A Mississippi-based company has announced plans to build a green hydrogen hub in the southern state with energy coming from solar panels.

The Mississippi Clean Hydrogen Hub—which will produce, store and deliver green hydrogen—will be the largest of its kind in the US, says developer and owner Hy Stor Energy.

The company is in discussions with potential offtakers ranging from utilities to transport companies, says Chief Commercial Officer Claire Behar. Additionally, new customers—such as data centres and green steel—could be attracted to the region because they want to use green hydrogen to meet their decarbonisation goals, she suggests.

110,000t/yr – Targeted green hydrogen production from 2022

Construction of the first phase of the solar project and salt-cavern storage could start in late 2022 or in 2023, says Behar.

Hy Stor’s first phase is expected to produce about 110,000t/yr of green hydrogen and store more than 70,000t.

“We are thinking big and going bold and at scale to get to the nation’s net-zero goals,” she says, referencing the Biden administration’s plan to get to net-zero emissions by 2050.

Behar says hydrogen would be distributed from the hub in existing natural gas pipelines, potentially mixed with natural gas, or dispatched via new hydrogen-specific infrastructure. The gas could also be exported from deepwater ports on the Mississippi Gulf Coast, she says.

Hy Stor has partnered with CC&L Infrastructure of Canada, which invests in middle-market infrastructure assets.

Research firm BloombergNEF’s lead hydrogen analyst, Martin Tengler, says the project could be feasible—and receive financing—if certain conditions are met. “Most clean hydrogen projects that reach FID these days have a clear offtake agreement,” he notes.

If the US passes its $3/kg clean hydrogen tax it would make green hydrogen much more competitive compared with grey, he adds.

Demand factors

Hy Stor would need enough demand for clean hydrogen in the area, he says, which will depend on economics helped by federal tax credits and policy such as a state or federal carbon price or a clean hydrogen subsidy.

The hub may need to come online in phases that reflect demand and legislation.

“This could mean that a smaller version of the project might have a higher chance of coming online at first and then be expand later,” Tengler says. “The more of these conditions are met, the more likely the project can go forward.”

“We are thinking big and going bold and at scale to get to the nation’s net-zero goals” Behar, Hy Stor

Asked about the competitiveness of green hydrogen as soon as 2025 compared with blue, Behar says she expects customers to be willing to pay a premium for the green variety.

Behar also notes that solar costs have been plummeting and will continue to do so, and that Norway’s Nel Hydrogen in January released a goal of $1.50/kg for green hydrogen by 2025. Nel will provide technology for the hub’s electrolysers.

Hy Stor is talking to the US Department of Energy loans office and with private investors. It has already amassed the acreage for the solar production and has permits for the hydrogen storage.

The project also has political backing. Both the lieutenant governor of Mississippi, Delbert Hosemann, and speaker of the Mississippi House of Representatives, Philip Gunn, contributed comments to Hy Stor’s press release.

The hub is not the only hydrogen project recently unveiled in the Gulf area—home to most of the US’s oil and gas infrastructure. In neighbouring Louisiana, just days after Hy Stor’s announcement, Governor John Bel Edwards and French firm Air Products announced a larger $4.5bn blue hydrogen clean energy complex due to come online in 2026.

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Author: Ros Davidson