The US bipartisan Infrastructure Investment and Jobs Act will be a vital tool in enabling hydrogen projects to scale up quickly, according to panellists at a Reuters event on the energy transition in North America.

The act includes $8bn for regional clean hydrogen hubs and $1.5bn for clean hydrogen manufacturing and recycling research, development and demonstration.

Hubs—localised regions where production and end-use applications are connected—will act as small-scale showcases for the supply and demand cases of hydrogen, said David Edwards, industrial gases company Air Liquide’s advocate for hydrogen in the US.

“Hydrogen can be produced by different methods and used by different needs,” he says. “The power of the hubs will be to demonstrate that diversity.”

“Hydrogen can be produced by different methods and used by different needs” Edwards, Air Liquide

As well as helping accelerate the deployment of hubs, the act turns the conversation around hydrogen from a mindset based around regional decarbonisation initiatives to one of encouraging firms to develop national strategies.

“The implication of the infrastructure bill is that it changes our mindset,” says Edwards. “We are now thinking about things on a national level.”

Imports and exports

Hubs will enable the development of local use-cases to stimulate demand, enabling a wider infrastructure to be rolled out from there, according to Paul Bogers, vice-president of hydrogen at Shell.

“The immediate opportunity is to displace grey hydrogen and leverage that anchor demand for other use-cases,” he says. “Any project that starts off with requiring a large export-dominated play from day one is weak if it does not have a local use-case attached to it.”

Following the displacement of grey hydrogen in industrial applications, hydrogen is likely to be prioritised in the decarbonisation of steel and then for transport applications, Bogers adds.

In order for the hydrogen economy to reach critical mass, projects need to reach a gigawatt-scale as soon as possible. That means a policy framework that provides long-term certainty but is not overly proscriptive on technologies, and which stimulates demand as well as supply.

“They need to not be overly generous with subsidies but not so lean that you have a start-stop situation,” Bogers says. “A number of times in the past we have seen subsidy schemes that allow you to build a first-of-a-kind facility but then the demand does not materialise.”

The Department of Energy (DOE) is still establishing exactly how the money assigned to hydrogen will be distributed beyond the established production tax credit.

Strategy and tactics

The key to a successful shift to a hydrogen economy and transition to net zero is getting policy right on a local and federal level, said Sunita Satyapal, director of the DOE’s hydrogen and fuel cell technologies office.

“Both the strategic plan and the tactical plan are critical moving forward,” she notes. “It is critical to have inbuilt flexibility with offtakers and projects so that at different points in the timeline you have an upgradeable approach.”

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Author: Tom Young