Six Major Electric Utilities Join Forces to Pursue a Southeastern Hydrogen Hub

Credit to Author: Sonal Patel| Date: Thu, 03 Nov 2022 14:48:30 +0000

Marking intent interest from the power sector in hydrogen’s decarbonization potential, six major utilities—Dominion Energy, Duke Energy, Louisville Gas & Electric Co. (LG&E), Kentucky Utilities Co. (KU), Southern Co., and the Tennessee Valley Authority (TVA)—have announced they will jointly pursue federal financial support for a Southeast Hydrogen Hub.

The utilities, along with Battelle, an independent nonprofit applied science and technology organization that manages nine national laboratories, have formed a new coalition that will respond to the Department of Energy’s (DOE’s) $8 billion hydrogen hub program funded by the Infrastructure Investment and Jobs Act (IIJA).

The coalition said it expects a “growing list” of hydrogen users from a variety of industries in Alabama, Georgia, Kentucky, North Carolina, South Carolina and Tennessee. “The coalition expects its membership to grow as news of the opportunity spreads and as interest in hydrogen intensifies,” it said.

Marked Utility Interest in Hydrogen

Interest from the utilities—some of the largest in the U.S.—in the hub is a marked endorsement for hydrogen as a versatile energy carrier that is now being widely championed as critical to decarbonization. Hydrogen has the potential to be transported, stored, combusted, or used as a feedstock.

According to a recent report from the Brussels-based Hydrogen Council, hydrogen will be needed across several sectors to achieve carbon neutrality. The council anticipates a demand exceeding 660 million tons (MT) by 2050. It said in October that more than 680 large-scale hydrogen project proposals have been announced, totaling $240 billion in direct investment between now and 2030—an increase of 50% since November 2021 alone—though only 10% (about $22 billion) have reached final investment decision.

The consortium on Tuesday said a hydrogen hub in the Southeastern U.S. promises “robust economic development benefits to the region.” Hydrogen is attractive as an energy resource “because it has immediate potential to accelerate decarbonization in the Southeast and across all sectors of the U.S. economy—including transportation, which generates the largest share of greenhouse gas (GHG) emissions in the country,” it said.

However, the consortium also highlighted hydrogen’s potential as a dispatchable energy source that could enable power companies to add more intermittent renewable resources to the energy system. “Hydrogen may be poised to play a major role in addressing climate change and could be essential for each coalition member to meet its stated carbon-reduction goals,” the consortium added.

As POWER has highlighted in its ongoing “Utility Spotlight” series, many of the consortium’s utilities have grappled with multiple disruptions over the past decade including more stringent environmental policies, decentralization and electrification, a boost in shale gas production, and a proliferation of renewable power and battery storage, all which have transformed their generating portfolios. Dominion Energy, Duke Energy, Southern Co., and TVA are all scoping out emerging technologies that will cater to sustainability goals, as well as help secure reliability, and keep power affordable.

Dominion Energy, notably is targeting net-zero greenhouse gas emissions across Scopes 1, 2 and 3 for all electric and natural gas operations by 2050. Duke Energy is also targeting net-zero carbon emissions from electricity generation by 2050, but it has  interim carbon emissions targets of at least 50% reduction from electric generation by 2030 and 80% reduction by 2040. Along with parent company, PPL, LG&E and KU have set a goal to achieve net-zero carbon emissions by 2050, with interim reduction targets of 70% from 2010 levels by 2035 and 80% by 2040. Southern Co. also  has net-zero emissions goals across electric and natural gas operations by 2050. The TVA is targeting a 70% carbon reduction by 2030 and approximately 80% carbon reduction by 2035, and “aspires” for net-zero by 2050.

On Tuesday, Dominion Energy said hydrogen had a broad potential. “From electricity and home heating to transportation and manufacturing, hydrogen will bring jobs, investment and clean energy to every sector of the Southeast U.S. economy,” said Mark Webb, chief innovation officer of Dominion Energy. Swati Daji, Duke Energy senior vice president of enterprise strategy and planning, meanwhile, also highlighted hydrogen’s economic and workforce-development benefits.

Southern Co., part of a recent pivotal demonstration for hydrogen combustion at a gas-fired power plant with Mitsubishi Power, also hailed hydrogen’s broad potential.  “Southern Company views hydrogen as a powerful opportunity to provide an energy system that is abundant, affordable, reliable and resilient in a net-zero future,” said Chris Cummiskey, executive vice president, chief commercial officer and customer solutions officer, Southern Co.

