdevelopthescaleandtechnologiestocompeteglobally.Suchregionalinnovationcentersarenormallysupportedbypolicyinitiativesatthelocalorstatelevelbutaremoreeffectivewhensupportedbycomplementaryfederaleffortsandspending.

Thereisnomanualforhowtobuildasuccessfulregionalinnovationhub,buttherearelessonsfrompreviouseffortsthatapplytohydrogenhubs.Regionalinnovationis

stronglyassociated

withnetworksoflinkedindustries,specializedservices,connecteduniversities,vocationaltraining,researchfacilities,andsupportivepublicandprivateinstitutions.Whenthosenodesareconnectedunderstrongleadershipthathassufficientsupport,thechancesofrealizingsustainedandlastingbenefitsforsocietyandlocalcommunitiesaremaximized.

Dedicatedlocalleadershipisakeyelementofsuccessforregionalinnovationefforts.Themost

successful

regionalinnovationinitiatives

are“oftenfosteredbyasmallnumberofkeyindividualsbridgingthespacebetweenscienceandcommercialization.”Localleadershiphelpsinitiativesremaincloselynetworkedwithexistinginstitutionssotheycanearnthetrustandsupportoflocalcommunitiesandelectedofficials.Localleadershipisalsolikelytoprioritizecapturingthelong-termjobs,economicinvestment,andindustryfootprintpromisedbyhubs.

Innovationisacomplexprocesscharacterizedbysuccessesaswellasfailures.Hubswillneedtoberesilientintermsofboththepoliticalcommitmentandresourcesnecessarytosurmountinevitablesetbacksandcapitalizeonsuccesses.Effectivehubleadershipisessentialtomanagesmallfailuresandpreventthemfromcascadingintoalossofconfidence.Settingupanincrementalprocessofplanninganditerationthatincludeskeystakeholdersisimportanttobuildandmaintainthemomentumforl