TVA prominently highlighted hydrogen’s potential as a fuel. “TVA  is committed to our mission of service that makes life better for the people we serve,” said Dr. Joe Hoagland, vice president, TVA Innovation & Research. “As a member of the Southeast Hydrogen Hub coalition with Battelle and the Southeast’s premier energy providers, we are equipped and ready to maximize development of hydrogen as a much-needed alternative fuel. Hydrogen will be crucial for accelerating the transition to clean power so we can meet the demand for low-carbon energy throughout our region and across the country.”

$7B DOE Solicitation for for Hydrogen Hubs

The consortium’s effort on Tuesday responds to the DOE’s ramped-up development of its hydrogen hub program under the November 2021–enacted IIJA. The IIJA provides $8 billion through 2026 to the DOE’s Office of Clean Energy Demonstrations to establish four potential regional deployments catering to hydrogen infrastructure. The DOE describes H2Hubs as “a network of clean hydrogen producers, potential clean hydrogen consumers, and connective infrastructure located in close proximity.” H2Hubs will “form the foundation of a national clean hydrogen network that will contribute substantially to decarbonizing multiple sectors of the economy while also enabling regional and community benefits.” It will be a key part of the National Clean Hydrogen Strategy and Roadmap, which is also required under the IIJA, the agency has said.

On Sept. 22, the DOE unveiled a funding opportunity announcement (FOA) to solicit applications for up to $7 billion for its Regional Clean Hydrogen Hubs program (H2Hubs). The funding opportunity envisions selecting six to 10 H2Hubs for a combined total of up to $6–7 billion in federal funding. DOE said it may issue a second FOA to solicit additional H2Hubs. Concept papers are due on November 7, 2022, which will be followed by DOE notification encouraging or discouraging the submission of full applications in December 2022. Full applications are due on April 7, 2023, and DOE is expected to announce selected projects by the fall of 2023. 

Contenders so far include a consortium comprising the state of West Virginia, EQT Corp., (the nation’s largest natural gas producer), Battelle, GTI Energy, and Allegheny Science & Technology (AST), a West Virginia energy technology consulting firm. That consortium want to establish the Appalachian Regional Clean Hydrogen Hub (ARCH2), which will be centered in West Virginia, with impacts in Ohio, Pennsylvania, and Kentucky. “The region is the ideal location for a clean hydrogen hub, due to its unique access to ample low-cost natural gas feedstock, end-user demand, workforce and technology capability, and carbon sequestration potential,” Battelle said.

On Tuesday, the consortium affiliated with the Southeast Hydrogen Hub expressed similar goals. “By working together, the coalition can focus on developing scalable, integrated projects at key locations across the entire Southeast in support of these carbon-reduction goals and encourage the broad-based development of a regional energy ecosystem that will allow members to deploy hydrogen as a decarbonization solution for customers and communities,” it said.

“This team has a lot of strong players, and we think Battelle’s expertise and long history of operating large complex programs for the Department of Energy and other federal agencies can help uniquely position this team for success to address the critical issue of creating a clean energy future,” said Matt Vaughan, president of Battelle’s Applied Science and Technology.

Several other opportunities exist, according to the Great Plains Institute. The think tank recently published an Atlas of Carbon and Hydrogen Hubs, identifying 14 potential locations for co-locating carbon capture and hydrogen production across eight regions of the U.S. “This includes hydrogen made through electrolysis with clean electricity from renewable energy or nuclear power, as well as hydrogen made from natural gas with carbon capture.” The hubs identified in the Atlas “provide an opportunity to co-locate new hydrogen facilities in areas with existing hydrogen and ammonia distribution infrastructure, natural gas pipelines, biomass feedstock resource, and permanent geologic CO2 storage potential,” the organization said.

The DOE, meanwhile, continues to spearhead goals established under its H2@Scale initiative. In 2021 under that measure, the DOE launched the Hydrogen Shot, which entails cutting the cost of clean hydrogen production to “$1 per 1 kilogram of clean hydrogen in one decade.” The IIJA, notably, sets clean hydrogen production cost targets for electrolyzers at less than $2 per kilogram by 2026. 

—Sonal Patel is a POWER senior associate editor (@sonalcpatel, @POWERmagazine).

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